Document:

eCOST.com, Inc. 1999  Stock Incentive Plan

 EXHIBIT 10.12 
  
 ECOST.COM, INC. 
  
 1999 STOCK INCENTIVE PLAN 
  
 1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. 
  
 2. Definitions. As used herein, the following definitions shall apply: 
  
 (a) “Administrator” means the Board or any of the Committees appointed to administer the Plan. 

 
 (b) “Affiliate” and “Associate” shall
have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act. 
  
 (c) “Applicable Laws” means the legal requirements relating to the administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein.

  
 (d) “Award” means the grant of an Option,
SAR, Dividend Equivalent Right, Restricted Stock, Performance Unit, Performance Share, or other right or benefit under the Plan. 
  
 (e) “Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any
amendments thereto. 
  
 (f) “Board” means the
Board of Directors of the Company. 
  
 (g)
“Cause” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s: (i) refusal or failure to
act in accordance with any specific, lawful direction or order of the Company or a Related Entity; (ii) unfitness or unavailability for service or unsatisfactory performance (other than as a result of Disability); (iii) performance of any act or
failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (iv) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (v) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person. At least 30 days prior to the termination of the Grantee’s Continuous Service pursuant to (i) or (ii) above, the Administrator shall provide the Grantee with notice of
the Company’s or such Related Entity’s intent to terminate, the reason therefor, and an opportunity 
  

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 for the Grantee to cure such defects in his or her service to the Company’s or such Related Entity’s
satisfaction. During this 30 day (or longer) period, no Award issued to the Grantee under the Plan may be exercised or purchased. 
  
 (h) “Change in Control” means a change in ownership or control of the Company effected through either of the following transactions:

  
 (i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer
made directly to the Company’s stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or 
  
 (ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors. 

 
 (i) “Code” means the Internal Revenue Code of 1986, as
amended. 
  
 (j) “Committee” means any committee
appointed by the Board to administer the Plan. 
  
 (k)
“Common Stock” means the common stock of the Company. 
  
 (l) “Company” means eCOST.com, Inc., a Delaware corporation. 
  
 (m) “Consultant” means any person (other than an Employee or, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related
Entity to render consulting, advisory or other services to the Company or such Related Entity. 
  
 (n) “Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at
the time such election or nomination was approved by the Board. 
  
 (o) “Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant, is not interrupted or terminated. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii) transfers between locations of the Company or among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or 
  

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 Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related
Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. 
  
 (p) “Corporate Transaction” means any of the following transactions: 
  
 (i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated; 
  
 (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company’s subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company excluding for this purpose a spin-off of the Company’s Common Stock to shareholders of the Company’s Parent; 
  
 (iii) any reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or 
  
 (iv) an acquisition by any person or related group of persons (other than
the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities (whether or not in a transaction also constituting a Change in Control), but excluding any such transaction that the Administrator determines shall not be a Corporate Transaction. 
  
 (q) “Covered Employee” means an Employee who is a
“covered employee” under Section 162(m)(3) of the Code. 
  
 (r) “Director” means a member of the Board or the board of directors of any Related Entity. 
  
 (s) “Disability” means that a Grantee is permanently unable to carry out the responsibilities and functions of the position held by the
Grantee by reason of any medically determinable physical or mental impairment. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its
discretion. 
  
 (t) “Dividend Equivalent Right”
means a right entitling the Grantee to compensation measured by dividends paid with respect to Common Stock. 
  

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 (u) “Employee” means any person, including an Officer or Director, who is an employee of
the Company or any Related Entity. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company. 
  
 (v) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (w) “Fair Market Value” means, as of any date, the value of
Common Stock determined as follows: 
  
 (i) Where there exists a
public market for the Common Stock, the Fair Market Value shall be (A) the closing price for a Share for the last market trading day prior to the time of the determination (or, if no closing price was reported on that date, on the last trading date
on which a closing price was reported) on the stock exchange determined by the Administrator to be the primary market for the Common Stock or the Nasdaq National Market, whichever is applicable or (B) if the Common Stock is not traded on any such
exchange or national market system, the average of the closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the day prior to the time of the determination (or, if no such prices were reported on that date, on the last date on
which such prices were reported), in each case, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 (ii) In the absence of an established market for the Common Stock of the type described in (i), above, the Fair Market Value thereof shall be determined
by the Administrator in good faith. 
  
 (x)
“Grantee” means an Employee, Director or Consultant who receives an Award pursuant to an Award Agreement under the Plan. 
  
 (y) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code. 
  
 (z) “Non-Qualified Stock Option” means
an Option not intended to qualify as an Incentive Stock Option. 
  
 (aa) “Officer” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (bb) “Option” means an option to purchase Shares pursuant
to an Award Agreement granted under the Plan. 
  
 (cc)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (dd) “Performance-Based Compensation” means compensation qualifying as “performance-based compensation” under Section 162(m) of
the Code. 
  
 (ee) “Performance Shares” means
Shares or an Award denominated in Shares which may be earned in whole or in part upon attainment of performance criteria established by the Administrator. 
  

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 (ff) “Performance Units” means an Award which may be earned in whole or in part upon
attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator. 
  
 (gg) “Plan” means this 1999 Stock Incentive Plan.

  
 (hh) “Related Entity” means any Parent,
Subsidiary and any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or a Subsidiary holds a substantial ownership interest, directly or indirectly. 
  
 (ii) “Restricted Stock” means Shares issued under the Plan
to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator. 
  
 (jj) “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act or any successor thereto. 
  
 (kk)
“SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock. 
  
 (ll) “Share” means a share of the Common Stock. 

 
 (mm) “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 (nn) “Related Entity Disposition” means the sale, distribution or other disposition by the Company of all or substantially all of the
Company’s interests in any Related Entity effected by a sale, merger or consolidation or other transaction involving that Related Entity or the sale of all or substantially all of the assets of that Related Entity. 
  
 3. Stock Subject to the Plan. 
  
 (a) The maximum aggregate number of Shares which may be issued pursuant to
Awards initially shall be 2,500,000 Shares, and commencing with the first business day of each calendar year following the year in which the Company completes an underwritten initial public offering of its Common Stock, such maximum aggregate number
of Shares shall be increased by a number equal to three percent (3%) of the number of Shares outstanding as of December 31 of the immediately preceding calendar year. Notwithstanding the foregoing, subject to the provisions of Section 10, below, the
maximum aggregate number of Shares available for grant of Incentive Stock Options shall be 650,000 Shares, and such number shall not 
  

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 be subject to annual adjustment as described above. The Shares to be issued pursuant to Awards may be authorized, but
unissued, or reacquired Common Stock. 
  
 (b) Any Shares covered
by an Award (or portion of an Award) which is forfeited or canceled, expires or is settled in cash, shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. If any
unissued Shares are retained by the Company upon exercise of an Award in order to satisfy the exercise price for such Award or any withholding taxes due with respect to such Award, such retained Shares subject to such Award shall become available
for future issuance under the Plan (unless the Plan has terminated). Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan,
except that if unvested Shares are forfeited, or repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 
  
 4. Administration of the Plan. 
  
 (a) Plan Administrator. 
  
 (i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or
Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. 
  
 (ii) Administration With Respect to Consultants and Other Employees.
With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards and may limit
such authority as the Board determines from time to time. 
  
 (iii) Administration With Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee
of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the
“Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee. 
  

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 (iv) Administration Errors. In the event an Award is granted in a manner inconsistent with the
provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion: 
  
 (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder; 
  
 (ii) to determine whether and to what extent Awards are granted hereunder;

  
 (iii) to determine the number of Shares or the amount of
other consideration to be covered by each Award granted hereunder; 
  
 (iv) to approve forms of Award Agreements for use under the Plan; 
  
 (v) to determine the terms and conditions of any Award granted hereunder; 
  
 (vi) to amend the terms of any outstanding Award granted under the Plan, including a reduction in the exercise price (or base amount on which
appreciation is measured) of any Award to reflect a reduction in the Fair Market Value of the Common Stock since the grant date of the Award, provided that any amendment that would adversely affect the Grantee’s rights under an outstanding
Award shall not be made without the Grantee’s written consent; 
  
 (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan, including without limitation, any notice of Award or Award Agreement, granted pursuant to the Plan; 
  
 (viii) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with
terms or conditions which are inconsistent with the provisions of the Plan; and 
  
 (ix) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate. 
  
 (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be conclusive and binding
on all persons. 
  

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 5. Eligibility. Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants. Incentive Stock Options may be granted only to Employees of the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards
may be granted to such Employees, Directors or Consultants who are residing in foreign jurisdictions as the Administrator may determine from time to time. 
  
 6. Terms and Conditions of Awards. 
  
 (a) Type of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is
not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) an Option, a SAR or similar right with a fixed or variable price related to the Fair Market Value of the Shares and
with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or (iii) any other security with the value derived from the value of the
Shares. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Dividend Equivalent Rights, Performance Units or Performance Shares, and an Award may consist of one such security or benefit, or two (2) or more
of them in any combination or alternative. 
  
 (b) Designation
of Award. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares is granted. 
  
 (c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms,
and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award,
payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, increase in share price, earnings per share, total stockholder return,
return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of performance selected by the Administrator. Partial achievement of the
specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. 
  
 (d) Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or 
  

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 obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction. 
  
 (e) Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The
Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program. 
  
 (f) Award Exchange Programs. The Administrator may establish one or more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such terms and conditions as determined by the Administrator from time to time. 
  
 (g) Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time. 
  
 (h) Individual Option and SAR Limit. The maximum number of Shares with respect to which Options and SARs may be granted to any Employee in any
fiscal year of the Company shall be five hundred thousand (500,000) Shares. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10, below. To the extent
required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitation with respect to an Employee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number
of Shares with respect to which Options and SARs may be granted to the Employee. For this purpose, the repricing of an Option (or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction
in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR. 
  
 (i) Early Exercise. The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an Employee,
Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any
other restriction the Administrator determines to be appropriate. 
  
 (j) Term of Award. The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term of an Incentive Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in
the case of an Incentive 
  

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 Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award
Agreement. 
  
 (k) Transferability of Awards. Incentive
Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee;
provided, however, that the Grantee may designate a beneficiary of the Grantee’s Incentive Stock Option in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator. Other Awards shall be transferable
to the extent provided in the Award Agreement. 
  
 (l) Time of
Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator. Notice of the grant determination
shall be given to each Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the date of such grant. 
  
 7. Award Exercise or Purchase Price, Consideration, Taxes and Reload Options. 
  
 (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows: 

 
 (i) In the case of an Incentive Stock Option: 
  
 (A) granted to an Employee who, at the time of the grant of such Incentive
Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair
Market Value per Share on the date of grant; or 
  
 (B) granted
to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 
  
 (ii) In the case of a Non-Qualified Stock Option, the per Share exercise
price shall be not less than eighty-five percent (85%) of the Fair Market Value per Share on the date of grant unless otherwise determined by the Administrator. 
  
 (iii) In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any,
shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 
  
 (iv) In the case of other Awards, such price as is determined by the Administrator. 
  

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 (v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued
pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be determined in accordance with the principles of Section 424(a) of the Code. 
  
 (b) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise
or purchase of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In addition to any other types of consideration the
Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following: 
  
 (i) cash; 
  
 (ii) check; 
  
 (iii) delivery of Grantee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as
appropriate; 
  
 (iv) surrender of Shares or delivery of a
properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall be exercised (but only to the extent that such exercise of the Award would not result in an accounting compensation charge with respect to the Shares used to pay the
exercise price unless otherwise determined by the Administrator); 
  
 (v) with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the
Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or 
  
 (vi) any combination of the foregoing methods of payment. 
  
 (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or the disqualifying
disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Company shall withhold or collect from Grantee an amount sufficient to satisfy such tax obligations. 
  
 (d) Reload Options. In the event the exercise price or tax withholding
of an Option is satisfied by the Company or the Grantee’s employer withholding Shares otherwise deliverable to the Grantee, the Administrator may issue the Grantee an additional Option, with 
  

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 terms identical to the Award Agreement under which the Option was exercised, but at an exercise price as determined by
the Administrator in accordance with the Plan. 
  
 8. Exercise
of Award. 
  
 (a) Procedure for Exercise; Rights as a
Stockholder. 
  
 (i) Any Award granted hereunder shall be
exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement. 
  
 (ii) An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the
Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Shares subject to an Award, notwithstanding the exercise of an Option or
other Award. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Award. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is
issued, except as provided in the Award Agreement or Section 10, below. 
  
 (b) Exercise of Award Following Termination of Continuous Service. 
  
 (i) An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee’s Continuous Service only to the extent
provided in the Award Agreement. 
  
 (ii) Where the Award
Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day
of the original term of the Award, whichever occurs first. 
  
 (iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert
automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement. 
  
 (c) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Award
previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Grantee at the time that such offer is made. 
  

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 9. Conditions Upon Issuance of Shares. 
  
 (a) Shares shall not be issued pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 (b) As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required by any Applicable Laws. 
  
 10. Adjustments Upon Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, as well as any other terms that the Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, (ii) any other increase or
decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock to which Section 424(a) of the Code
applies; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator and its determination
shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof
shall be made with respect to, the number or price of Shares subject to an Award. 
  
 11. Corporate Transactions/Changes in Control/Related Entity Dispositions. 
  
 (a) The Administrator, in its sole discretion, may provide in any Award Agreement that, in the event of a Corporate Transaction, all or a portion of the
unvested Award covered by such Award Agreement shall automatically become vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to Incentive Stock Options) and repurchase or forfeiture
rights immediately prior to the specified effective date of such Corporate Transaction. Effective upon the consummation of the Corporate Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate
if the Awards are, in connection with the Corporate Transaction, assumed by the successor corporation or Parent thereof. 
  
 (b) The Administrator, in its sole discretion, may provide in any Award Agreement that, in the event of a Change in Control (other than a Change in
Control which also is a Corporate Transaction), all or a portion of the unvested Award covered by such Award 
  

 13 

 Agreement shall automatically become vested and exercisable and be released from any restrictions on transfer (other than
transfer restrictions applicable to Incentive Stock Options) and repurchase or forfeiture rights immediately prior to the specified effective date of such Change in Control. 
  
 (c) The Administrator, in its sole discretion, may provide in any Award Agreement that, effective upon the consummation of a
Related Entity Disposition, all or a portion of the unvested Award covered by such Award Agreement shall automatically become vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to
Incentive Stock Options) and repurchase or forfeiture rights immediately prior to the effective date of the Related Entity Disposition. Effective upon the consummation of a Related Entity Disposition, for purposes of the Plan and all Awards, the
Continuous Service of each Grantee who is at the time engaged primarily in service to the Related Entity involved in such Related Entity Disposition shall terminate. However, such Continuous Service shall not be deemed to terminate if such Award is,
in connection with the Related Entity Disposition, assumed by the successor entity or its Parent. 
  
 (d) The Administrator, in its sole discretion, may provide in any Award Agreement for other acceleration of vesting and exercisability, and release from
restrictions on transfer (other than transfer restrictions applicable to Incentive Stock Options) and repurchase or forfeiture rights (“Other Acceleration”) of an Award covered by such Award Agreement in addition to those set forth in
subsections (a), (b) and (c) above. The terms and conditions of such acceleration and release shall be determined in the sole discretion of the Administrator and shall be fully set forth in the Award Agreement. 
  
 (e) Notwithstanding the above, the Administrator may, in its discretion,
prevent the acceleration and vesting and release of restrictions on transfer and repurchase or forfeiture rights of any outstanding Award with respect to any Corporate Transaction, Change of Control, Related Entity Disposition or Other Acceleration
provisions. 
  
 12. Effective Date and Term of Plan. The
Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 17, below,
and Applicable Laws, Awards may be granted under the Plan upon its becoming effective. 
  
 13. Amendment, Suspension or Termination of the Plan. 
  
 (a) The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required. 
  
 (b) No Award may be granted during
any suspension of the Plan or after termination of the Plan. 
  

 14 

 (c) Any amendment, suspension or termination of the Plan (including termination of the Plan under Section
12, above) shall not affect Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been amended, suspended or terminated, unless mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company. 
  
 14. Reservation of Shares. 
  
 (a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 (b) The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed
by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not
have been obtained. 
  
 15. No Effect on Terms of
Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the Company’s right to terminate the
Grantee’s Continuous Service at any time, with or without cause. 
  
 16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits
or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits
is related to level of compensation. The Plan is not a “Retirement-Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended. 
  
 17. Stockholder Approval. The grant of Incentive Stock Options under the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution for outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such
stockholder approval shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options under the Plan prior to approval by the stockholders, but until such approval is obtained, no such
Incentive Stock Option shall be exercisable. In the event that stockholder approval is not obtained within the twelve (12) month period provided above, all Incentive Stock Options previously granted under the Plan shall be exercisable as
Non-Qualified Stock Options. 
  

 15Employment Agreement with Adam W. Shaffer

 EXHIBIT 10.14 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (“Agreement”) is made and entered into by and between Adam Shaffer (“Employee”) and eCost.com, Inc.
(“eCost” or the “Company”). 
  
 RECITALS

  
 A. eCost is a rapid response direct marketer of computer
hardware, software, peripheral, electronics products, and other customer goods, such as DVDs, watches and jewelry, and home and houseware products. 
  
 B. The Company has spent significant time, effort, and money to acquire and develop certain goodwill and Proprietary Information (as defined below) that
it considers vital to its business and goodwill, and which has become of great value to the Company. 
  
 C. The Company’s Proprietary Information will necessarily be communicated to and acquired by Employee in the course of his employment, and the
Company desires to obtain the services of Employee, only if, in doing so, it can protect its Proprietary Information and goodwill. 
  
 D. The parties agree and acknowledge that, in light of Employee’s employment relationship with the Company, and in light of Employee’s access to
its Proprietary Information, the restrictive covenants contained in Section 6 of this Agreement are essential to protect the legitimate business interests of the Company. 
  
 TERMS OF EMPLOYMENT 
  
 NOW, THEREFORE, in consideration of the benefits to be derived from the mutual observance of the agreements and covenants hereinafter contained, the
parties agree as follows: 
  
 1. Position And
Responsibilities. 
  
 1.1 Employment. The Company
hereby employs Employee as the Chief Executive Officer of eCost. Employee will work at the Company’s headquarters in Torrance, California. Employee shall perform all services appropriate to his position as Chief Executive Officer, as well as
such other services commensurate with such position as may be assigned from time to time by the Company’s Board of Directors. The Company shall retain full discretion and control over the means and methods by which Employee performs the above
services, and of the places that Employee renders such services. 
  
 1.2 Devotion Of Time To The Business. Employee shall devote his entire professional time to his employment with eCost and shall expend his best efforts on behalf of the Company. Employee agrees to abide by all policies, rules,
regulations, and decisions adopted by the Company during the Employee’s employment with the Company. Except upon prior written consent by the Company, Employee will not, during any time he is employed by the Company: 
  

 1 

 (i) accept any other employment; or (ii) engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that might interfere with Employee’s duties and responsibilities under this Agreement or create a conflict of interest with the Company. Notwithstanding the foregoing, Employee may: (a) continue to serve on the
boards of directors and advisory boards as shall not materially detract from the performance of the Employee’s duties under this Agreement and to which the Company shall have given its prior written consent; (b) continue to provide certain
consulting services disclosed by the Employee to the Company for a 30-day transition period after the first date on which this Agreement is signed by any party; and (c) accept such speaking engagements as shall not materially distract from the
performance of the Employee’s duties under this Agreement and as may benefit his position with the Company. 
  
 2. Warranties And Conditions Of Employment. 
  
 2.1 Employee represents and warrants that he will not use for the benefit of, disclose to the Company, or induce the Company to use any confidential or
proprietary information belonging to any former employer or other entity unless he has the advance written permission from the employer or entity to do so, or unless the Company has been granted such permission. 
  
 2.2 Employee represents and warrants that he shall not interfere with the
employment relationship between his former employers and their employees. 
  
 2.3 Employee represents and warrants that he has not entered into any agreements or understandings with any former employer or client that would affect his ability to work for, or devote his full and best efforts to
his employment with the Company. 
  
 3. Compensation And
Benefits. 
  
 3.1 Base Salary. As compensation for
Employee’s services, the Company will pay to Employee an annual base salary in the gross amount of $250,000 (the “Base Salary”), payable in accordance with the Company’s regularly established payroll practices. 
  
 3.2 Annual Bonus. Employee will be eligible to earn up to a $100,000
annual bonus in accordance with the Company’s existing, or to be established, annual bonus plan or program. The Company’s annual bonus plan or program is subject to change from time to time by the Company in its sole discretion.

  
 3.3 Bonus Related To IPO. Employee will be eligible to
earn up to a $25,000, one-time bonus in the event he successfully guides the Company through the completion of an IPO (as “IPO” is defined below in Section 3.4(a) below). 
  
 3.4 Stock Options. Subject to (i) approval by the Company’s Board of Directors, (ii) the terms of the
Company’s operative stock incentive plan at the time of grant (the “Stock Incentive Plan”) and a stock option agreement to be executed by the Company and Employee, and (iii) compliance with applicable securities laws, Employee shall
be eligible to receive a stock option on the following terms: 
  

 2 

 a. Employee will be granted an option (the “Option”) to purchase 400,000 shares of the Common
Stock of eCost (representing 4% of the outstanding shares of eCost common stock on the date of this Agreement), with an exercise price of $9.00 per share, under the Company’s Stock Incentive Plan. The shares covered by the Option shall vest as
follows: 25% of the shares (the “Initial Installment”) will vest on the third anniversary of the Employee’s commencement of employment with the Company, with the remaining amount vesting in equal quarterly installments over the
three-year period thereafter; provided that in the event the Company completes an underwritten initial public offering of its shares to the public (“IPO”) prior to the third anniversary date of Employee’s commencement of employment
with the Company, the Initial Installment shall vest instead on the closing date of the IPO, and the remaining amount shall vest in equal quarterly installments over the three-year period following the closing date of the IPO. The option agreement
will provide for partial acceleration of vesting in the event of a Corporate Transaction involving the Company (as defined in the Stock Incentive Plan, but excluding a spin-off), as follows: the Option will vest as to the next four unvested
quarterly installments, if any, together with a prorated portion of the remaining unvested quarterly installment; provided however, that if the Corporate Transaction occurs prior to the third anniversary of the commencement of employment or the
closing of an IPO, the Initial Installment will vest in connection with such Corporate Transaction. Vesting will not accelerate under the preceding sentence if the Option is assumed by the successor entity or replaced with a comparable cash
incentive program, unless Employee’s employment is terminated within 12 months after the Corporate Transaction (i) by the successor without “cause” or (ii) by Employee for “good reason” (as will be defined in the option
agreement). The Option and the terms of this Agreement shall in no way prevent PC Mall, Inc. (“Parent”) from continuing eCost as a subsidiary of Parent, consolidating eCost’s ongoing operations into Parent or replacing eCost’s
management. Employee accepts the risk that the option will not become exercisable until three (3) years after the date of grant as a result of eCost and Parent pursuing a strategy that does not include an IPO or a Corporate Transaction, and the
option shall not create any obligation on the part of eCost or Parent to pursue an IPO or a Corporate Transaction involving the Company. Vesting of Employee’s option will be subject to Employee’s Continuous Service (as defined in the Stock
Incentive Plan, and subject to the provisions of this paragraph) to the Company. The Option shall expire 90 days after Employee’s termination of Continuous Service to the Company. For purposes of this paragraph and the stock option agreement to
be entered into between Employee and the Company, Employee’s employment by, or service to, the Parent or another affiliate of the Parent (other than eCost) shall not be considered Continuous Service to the Company. Employee’s entitlement
to the Option is conditioned upon Employee’s signing of a stock option agreement and shall be subject to its terms and the terms of the stock option plan under which the options are granted. 
  
 b. Parent may determine in the future to spin off all or some of
eCost’s outstanding stock to Parent’s stockholders. In that regard, Parent may determine to consummate an IPO for less than 20% of the voting power of eCost and, following the IPO, spin off the remaining shares of the Company to
Parent’s stockholders in a tax-free distribution (“Distribution”). In the event that the Company completes an IPO, Employee agrees that he will not exercise the option referred to above, even if vested, until the earlier of (i) the
day following the consummation of the Distribution or (ii) 18 months from the closing date of the IPO. 
  

 3 

 3.5 Benefits. Employee shall be eligible to participate in the Company’s benefit plans made
generally available to comparable employees of the Company, including group medical, life insurance, and disability insurance. Employee’s eligibility to participate in the Company’s benefit plans shall be in accordance with the benefit
plans established by the Company, which may be amended from time to time in the Company’s sole discretion. 
  
 3.6 Vacation. Employee shall be entitled to take paid vacation pursuant to the Company’s existing policies regarding paid vacations. Employee
will be entitled to accrue four weeks of paid vacation per year. Employee’s vacation time will accrue on a monthly basis at a rate of 1.66 days per month. Vacation time that is not used may be carried over to the next calendar year, but
Employee will cease to accrue vacation time beyond his annual entitlement (i.e., 20 days). Vacation accruals will recommence after Employee has taken vacation and his accrued vacation time has dropped below the maximum annual entitlement.

  
 3.7 Withholdings. The Company shall have the right to
deduct and withhold amounts from all payments as required under applicable law. Additional amounts may be withheld from payments to the extent such withholding is authorized in writing by Employee. 
  
 4. Employment At Will. 
  
 4.1 At any time, the Company or Employee may terminate Employee’s
employment for any reason, with or without cause, and without prior notice. The Company will pay Employee all compensation then due and owing. Thereafter, all of the Company’s obligations under this Agreement shall cease. The Company may
discipline, demote, or dismiss Employee as provided in this Section notwithstanding anything to the contrary contained in or arising from any statements, policies, or practices of the Company relating to the employment, discipline, or termination of
its employees. 
  
 4.2 If the Company without Cause (as defined
below) terminates Employee’s employment at any point before the Company completes an IPO, upon execution of a severance and release agreement that is reasonably acceptable to the Company’s Board of Directors and that contains, among other
things, a release provision, eCost shall pay Employee an equivalent of three months of Base Salary. This severance payment will be paid in equal installment over a period of three months. After the Company has satisfied its severance payment
obligations under this paragraph, all obligations of the Company under this Agreement shall immediately cease 
  
 4.3 If the Company without Cause (as defined below) terminates Employee’s employment, demotes Employee to a substantially lower position, or
substantially restricts his job duties at any point after the Company completes an IPO, upon execution of a severance and release agreement that is reasonably acceptable to the Company’s Board of Directors and that contains, among other things,
a release provision, eCost shall pay Employee an equivalent of six months of Base Salary. The severance payment will be paid in equal installment over a period of six months. After the Company has satisfied its severance payment obligations under
this paragraph, all obligations of the Company under this Agreement shall immediately cease. 
  

 4 

 4.4 Notwithstanding Sections 4.2 and 4.3, the Company may terminate Employee’s employment for Cause
at any time, without prior notice, and without any obligation to pay any severance regardless of whether the Employee is terminated before or after the Company completes an IPO. However, Employee may not be terminated for Cause under the provisions
of 4.5 (i), (ii), or (v), below, unless the Employee is first given written notice by the Company of the matter or matters that are alleged to constitute Cause and is afforded a reasonable time to effect a cure and the opportunity to address the
matter at a meeting or a conference call of the Company’s Board of Directors. If Employee is terminated for Cause, the Company shall pay Employee all compensation to which he is entitled up through the date of termination and thereafter, all
obligations of the Company shall immediately cease. Accordingly, if Employee is terminated for Cause, he shall not be entitled to receive any severance from the Company whatsoever. 
  
 4.5 For purposes of this Agreement, the term “Cause” shall mean: (i) a material breach of any term set forth in
this Agreement; (ii) Employee’s failure to follow the reasonable instructions of the Company; (iii) misconduct on Employee’s part that is materially injurious to the Company, monetarily or otherwise, including misappropriation of trade
secrets, fraud, or embezzlement; (iv) Employee’s conviction for fraud or any other felony; or (v) if Employee exhibits in regard to his employment unavailability for service, misconduct, dishonesty, or habitual neglect. 
  
 4.6 To the extent permitted by applicable law, this Agreement, and the
Company’s obligations hereunder, shall terminate immediately upon Employee’s death or Disability. For purposes of this Agreement, the term “Disability” shall be defined as a physical or mental impairment of any type that prevents
Employee from performing the essential functions of his employment under this Agreement for more than ninety days in any twelve-month period, as reasonably determined by the Company. The Company shall pay to Employee or his estate any compensation
due and owing on the date of Employee’s death or Disability, and shall pay the Employee or his estate as soon as reasonably practicable: (a) an equivalent of three months of Base Salary if Employee’s death or disability occurs before the
Company completes an IPO; and (b) an equivalent of six months of Base Salary if Employee’s death or disability occurs after the Company completes an IPO. Nothing in this Section shall affect Employee’s rights under any disability plan in
which he is a participant. 
  
 5. Termination Obligations.

  
 5.1 Resignation From All Offices And Directorships. In
the event of any termination of Employee’s employment for any reason, Employee shall be deemed to have resigned voluntarily from all offices, directorships, and other positions held with the Company, if he was serving in any such capacities at
the time of termination. 
  
 5.2 Cooperation With The
Company. Employee will cooperate with the Company in the winding up or transferring to other employees any pending work or projects. Employee will also cooperate with the Company in the defense of any action brought by any third party against
the Company that relates to Employee’s employment with the Company. 
  

 5 

 5.3 Return Of Documents And Other Information. Employee agrees that all property, including,
without limitation, all equipment, tangible Proprietary Information, documents, books, records, reports, notes, contracts, lists, computer disks (and other computer-generated files and data), and copies thereof, created on any medium and furnished
to, obtained by, or prepared by Employee in the course of, or incident to his employment, belongs to the Company and shall be returned promptly to the Company upon termination of the Period of Employment. 
  
 5.4 Termination Of Benefits. All benefits to which Employee is
otherwise entitled shall cease upon Employee’s termination, unless explicitly continued either under this Agreement or under any specific written policy or benefit plan of the Company. 
  
 6. Proprietary Information; Non-Disclosure; and Non-Solicitation.

  
 6.1 Proprietary Information: For purposes of this
Agreement, “Proprietary Information” means all information and any idea in whatever form, tangible or intangible, whether disclosed to or learned or developed by Employee, pertaining in any manner to the business of the Company or to the
Company’s affiliates (including subsidiaries), consultants, customers, and business associates, unless: (i) the information is or becomes publicly known through lawful means; (ii) the information was rightfully in Employee’s possession or
part of my general knowledge prior to his employment by the Company; or (iii) the information is disclosed to Employee without confidential or proprietary restriction by a third party who rightfully possesses the information and did not learn of it,
directly or indirectly, from the Company. Employee further understands that the Company considers the following information to be included, without limitation, in the definition of Proprietary Information: (a) techniques, development tools and
processes, computer printouts, computer programs, design manuals; (b) information about costs, profits, revenues, margins and markets; (c) plans for future development and new product concepts; (d) customer names, addresses, telephone numbers,
facsimile numbers, credit card numbers, contact persons and customer preferences; (e) vendor names, addresses, telephone numbers, facsimile numbers, contact persons, vendor preferences and pricing; (f) marketing plans, bidding information, costs of
product, services and other items, proposal information, proposal methods and policies, price schedules, product profit margins, price setting methods and policies, customer service methods and policies and service plans and policies; (g) product
plans, product development plans, product specifications, sources of supply, methods of operation and related materials conceived, created or reduced to practice in the performance of services for the Company; (h) the Company’s business plans,
accounting records, computer records, computer systems, networking and telecommunication systems, management information systems and programs, audits and other financial data related to products and services provided by the Company; (i) labor rates,
commission rates and plans, commission schedules, employee lists, employee performance evaluations and related information, employee titles, outside contracting sources and rates, benefit costs and research reports; and (j) all documents, books,
papers, and other data of any kind and description, including electronic data recorded or retrieved by any means, that have been or will be given to me by the Company (or any affiliate of it), as well as written or verbal instructions or comments.

  

 6 

 6.2 Non-Disclosure. Employee agrees that his work with the Company will involve access to and
creation of Proprietary Information. Employee further agrees to hold all Proprietary Information in strict confidence and never to use or disclose any Proprietary Information to anyone at any time, including after the termination of his employment,
except to the extent necessary to carry out his responsibilities as an employee of the Company, or as specifically authorized in writing by an authorized officer of the Company, other than Employee. 
  
 6.3 Return Of Third Party Information: Employee represents and
warrants that he has returned all property, information, and trade secrets belonging to all prior employers, if any. 
  
 6.4 Former Agreements: Employee represent and warrant that his performance of the terms of this Agreement will not breach any agreement to keep in
confidence confidential information or trade secrets acquired by him prior to my employment by the Company, and that Employee is not subject to any restrictions, particularly (but without limitation) in connection with any previous employment, which
has a possibility of adversely altering the Company’s business or limiting the rights of the Company. 
  
 6.5 Non-Solicitation: Employee understands and agrees that, because of his responsibilities at the Company, he will help to develop, and will be
exposed to the Company’s business strategies, information on customers and clients, and other valuable Proprietary Information, and that use or disclosure of such Proprietary Information in breach of this Agreement would be extremely difficult
to detect or prove. Employee acknowledges that the Company’s relationships with its employees, customers, clients, vendors, and other persons are valuable business assets. Therefore, Employee agrees as follows: 
  
 (a) Employee shall not, for a period of two years after he is no longer
employed by the Company, directly or indirectly solicit, induce, recruit, or encourage any officer, director, or employee of the Company, or any of the Company’s affiliates, to leave the Company or terminate his or her employment with the
Company; 
  
 (b) Employee shall not, for a period of six months
following the termination of his employment if such termination occurs after the Company has completed an IPO or for a period of three months if such termination occurs before the Company has completed an IPO: (i) divert or attempt to divert any
business from the Company or any of the Company’s affiliates; (ii) interfere with any business relationship or contract between the Company, including the Company’s affiliates, and any of its customers, clients, members, vendors, business
partners, or suppliers; or (iii) for the purpose of selling products or services competitive with the Company’s or the Company’s affiliates, solicit any person, firm, corporation or entity of any kind, that was a customer, client or
prospective client of the Company at any time during the one year period preceding the termination date of Employee’s employment.  
  
 6.6 Injunctions. Employee acknowledges that the restrictions contained in Section 6 are reasonable and necessary in view of the nature of
Company’s businesses, in order to protect the legitimate interests of Company, and that any violation thereof would result in 
  

 7 

 irreparable injury to Company. Therefore, Employee agrees that, in the event of a breach or threatened breach by Employee
of the provisions of the paragraphs above, the Company shall be entitled to obtain from any court of competent jurisdiction, preliminary and permanent injunctive relief restraining Employee from any violation of the foregoing. 
  
 7. Arbitration. 
  
 7.1 The Company and Employee hereby agree that, to the fullest extent
permitted by law, any and all claims or controversies between them (or between Employee and any present or former officer, director, agent, or employee of the Company or any parent, subsidiary, or other entity affiliated with the Company) shall be
resolved by final and binding arbitration. 
  
 7.2 Claims subject
to arbitration shall include, without limitation, contract claims, tort claims, claims relating to compensation and stock options, as well as claims based on any federal, state, or local law, statute, or regulation, including but not limited to any
claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California Fair Employment and Housing Act. However, claims for unemployment benefits,
workers’ compensation claims, and claims under the National Labor Relations Act shall not be subject to arbitration. 
  
 7.3 Any arbitration proceeding shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (“the AAA Rules”). The arbitrator shall apply the same substantive law, with the same statutes of limitations and same remedies that would apply if the claims were brought in a court of law. 
  
 7.4 Either the Company or Employee may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise, neither party shall initiate or prosecute any lawsuit of claim in any way related to any arbitrable claim, including without limitation any claim as to the making,
existence, validity, or enforceability of the agreement to arbitrate. Nothing in this Agreement, however, precludes a party from filing an administrative charge before an agency that has jurisdiction over an arbitrable claim. Moreover, nothing in
this Agreement prohibits either party from seeking provisional relief pursuant to Section 1281.8 of the California Code of Civil Procedure. 
  
 7.5 All arbitration hearings under this Agreement shall be conducted in Los Angeles, California, unless otherwise agreed by the parties. The arbitration
provisions of this Arbitration Agreement shall be governed by the Federal Arbitration Act. In all other respects, this Arbitration Agreement shall be construed in accordance with the laws of the State of California, without reference to conflicts of
law principles. 
  
 7.6 Each party shall pay its own costs and
attorney’s fees, unless a party prevails on a statutory claim, and the statute provides that the prevailing party is entitled to payment of its attorneys’ fees. In that case, the arbitrator may award reasonable attorneys’ fees and
costs to the prevailing party as provided by law. The Company agrees to pay the costs and fees of the arbitrator to the extent required by law. 
  

 8 

 7.7 The parties also understand and agree that this agreement constitutes a waiver of their right to a
trial by jury of any claims or controversies covered by this agreement. the parties agree that none of those claims or controversies shall be resolved by a jury trial. 
  
 8. Severability. 
  
 8.1 Severability Of Unenforceable Provisions. The provisions of this Agreement are severable. In the event that any one or more of the provisions
contained in this Agreement, or the application thereof in any circumstances is held invalid, illegal, or unenforceable in any respect for any reason, the validity and enforceability of any such provision in every other respect and of the remaining
provisions of this Agreement shall not be in any way impaired or affected, it being intended that all of the rights and privileges contained in this Agreement shall be enforceable to the fullest extent permitted by law. 
  
 8.2 Scope. To the extent that any provision hereof is deemed
unenforceable by virtue of its scope, but could be enforceable by reducing the scope, Employee and the Company agree that same shall be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought, and that the Company shall have the right, in its sole discretion, to modify such invalid or unenforceable provision to the extent required to be valid and enforceable. 
  
 9. Successors. 
  
 This Agreement and the rights and obligations of the parties hereto shall be
binding upon and inure to the benefit of any successor or successors of the Company by way of reorganization, merger, acquisition or consolidation, and any assignee of all or substantially all of the Company’s business and properties.

  
 10. Amendments; Waivers. 
  
 This Agreement may not be orally modified or amended. It may only be modified
or amended by an instrument in writing signed by Employee and by a duly authorized representative of the Company, other than Employee. No failure to exercise and no delay in exercising any right, remedy, or power under this Agreement shall operate
as a waiver thereof or as a waiver of any other right, remedy, or power, nor shall any single or partial exercise of any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or other power provided
herein or by law or in equity. 
  
 11. Notices. 
  
 All notices, requests, demands, and other communications hereunder shall be
in writing, and shall be delivered in person, by facsimile, or by certified or registered mail with return receipt requested. Each such notice, request, demand, or other communication shall be effective: (a) if delivered by hand, when delivered at
the address specified in this Section; (b) if given by facsimile, when such facsimile is transmitted to the telefacsimile number specified in this Section and confirmation is received; or (c) if given by certified or registered mail, three days
after the mailing thereof. Notices shall be delivered as follows: 
  

 9 

 If to the Company: 
  
 eCost, Inc. 
 Care of: PC Mall, Inc. 
 2555 W. 190th Street 
 Torrance, CA 90504 
 Attention: Frank Khulusi 
 Fax: (310) 353-7411 
  
 With a copy to: 
  
 Morrison & Foerster LLP 
 19900 MacArthur Boulevard, 12th Floor 
 Irvine, California 92612 
 Attention: Robert M. Mattson, Esq. 
 Fax: (949) 251-0900 
  
 If to the Employee: 
  
 Adam Shaffer 
 7 Godfrey Road 
 Weston, Connecticut 06883 
  
 Any party may change its address by notice giving notice to the other party of a new address in accordance with the foregoing provisions.

  
 12. Assignment. 
  
 No benefit hereunder shall be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. The Company shall be permitted to assign this Agreement to any affiliate or any successor. 
  
 13. Integration. 
  
 This Agreement is intended to be the final, complete, and exclusive statement of the terms of Employee’s employment by the Company. This Agreement
supersedes all other prior and contemporaneous agreements and statements, whether written or oral, express or implied, pertaining in any manner to the employment of Employee, and it may not be contradicted by evidence of any prior or contemporaneous
statements or agreements. To the extent that the practices, policies, or procedures of the Company, now or in the future, apply to Employee and are inconsistent with the terms of this Agreement or the offer letter, the provisions of this Agreement
shall control. 
  

 10 

 14. Interpretation.  
  
 The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not
strictly for or against any party. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa. The descriptive headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not control, limit, or affect the interpretation or construction of any of the provisions herein. 
  
 15. Governing Law. 
  
 This Agreement has been negotiated and executed in the State of California and shall in all respects be governed by and interpreted in accordance with the
laws of the State of California without giving effect to principles of conflict of laws. 
  
 EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND UNDERSTANDS ITS CONTENTS. EMPLOYEE FURTHER ACKNOWLEDGES THAT THE COMPANY HAS ADVISED HIM OF HIS RIGHT TO CONSULT WITH LEGAL COUNSEL OF HIS OWN CHOICE
CONCERNING THIS AGREEMENT. BY SIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY AGREE TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT. 
  
 The parties have executed this Agreement on the dates noted below. 
  

									
	 Dated: March 19, 2004
	 	 	 	 ECOST, INC.

					
	 	 	 	 	 	 	 By:
	 	 /s/ Gary Guy

	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 GARY GUY
 PRESIDENT

	 	 	 	 	 	 	 	 	 
				
	Dated: March 19, 2004	 	 	 	 	 	 /s/ Adam Shaffer

	 	 	 	 	 	

	 	 	 	 	 	 	 ADAM SHAFFER

  

 11

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