Document:

Exhibit

Exhibit 10.1 

EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of June 11, 2019 by and between Priority Fulfillment Services, Inc., a Delaware corporation (the “Employer”), and James Butler (the “Executive”).  In consideration of the mutual covenants contained in this Agreement, the Employer and the Executive agree as follows:
1.Employment.  The Employer agrees to employ the Executive and the Executive agrees to be employed by the Employer on the terms and conditions set forth in this Agreement. The term of such employment shall commence on the date hereof and shall continue until terminated by either party as set forth herein.
2.Capacity. Subject to the terms and conditions of this Agreement, the Executive shall serve the Employer as Executive Vice President & General Manager of LiveArea. The Executive shall also serve one or more of the direct or indirect subsidiaries or affiliates of Employer’s parent organization, PFSweb, Inc., a Delaware corporation (including its direct and indirect subsidiaries, collectively, “PFSweb”), in such office or such other or additional offices as the Executive may be requested to serve by the Chief Executive Officer of PFSweb (the “CEO”). In such capacity or capacities, the Executive shall report directly to the CEO, or to such other officer of PFSweb as the CEO shall direct, and shall perform such services and duties in connection with the business, affairs and operations of the Employer and/or one or more of the direct or indirect subsidiaries or affiliates of Employer or of PFSweb as are commensurate with such position and/or as may be assigned or delegated to the Executive from time to time by or under the authority of the CEO or such other officer of PFSweb as the CEO shall direct. While this position will not require a permanent relocation to the PFSweb, Inc. headquarters in Allen, TX, it is expected that significant travel will be required to such headquarters or other subsidiary locations and elsewhere to support LiveArea sales and business requirements.
3.Compensation and Benefits.  The regular compensation and benefits payable to the Executive under this Agreement shall be as follows:
(a)Salary.  For all services rendered by the Executive under this Agreement, the Employer shall pay the Executive a salary (the “Salary”) as set forth on 

Schedule 1 attached hereto and incorporated herein. The Salary shall be payable in periodic installments in accordance with the Employer’s or PFSweb’s usual practice for its management personnel.
(b)    Bonus.  The Executive shall be entitled to incentive stock options and participate in an annual equity incentive and/or bonus program as set forth on Schedule 2 attached hereto and incorporated herein.
(c)    Benefits.  The Executive shall be entitled to participate in the health insurance and other benefit plans set forth on Schedule 3 attached hereto and incorporated herein.  Such participation shall be subject to the terms of the applicable plan documents, generally applicable policies of the Employer or PFSweb, applicable law and the discretion of any administrative or other committee provided for in or contemplated by any such plan.  Nothing contained in this Agreement shall be construed to create any obligation on the part of the Employer or PFSweb to establish any such plan or to maintain the effectiveness of any such plan that may be in effect from time to time.
(d)    Severance. The Executive shall be entitled to the severance benefits set forth on Schedule 4 attached hereto and incorporated herein.
(e)    Reimbursement of Business Expenses.  The Employer shall reimburse the Executive for all reasonable expenses incurred by the Executive in performing services during the term of this Agreement, in accordance with PFSweb’s applicable policies and procedures, as in effect from time to time.
(f)    Indemnification. Employee shall be provided indemnification to the maximum extent permitted by the Employer’s Certificate of Incorporation and Bylaws and will be provided indemnification under the terms of an Indemnification Agreement on no less favorable terms than provided to other officers. Employer maintains one or more policies for directors’ and officers’ liability insurance (such policies and any replacements thereof, the “D&O Policy”) and Employee shall be provided coverage under such D&O Policy as an “insured person” for any acts or omissions by Employee in the performance of her duties or position as an officer, employee or agent of the Employer or any subsidiary thereof.

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1.    Extent of Service.  During the Executive’s employment under this Agreement, the Executive shall devote the Executive’s full business time, best efforts and business judgment, skill and knowledge to the advancement of the Employer’s and PFSweb’s interests and to the discharge of the Executive’s duties and responsibilities under this Agreement.  The Executive shall not engage in any other business activity, except as may be approved by the CEO; provided that nothing in this Agreement shall be construed as preventing the Executive from:
(a)    investing the Executive’s assets in any company or other entity in a manner not prohibited by this Agreement and in such form or manner as shall not require any material activities on the Executive’s part in connection with the operations or affairs of the companies or other entities in which such investments are made; or
(b)    engaging in religious, charitable or other community or non-profit activities that do not impair the Executive’s ability to fulfill the Executive’s duties and responsibilities under this Agreement.
5.    Change in Control of PFSweb, Inc. or Sale of LiveArea Business Unit. See Schedule 2 for information regarding payments of incentive awards under the Employer’s short-term incentive and long-term incentive plans in the event of a Change in Control event (as defined herein) or a sale of the LiveArea business unit (as defined herein).  The term “Change in Control” shall mean the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving all or substantially all of the voting power of PFSweb, Inc. (the Employer’s parent company) shares and that requires the approval of the PFSweb Inc.’s stockholders.  The “sale of the LiveArea business unit” shall mean the sale of all or substantially all of the LiveArea assets to a third party.
6.    Termination. The Executive’s employment under this Agreement shall terminate under any of the following circumstances set forth in this Section 6.
a.Termination by the Employer for Cause.  The Executive’s employment under this Agreement may be terminated by the Employer for Cause (as defined herein) without further liability on the part of the Employer effective immediately upon written notice to the Executive.  The term “Cause” shall mean: (i) a material breach by 

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Executive of any term set forth in this Agreement; (ii) Executive’s failure to follow the reasonable instructions of the CEO or the Board of Directors of Employer or PFSweb; (iii) misconduct on Executive’s part that is materially injurious to the Employer or PFSweb, monetarily or otherwise, including misappropriation of trade secrets, fraud, or embezzlement; (iv) Executive’s conviction for fraud or any other felony;  (v) if Executive continually exhibits in regard to the Executive employment unavailability for service or habitual neglect; or (vi) the Executive’s substantial or material failure or refusal to perform according to, or comply with, the policies, procedures or practices established by the Company or the Board. For purposes of 6 (a) (i), (ii), (v) and (vi) above,  Employer will provide written notification of Cause event to Executive and Executive will have 30 days  to address and cure such Cause event in a manner acceptable to Employer. If the Executive cures the Cause event in a manner acceptable to the Employer during the 30 day period, Cause event shall be deemed not to have occurred.
b.Termination by the Executive.  The Executive’s employment under this Agreement may be terminated by the Executive (i) at any time, for any reason or no reason, upon prior written notice to the Employer or (ii) for Good Reason (as defined below).  For purposes of this Agreement, “Good Reason” shall mean that that the Executive has complied with the Good Reason Process (as defined below) following the occurrence of any of the following events:
(i)    a substantial diminution or other substantive adverse change, not consented to by the Executive, in the nature or scope of the Executive’s responsibilities, authorities, powers, functions or duties;
(ii)    an involuntary reduction of 20% or more in the Executive’s base Salary except for across-the-board reductions similarly affecting all or substantially all similar management level employees; or
(iii)    a breach by the Employer of any of its other material obligations under this Agreement.
“Good Reason Process” shall mean that: (A) the Executive reasonably determines in good faith that a “Good Reason” event has occurred; (B) the Executive notifies the Employer in writing of the occurrence of the Good Reason event within 30 days of the occurrence of such event and expressly 

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identifies such notice as a “Good Reason Notice” under this Section; (C) the Executive cooperates in good faith with the Employer’s efforts, for a period not less than 30 days following such notice, to modify the Executive’s employment situation in a manner acceptable to the Executive and the Employer; and (D) notwithstanding such efforts, one or more of the Good Reason events continues to exist and has not been modified in a manner acceptable to the Executive.  If the Employer cures the Good Reason event in a manner acceptable to the Executive during the 30 day period, Good Reason shall be deemed not to have occurred.
c.Termination by the Employer without Cause.  The Executive’s employment under this Agreement may be terminated by the Employer at any time without Cause upon written notice to the Executive. Executive acknowledges and agrees that, for all purposes, Executive’s employment hereunder shall be deemed “employment at will.”
d.Death.  The Executive’s employment with the Employer shall terminate upon the Executive death.
e.Disability.  If the Executive shall be disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation, the CEO may remove the Executive from any responsibilities and/or reassign the Executive to another position with the Employer during the period of such disability.  Notwithstanding any such removal or reassignment, the Executive shall continue to receive the Executive’s full Salary (less any disability pay or sick pay benefits to which the Executive may be entitled under the Employer’s policies) and benefits under Section 4 of this Agreement (except to the extent that the Executive may be ineligible for one or more such benefits under applicable plan terms) for a period of six (6) months and the Executive’s employment may be terminated by the Employer at any time thereafter.  If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Employer shall, submit to the Employer a certification in reasonable detail by a physician selected by the Employer to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue.  The Executive shall cooperate with any reasonable request of the 

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physician in connection with such certification.  If such question shall arise and the Executive shall fail to submit such certification, the Employer’s determination of such issue shall be binding on the Executive.  Nothing in this Section shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
7.    Compensation Upon Termination.
(a)    If the Executive’s employment with the Employer is terminated under any provision of Section 6 above, the Employer shall pay or provide to the Executive (or to the Executive authorized representative or estate) (i) any earned but unpaid Salary, (ii) any vested and accrued, but unpaid, bonus compensation, (iii) any unpaid expense reimbursements, and (iv) any other accrued and vested benefits the Executive may have under any employee benefit plan of the Employer or PFSweb or under any other written agreement between Executive and the Employer or PFSweb, including as set forth on any Schedule attached hereto.
(b)    Notwithstanding the foregoing, nothing in this Section shall be construed to affect the Executive’s right to receive continuation of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”) at the Executive’s own cost.  The Executive shall be obligated to give prompt notice of the date of commencement of any employment during the benefits continuation period and shall respond promptly to any reasonable inquiries concerning any employment in which the Executive engages during the benefits continuation period.
8.    Nondisclosure of Proprietary Information; Surrender of Records; Noncompetition.
(a)Proprietary Information.  Executive acknowledges that during the course of Executive’s employment with the Employer, the Employer has agreed to give Executive access to and use of, and/or Executive may have access to and/or may become aware of or have knowledge of, “Proprietary Information” and “Confidential Records” (as those terms are defined below) of the Employer, PFSweb, its predecessors, and its or their subsidiaries or affiliates (collectively, the “Employer Group”).  Executive covenants that Executive shall not during the term of this Agreement or at any time thereafter (irrespective of the circumstances under which Executive’s employment by the Employer terminates), 

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directly or indirectly, disclose, or use for Executive’s own purpose or for the benefit of any individual or entity, any Proprietary Information of which Executive has knowledge, unless such disclosure has been specifically authorized in writing by the Employer or is required by law.  Executive acknowledges and understands that the term “Proprietary Information” includes, but is not limited to: (i) all ideas, inventions, know-how, technology, formulas, designs, software, programs, algorithms, products, systems, applications, processes, procedures, methods and improvements and enhancements, and all related documentation, whether or not patentable, copyrightable or entitled to other forms of protection, utilized by any member of the Employer Group or which are, directly or indirectly, related to the business, products or services, or proposed business, products or services, of any member of the Employer Group; (ii) the name and/or address of any customer or vendor of any member of the Employer Group or any information concerning the transactions or relations of any customer or vendor of any member of the Employer Group with any member of the Employer Group, their affiliates or any of their stockholders, members, principals, directors, officers, employees or agent; (iii) any financial information relating to any member of the Employer Group and their respective businesses, including, without limitation, information relating to pricing or marketing methods, sales margins, cost or source of materials, supplies or goods, capital structure, operating results or borrowing arrangements; (iv) any information which is generally regarded as confidential or proprietary in any line of business engaged in by any member of the Employer Group; (v) any business plans, budgets, advertising or marketing plans of any member of the Employer Group; (vi) any information contained in any corporate policies and procedures or manuals of any member of the Employer Group; (vii) any information belonging to customers, vendors or affiliates any member of the Employer Group has agreed to hold in confidence; and (viii) all written, graphic and other material (in any medium whether in writing, on magnetic tape or in electronic or other form) relating to any of the foregoing.  Executive acknowledges and understands that information that is not novel or is not copyrighted, trademarked or patented, or eligible for such or any other protection, may nonetheless by proprietary information.  The term “Proprietary Information” shall not include (i) information generally available to and known by the public or (ii) information that is or becomes available to Executive on a non-confidential basis from a source other than any member of the Employer Group or any of their members, 

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managers, stockholders, directors, officers, employees or agents and the disclosure of which was not a breach of any obligation of confidentiality.
(b)Confidentiality and Surrender of Records.  Executive shall not during the term of this Agreement or at any time thereafter (irrespective of the circumstances under which Executive’s employment by the Employer terminates), except as required by law or as is necessary for the performance of Executive’s duties under this Agreement, directly or indirectly, publish, make known or in any manner disclose any Confidential Records to, or permit any inspection or copying of Confidential Records by, any individual or entity.  Executive shall not retain, and will deliver promptly to the Employer, all copies of any of the same following termination of Executive’s employment hereunder for any reason or upon request by the Employer.  For purposes of this Section, “Confidential Records” means, without limitation, all correspondence, memoranda, files, manuals, books, lists, financial, operating or marketing records belonging to the Employer or any member of the Employer Group, and customer and vendor records relating to or containing any proprietary information (in any medium whether in writing, on magnetic tape or in electronic or other form) or equipment of any kind belonging to the Employer or any member of the Employer Group, which may be in Executive’s possession or under Executive’s control or accessible to Executive.  All Confidential Records shall be and remain the sole and exclusive property of the Employer during the Term and thereafter.
(c)Noncompetition; Nonsolicitation.  In consideration of the covenants to be performed by the Employer hereunder, the Executive agrees as follows:
(i)    Except as provided below, for a period commencing on the date hereof and ending on the last day of the Restricted Period (as hereinafter defined), the Executive shall not, without the prior written consent of the CEO of PFSweb, Inc., either directly, indirectly, separately or in association with others:
(A)    engage in the operation of, or have any financial interest in (whether as an officer, director, employee, partner, owner, member, lender, shareholder, operator, consultant or otherwise) any entity, firm, business or trust that itself engages in, or through a subsidiary or affiliate engages in, any business then conducted, or known by the Executive to be proposed to 

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be conducted, by the Employer and/or PFSweb (hereinafter, a “Competing Business”);
(B)    employ, attempt to employ, or cause or encourage others to employ or interfere, or otherwise interfere or attempt to interfere, with the employment, contractual or other business relationships between the Employer and/or PFSweb, on the one hand, and any of its customers, providers, payors, vendors, suppliers or agents, on the other hand for the purpose of engaging in a Competing Business;
(C)    advise or encourage any provider, payor, consultant or representative or client of, or vendor or supplier to the Employer and/or PFSweb to terminate the Executive or its relationship with the Employer and/or PFSweb or to reduce the amount of business it does with the Employer and/or PFSweb; or
(D)    solicit or otherwise induce or influence any officer, director, employee, supervisor, administrator or other personnel employed by the Employer and/or PFSweb to discontinue or terminate such employment or employ any such individual.
(i)Nothing in this Agreement shall prohibit the Executive from owning one percent (1%) or less of the issued and outstanding securities of a company which is engaged in a Competing Business whose securities are listed on a national securities exchange or listed on the NASDAQ National Market System.
(ii)For purposes of any provision of this Section, “directly or indirectly” means in the Executive’s individual capacity for the Executive own benefit or for the benefit of any other person or entity, or as a shareholder, partner, member or other principal, officer, director, trustee, manager, employee, agent or consultant of or to any person or entity whatsoever.
(iii)As used herein, the term “Restricted Period” means the period commencing on the date hereof and ending on the twelve (12) month anniversary of the date of termination of Executive’s employment hereunder, however arising. 

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(iv)The Executive acknowledges and agrees that the restrictions and provisions contained in this Agreement are reasonable and necessary to protect the legitimate interests of the Employer, that the provisions contained in this Agreement are required to preserve for the Employer its goodwill, that the Employer would not have entered into this Agreement in the absence of such restrictions, that any violation of such restrictions and provisions will result in irreparable injury to the Employer, that the remedy at law for any breach of the foregoing restrictions will be inadequate, and that, in the event of any such breach, the Employer, in addition to any other relief available to it, shall be entitled to temporary and permanent injunctive relief. The Executive further specifically acknowledges and agrees that the Employer shall be entitled to an equitable accounting of all earnings, profits and other benefits arising from any such breach, and further agrees to pay the reasonable legal fees and expenses incurred by the Employer in successfully enforcing the provisions contained herein. The Executive acknowledges that she has entered into this Agreement with full understanding and acceptance of the terms hereof. The Executive acknowledges that the restrictions imposed herein are fair and reasonable and are required for the protection of the Employer and are given as an integral part of the employment agreement contained herein. Executive further acknowledges that she has the ability and skills to obtain gainful employment in the industry of the Executive choosing while concurrently complying with the terms and provisions of this Agreement.  The Executive expressly agrees that the provisions contained herein are severable independent covenants and are reasonable limitations as to time, geographical area and scope of activity, and such restrictions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Employer. If any of the covenants contained in this Agreement, or any part hereof, is hereinafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portions.  If any of the covenants contained in this Agreement, or any part hereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or geographic area of such provision and, in its reduced form, said provision shall then be enforceable. The Executive acknowledges that the parties intend to and hereby confer jurisdiction to enforce the covenants contained in 

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this Agreement upon the courts of any state within the geographical scope of such covenants.  In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Employer to the relief provided above in the courts of any other states within the geographical scope of such covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being, for this purpose, severable into diverse and independent covenants. The existence of any claim or cause of action by Executive against the Employer shall not constitute a defense to the enforcement of this Agreement.
9.    No Other Obligations. Executive represents that Executive is not precluded or limited in Executive’s ability to undertake or perform the duties described herein by any contract, agreement or restrictive covenant.  Executive covenants that Executive shall not disclose or employ the trade secrets or proprietary information of any other individual or entity in connection with Executive’s employment by the Employer. The Executive represents to the Employer that the Executive’s execution of this Agreement, the Executive’s employment with the Employer and the performance of the Executive’s proposed duties for the Employer will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Employer, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Employer any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.
10.    Confidentiality. Executive agrees to keep confidential the terms of this Agreement, other than any terms provided by the Employer through its public filings with the Securities and Exchange Commission.  This provision shall not prohibit Executive from providing this information on a confidential and privileged basis to Executive’s attorneys or accountants for purposes of obtaining legal or tax advice, to enforce this Agreement or as otherwise required by law, nor will this provision prevent Executive from introducing this Agreement in court or in arbitration in connection with any dispute involving this Agreement.
11.    Cooperation.

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(a)    Executive shall, during the term of this Agreement and thereafter, at the reasonable request of the Employer, fully cooperate with any member of the Employer Group and their affiliates in connection with the prosecution or defense of any claim, action, arbitration, suit or proceeding against or by a third party relating to any member of the Employer Group or any of their affiliates, including, without limitation, providing access to Executive’s files and records that are relevant to such claim, action, arbitration, suit or proceeding and appearing as a witness in any such claim, action, arbitration, suit or proceeding (collectively, the “Cooperative Services”).  To the extent Executive provides any such Cooperative Services following the termination of the Executive employment, Executive shall be reimbursed for all reasonable costs and expenses from time to time actually incurred by Executive in connection with the Executive provision of such Cooperative Services.
(b)    Upon termination of employment hereunder, Executive will cooperate with the Employer in the winding up or transferring to other employees any pending work or projects. Executive 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 Executive in the course of, or incident to the Executive employment, belongs to the Employer and shall be returned promptly to the Employer upon termination of the Executive employment.
12.    Developments the Property of the Employer. All discoveries, inventions, ideas, technology, formulas, designs, software, programs, algorithms, products, systems, applications, processes, procedures, methods and improvements and enhancements conceived, developed or otherwise made or recreated or otherwise produced by Executive at any time during the term of this Agreement, alone or with others, and in any way relating to the present or proposed business, products or services of any member of the Employer Group, whether or not subject to patent, copyright or other protection and whether or not reduced to tangible form, during the period of Executive’s employment with the Employer (“Developments”), shall be the sole and exclusive property of the Employer.  Executive agrees to, and hereby does, assign to the Employer, without any further consideration, all of Executive’s right, title and interest throughout the world in and to all Developments.  Executive agrees that all such Developments constitute works made for hire 

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under the copyright and other laws of the United States and, as such, acknowledges that the Employer is the author of such Developments and owns all of the rights comprised in such Developments, and Executive hereby assigns to the Employer without any further consideration all of the rights comprised in the copyright and other proprietary rights Executive may have in any such Development to the extent that it might not be considered a work made for hire.  Executive shall make and maintain adequate and current written records of all Developments and shall disclose all Developments promptly, fully and in writing to the Employer promptly after development of the same, and at any time upon request.
13.    Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the state and federal courts of Texas and solely for such purpose each party submits to the personal jurisdiction of such courts.
14.    Integration. This Agreement, including the Schedules hereto, constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter, all of which prior agreements, if any, are hereby terminated and of no further force or effect.
15.    Assignment; Successors and Assigns, etc. Neither the Employer nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party; provided that the Employer may assign its rights under this Agreement without the consent of the Executive in the event that the Employer shall effect a reorganization, consolidate with or merge into any other corporation, partnership, organization or other entity, or transfer all or substantially all of its properties or assets to any other corporation, partnership, organization or other entity.  This Agreement shall inure to the benefit of and be binding upon the Employer and the Executive, their respective successors, executors, administrators, heirs and permitted assigns.
16.    Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is 

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so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
17.    Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
18.    Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Employer or, in the case of the Employer, at the principal executive office of PFSweb, attention CEO, and shall be effective on the date of delivery in person or by courier or three (3) days after the date mailed.
19.    Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Employer.
20.    Governing Law. This agreement shall be construed under and be governed in all respects by the laws of the State of Texas, without giving effect to the conflict of laws principles of such State.
21.    Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
22.    Waiver of Jury Trial. Each party agrees to waive its rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement.  This waiver is irrevocable and shall apply to any subsequent amendment, renewal, supplement or modification of this Agreement.

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[signatures on next page]

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IN WITNESS WHEREOF, this Employment Agreement has been executed by the Employer, by its duly authorized officer, and by the Executive, as of the date set forth above.

Priority Fulfillment Services, Inc.

By:     /s/ Latrice Robinson        
Latrice Robinson
Vice President, Human Resources

/s/ James Butler            
James Butler
                            

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SCHEDULE 1

Base Annual Salary of $450,000

SCHEDULE 2

Bonus:
Short Term Incentive ("STI") Annual Plan:  $165,000 - For 2019, this will be paid in PFSweb shares determined using the lower of the PFSweb share price as of (1) hire date or (2) market close on July 1, 2019 .  Future years’ annual award share amounts will be set using the PFSweb share price as of as of the finalization of that year’s plan with the PFSweb compensation committee.  Payouts will be based 50% on LiveArea service fee revenue objectives and 50% based on LiveArea direct contribution objectives identified for each year (to be set in that particular year). Payouts under the service fee revenue and direct contribution performances are mutually exclusive and not dependent on each other.  Range of payout dependent on performance against objectives, with achievement of base level objective resulting in 50% payout, achievement of target objective resulting in 100% payout, and achievement of stretch objective resulting in 150% payout.  Performances in between base and target, or between target and stretch will be paid out on a linear basis between the set payout objectives.

Targets for LiveArea performance for CY2019 STI objectives are to be set by July 31, 2019.  While it is expected Executive will be employed for approximately 6 to 7 months during 2019, Executive will be eligible to earn a full amount of STI that year.

In the event of a Change in Control at PFSweb, Inc. or a sale of the LiveArea business unit (as defined) , STI for that year will be based on how the LiveArea business unit is performing against its financial goals on a year to date basis for that year.  However, in any event, a minimum payout of base level STI (50% of target) will be paid.

Long Term Incentive:

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	(1)
	Stock Options - 250,000 incentive stock options to be issued on date of employment with an option exercise strike price of $5.00.  Subject to the Executive’s continuing employment, one fifth of the stock option award will vest as of each calendar yearend, beginning with the period ended December 31, 2019 (ie 20% of the incentive stock option award will vest as of December 31, 2019 and each December 31 thereafter).  In the event of a PFSweb, Inc. Change in Control or a LiveArea business unit sale, all unvested stock options will vest immediately prior to the closing of such transaction.

		
	(2)
	Performance Based Stock units (PSUs) - Target level of 250,000 PFSweb, Inc. PSU stock units. Vesting of PSUs will be based on LiveArea achieving trailing twelve months service fee revenue and Adjusted EBITDA performance (“AEBITDA”) criteria at any time during the first five year period through June 30, 2024.  PSUs will vest 50% of target (125,000 PSUs) once LiveArea achieves trailing twelve months service fee revenue of $120 million at an AEBITDA margin of 20%.  Full 100% vesting of target (total cumulative amount of 250,000 PSUs) will occur once LiveArea achieves trailing twelve months service fee revenue of $140 million at an AEBITDA margin of 20%.  Stretch goal of 120% of the target PSU awards (total cumulative amount of 300,000 PSUs) can be earned if LiveArea achieves trailing twelve months service fee revenue of $160 million at 20% AEBITDA margin.    For purposes of each of these performance assessments, both the service fee revenue AND AEBITDA margin criteria must be met.    For purposes of measurement against the above criteria, the revenue and AEBITDA impact of any future acquisitions will be excluded.

All remaining unvested PSU awards will vest upon a PFSW Change in Control or a LiveArea business unit sale occurring between June 11, 2019 and June 30, 2024, as follows:
		
	(A)
	During calendar year 2019 and 2020, 50% of the remaining unvested target level PSU awards will vest immediately, and the remainder will be forfeited.

		
	(B)
	During calendar year 2021, 75% of the remaining unvested target level PSU awards will vest immediately, and the remainder will be forfeited.

		
	(C)
	During calendar years 2022, 2023 and until June 30, 2024, 100% of the remaining target level unvested PSU awards will vest immediately.

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The terms and provisions of the foregoing bonus and incentive awards will be set forth in separate award agreements which will be consistent with the PFSweb, Inc. Employee Stock and Incentive Plan (the “Plan”). To the extent any of the foregoing awards are not issued under the Plan, the Employer will use its best efforts to register any of such shares of PFSweb, Inc. stock issuable thereunder within 120 days of issuance.

SCHEDULE 3

Executive will be reimbursed Cobra medical premiums for coverage beginning with the date of hire until the first day of coverage begins with PFSweb provided benefits.

Executive shall participate and have access to other reimbursable expenses and allowances including enrollment in the Employer group benefit plans, as currently maintained, subject to the right of the Employer, upon such date or dates to be determined by it, to replace one or more of such Employer plans with one or more other group benefit plans, which currently consist of group health, dental, life, short-term disability and long-term disability benefit plans and other programs, policies and benefits under the Total Rewards package.

Executive will be reimbursed annually by Employer for life insurance policy costs for up to $750,000 of coverage.

SCHEDULE 4

Executive shall be entitled to Severance and Benefits in accordance with the terms and provisions of Exhibit A attached hereto and incorporated herein.
EXHIBIT A

19

1.    If the Employer terminates the Executive’s employment without Cause, or if the Executive terminates employment for Good Reason (each, a “Qualifying Termination”), then, upon execution and non-revocation of a release agreement that is reasonably acceptable to the Employer (the “Release”) within the 90-day period described below, and subject to Executive’s continuing compliance with obligations hereunder, including the obligations set forth in Sections 8, 10, 11, and 12 hereof, Employer shall pay Executive an equivalent of 12 months of Executive’s then base Salary (the “Severance”). The Severance will be paid in equal installments over a period of 12 months, net of any withholdings and taxes and in accordance with the Employer’s ordinary pay policies.  Payment of the Severance shall commence within 90 days following Executive’s termination of employment, provided that within such 90-day period, Executive executes and does not revoke the Release, and provided further that if the 90-day period begins in one calendar year and ends in a subsequent calendar year, payment of the Severance shall commence in such subsequent calendar year.  Each payment of Severance shall constitute a separate payment for purposes of Section 409A.

2.     In the event of a Qualifying Termination, all of Executive’s medical, dental and insurance benefits (the “Benefits”) will cease. Executive will be offered the option of continuing health insurance benefits under COBRA at Executive’s sole expense with the exception that Employer will reimburse Executive for up to the first six months of Cobra coverage upon a Qualifying Termination event.
    
3.    The parties agree that it is the intent of the parties to comply with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury regulations promulgated thereunder (“Section 409A”), and this Agreement shall be deemed amended as may be necessary to fully comply with said Section 409A in order to preserve the payments and benefits provided hereunder without additional cost to either party.  Without in any way limiting the generality of the foregoing, the parties agree that (i) if at the time of the Executive’s termination of employment, the Executive is considered a “specified employee” within the meaning of Section 409A, and if any payment that the Executive becomes entitled to under this Agreement is considered deferred compensation subject to interest and additional tax imposed pursuant to Section 409A, then no such payment shall be payable prior to the date that is the earlier of (x) six months after the Executive’s separation from service, or (y) the Executive’s death, (ii) the parties intend (x) the Severance to be exempt from Section 409A to the maximum extent permitted under the short-term deferral rule of Treasury Regulation Section 1.409A-1(b)(4) and/or the separation pay exemption under Treasury Regulation Section 1.409A-1(b)(9)(iii) and (y) the Benefits to be exempt from 409A under Treasury Regulation Section 1.409A-1(b)(9)(v)(B) or 1.409A-1(a)(5) (relating to certain welfare benefits). Executive 

20

acknowledges and agrees that Employer does not make any representations, warranties or guarantees about the tax treatment of the Severance or continuation of Benefits under Section 409A or otherwise.

21EX-10.1

 Exhibit 10.1 
  

ARCTURUS THERAPEUTICS HOLDINGS INC. 

EXECUTIVE EMPLOYMENT AGREEMENT 

for 
 JOSEPH E. PAYNE

 This Executive Employment Agreement (this “Agreement”), is made and entered into by and between Joseph E. Payne
(“Executive”) and Arcturus Therapeutics Holdings Inc., a Delaware corporation (the “Company”). This Agreement amends and restates any prior employment agreement previously entered into by Executive and the Company.
In consideration of the mutual agreements set forth herein, the Company and Executive hereby agree as follows: 
 1. Employment by the
Company.  
 1.1. Employment. The Company hereby agrees to employ Executive and Executive hereby agrees to accept such
employment, on the terms and conditions set forth in this Agreement, with a start date of July 5, 2018 (the “Effective Date”). 

1.2. Position. Executive shall serve as the Company’s President and Chief Executive Officer, reporting to the Company’s Board
of Directors (the “Board”). During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business
of the Company and serving as President of the Company, except as permitted by Section 7.1 below and approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s general employment
policies. 
 1.3. Duties and Location. Executive shall perform such duties as are customarily associated with the position of
President and Chief Executive Officer of a public company, as well as such additional or other duties and responsibilities as the Board may assign. Executive’s primary office location shall be the Company’s headquarters located in San
Diego, CA. Subject to the terms of this Agreement, the Company reserves the right to reasonably require Executive to perform Executive’s duties at places other than Executive’s primary office location from time to time and to require
reasonable business travel. 
 1.4. Policies and Procedures. The employment relationship between the parties shall be governed by the
general employment policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control. 

2. Compensation.  

2.1. Compensation Policy Limits. Any compensation or benefits payable to Executive under this Agreement is subject to any applicable
limitations imposed by applicable law. 

 2.2. Base Salary. For services to be rendered hereunder, Executive shall receive a
base salary at the rate of $450,000 per year (the “Base Salary”), less standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule. 

2.3. Annual Bonus. Executive will be eligible to earn an annual discretionary target bonus (the “Annual
Bonus”) of sixty percent (60%) of Executive’s then current Base Salary. Whether Executive receives an Annual Bonus for any given year, and the amount of any such Annual Bonus, will be determined in the good faith discretion of
the Compensation Committee of the Board (the “Compensation Committee”), based upon the Company’s and Executive’s achievement of objectives and milestones to be determined on an annual basis by the
Compensation Committee in accordance with the Compensation Policy. No Annual Bonus is guaranteed and, in addition to the other conditions for earning such compensation, Executive must remain an employee in good standing of the Company on the
scheduled Annual Bonus payment date in order to be eligible for any Annual Bonus, except as set forth below. 
 2.4. Special Bonus.
Executive has received a special bonus in the amount of $130,000 (“Special Bonus”) for 2018 only for his exceptional achievements in 2018, including for his efforts to help the Company’s stockholders
replace the Board with nominees who have experience that is commensurate with directors of similarly sized and publicly traded life science companies and who are committed to supporting the Company’s vision and mission statement. The Special
Bonus also reflects the personal and professional sacrifices made by Executive during such period. The Special Bonus is in addition to the Annual Bonus that Executive may otherwise be entitled to receive. 

3. Option. Executive was granted an option to purchase 120,000 shares of common stock of the Company (the
“Option”) which will be governed by the Company’s 2019 Omnibus Equity Incentive Plan or the adoption of any successor plan (the “Plan”).  

4. Standard Company Benefits. Executive shall, in accordance with Company policy and the terms and conditions of the applicable Company
benefit plan documents, be eligible to participate in the benefit and fringe benefit programs provided by the Company to its executive officers and other employees from time to time. Any such benefits shall be subject to the terms and conditions of
the governing benefit plans and policies and may be changed by the Company in its discretion, provided however, that Executive shall continue to be entitled to five (5) weeks of paid time off per calendar year, with no cap on accruals
thereof.  
 5. Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred
by Executive in furtherance or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.  

6. Indemnification; Proprietary Information Obligations. 

6.1. Indemnification Agreement. Concurrently with the execution of this Agreement, the Company and the Executive shall enter into an
indemnification agreement, in the form attached hereto as Exhibit A. 

  
 2 

 6.2. Proprietary Information Agreement. As a condition of employment, and in
consideration for the benefits provided for in this Agreement, Executive shall sign and comply with the Proprietary Information and Inventions Agreement (the “Proprietary Information Agreement”) attached hereto as
Exhibit B. In addition, Executive agrees to abide by the Company’s policies and procedures, as may be modified from time to time within the Company’s discretion. 

6.3. Third-Party Agreements and Information. Executive represents and warrants that Executive’s employment by the Company does not
conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’s duties under this Agreement without violating any such agreement. Executive represents and warrants
that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, that would be used in connection with Executive’s employment by the Company, except as expressly
authorized by that third party. During Executive’s employment by the Company, Executive will use in the performance of Executive’s duties only information that is generally known and used by persons with training and experience comparable
to Executive’s own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company. 

7. Outside Activities and Non-Competition During Employment. 

7.1. Outside Activities. Throughout Executive’s employment with the Company, Executive may engage in civic and not-for-profit activities so long as such activities do not interfere with the performance of Executive’s duties hereunder or present a conflict of interest with the
Company or its affiliates. Subject to the restrictions set forth herein, and only with prior written disclosure to and consent of the Board, Executive may engage in other types of business or public activities. The Board may rescind such consent, if
the Board determines, in its sole discretion, that such activities compromise or threaten to compromise the Company’s or its affiliates’ business interests or conflict or compete with Executive’s duties to the Company or its
affiliates. 
 7.2. Non-Competition During Employment. Except as otherwise provided in this
Agreement, during Executive’s employment by the Company, Executive will not, without the express written consent of the Board, directly or indirectly serve as an officer, director, stockholder, employee, partner, proprietor, investor, joint
ventures, associate, representative or consultant of any person or entity engaged in, or planning or preparing to engage in, business activity competitive with any line of business engaged in (or planned to be engaged in) by the Company or its
affiliates; provided, however, that Executive may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any enterprise (without participating in the activities of such enterprise) if such securities
are listed on any national or regional securities exchange. In addition, Executive will be subject to certain restrictions (including restrictions continuing after Executive’s employment ends) under the terms of the Proprietary Information
Agreement. 

  
 3 

 8. Termination of Employment; Severance and Change in Control Benefits. 

8.1. At-Will Employment. Executive’s employment relationship is at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without Cause (as defined below) or advance notice.  

8.2. Termination Without Cause or Resignation for Good Reason Unrelated to Change in Control. In the event Executive’s employment
with the Company is terminated by the Company without Cause (and other than as a result of Executive’s death or disability) or Executive resigns for Good Reason, in either case, at any time except during the Change in Control Period (as defined
below), then provided such termination or resignation constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative
definition thereunder, a “Separation from Service”), and provided that Executive satisfies the Release Requirement in Section 9 below, and subject to obtaining any Compensation Committee and/or Board
consideration and approval that is required under the Compensation Policy, the Company shall provide Executive with the following “Severance Benefits”: 

8.2.1. Severance Payments. Severance pay in the form of (i) continuation of payment installments of Executive’s final annual
Base Salary for twelve (12) months following Executive’s Separation from Service plus (ii) a lump sum payment of the pro rata portion of Executive’s Annual Bonus for the year of termination based actual performance, payable when
annual bonuses are payable to other executive officers of the Company (but not later than March 15 of the year following the year of termination), in each case subject to required payroll deductions and tax withholdings (the
“Severance Payments”). Subject to Sections 9 and 10 below, the Base Salary continuation payments shall be made on the Company’s regular payroll schedule in effect following Executive’s
termination date; provided, however that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead accrue and be made on the first regular payroll date following the Release
Effective Date. For such purposes, Executive’s final Base Salary will be calculated prior to giving effect to any reduction in Base Salary that would give rise to Executive’s right to resign for Good Reason.  

8.2.2. Health Care Continuation Coverage Payments. 

(i) COBRA Premiums. If Executive timely elects continued coverage under COBRA, the Company will pay Executive’s COBRA premiums to
continue Executive’s coverage (including coverage for Executive’s eligible dependents, if applicable) (“COBRA Premiums”) for the eighteen (18) month period starting on the day after the date on
which group insurance coverage would, absent COBRA, cease (the “COBRA Premium Period”); provided, however, that the Company’s provision of such COBRA Premium benefits will immediately cease if, during the
COBRA Premium Period, Executive becomes eligible for group health insurance coverage through a new employer or Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event Executive becomes
covered under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the COBRA Premium Period, Executive must immediately notify the Company of such event. 

  
 4 

 (ii) Special Tax Treatment of COBRA Premiums. Notwithstanding the foregoing, if the
Company determines, in its sole discretion, that it cannot pay the COBRA Premiums on a pre-tax basis without potentially incurring financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), the Company shall report the applicable COBRA premiums as compensation includible in the Executive’s gross income for the remainder of the COBRA Premium Period. If the Company
determines, in its sole discretion, that its payment of the COBRA Premiums would cause the Compensation Limits to be exceeded, the amount of COBRA Premiums payable by the Company on behalf of Executive will be reduced, if necessary, so that in no
event will the Compensation Limits be exceeded. Executive will be required to pay the balance of the cost of his COBRA coverage. 
 8.3.
Termination Without Cause or Resignation for Good Reason During Change in Control Period. In the event Executive’s employment with the Company is terminated by the Company without Cause (and other than as a result of Executive’s death
or disability) at any time during the Change in Control Period or Executive resigns for Good Reason at any time during the Change in Control Period and provided that Executive satisfies the Release Requirement in Section 9 below, the Executive
will receive the following: (i) the Severance Payments described in Section 8.2.1, except that the amount of the pro rata portion of the Annual Bonus will be determined based on his target annual bonus for the year in which
Executive’s Separation from Service occurs and the Severance Payments will be paid in a lump sum on the first regular payroll date following the Release Effective Date; (ii) the COBRA Premiums described in Section 8.2.2, except that
the COBRA Premium Period shall be extended from twelve (12) months to eighteen (18) months; (iii) notwithstanding anything to the contrary set forth in option agreements, effective as of Executive’s employment termination date, the
vesting and exercisability of the Option and any other unvested time-based vesting equity awards then held by Executive shall accelerate and become immediately vested and exercisable, if applicable, by Executive upon such termination and shall
remain exercisable, if applicable, following Executive’s termination as set forth in the applicable equity award documents; and (iv) a lump sum payment in an amount equal to his target annual bonus for the year of termination, payable on
the first regular payroll date following the Release Effective Date (collectively, the “CIC Severance Benefit”), in each case subject to applicable tax withholding. Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot provide the CIC Severance Benefit in compliance with the Compensation Policy, to the extent permitted by applicable law the Company instead shall adjust the COBRA Premiums as provided in Section 8.2.2 (ii) and pay to
Executive a fully taxable cash payment with respect to the remaining CIC Severance Benefit equal to fair value of the CIC Severance Benefit (determined without regard to the COBRA Premiums), subject to applicable tax withholding (the “CIC
Substitute Benefit”); provided, however, that the CIC Substitute Benefit shall be reduced, if necessary, so that in no event will the Compensation Limits be exceeded. With respect to any performance-based vesting equity award, such award shall
continue to be governed in all respects by the terms of the applicable equity award documents.  
 8.4. Termination for Cause;
Resignation Without Good Reason; Death or Disability. Executive will not be eligible for, or entitled to any severance benefits, including (without limitation) the benefits listed in Section 8.2 and Section 8.3 above, if
the Company terminates Executive’s employment for Cause, Executive resigns Executive’s employment 

  
 5 

 without Good Reason, or Executive’s employment terminates due to Executive’s death or disability.

 9. Conditions to Receipt of Severance Benefits and CIC Severance Benefit. To be eligible for any of the benefits pursuant to
Section 8 above, Executive must satisfy the following release requirement (the “Release Requirement”): return to the Company a signed and dated general release of all known and unknown claims in a
termination agreement acceptable to the Company (the “Release”) within the applicable deadline set forth therein, but in no event later than forty-five (45) days following Executive’s termination date, and
permit the Release to become effective and irrevocable in accordance with its terms (such effective date of the Release, the “Release Effective Date”). No Severance Benefits or CIC Severance Benefit (or any
substitute benefits provided in lieu of such benefits) will be provided hereunder prior to the Release Effective Date. Accordingly, if Executive breaches the preceding sentence and/or refuses to sign and deliver to the Company an executed Release or
signs and delivers to the Company the Release but exercises Executive’s right, if any, under applicable law to revoke the Release (or any portion thereof), then Executive will not be entitled to any severance, payment or benefit under this
Agreement.  
 10. Section 409A. It is intended that all of the severance benefits and other payments
payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent no so exempt,
this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a
series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company
at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or under any other
agreement with the Company are deemed to be “deferred compensation”, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i)
and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to the earliest of (i) the expiration of the six-month and one day period measured from the
date of Executive’s Separation from Service with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business
day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided
herein or in the applicable agreement. No interest shall be due on any amounts so deferred. If the Company determines that any severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A,
for purposes of determining the schedule for payment of the severance benefits, the effective date of the Release will not be deemed to have occurred any earlier than the sixtieth (60th) date following the Separation From Service, regardless of when
the Release actually 

  
 6 

 becomes effective, so that if the applicable deadline for Executive to execute (and not revoke) the
applicable Release spans two calendar years, payment of the applicable severance benefits shall not commence until the beginning of the second calendar year. To the extent required to avoid accelerated taxation and/or tax penalties under Code
Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement
(and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments
described in this Agreement will be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to any such payment.  

11. Section 280G; Limitations on Payment. 

11.1. If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G
Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of 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 any such 280G Payment provided pursuant to this Agreement (a “Payment”) shall be equal 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 (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of
the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), 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 Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.
If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction
Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata
Reduction Method”).  
 11.2. Notwithstanding any provision of Section 11.1 to the contrary, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method
and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent
possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without
Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or
eliminated) before Payments that are not deferred compensation within the meaning of Section 409A. 
 11.3. Unless Executive and
the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance 

  
 7 

 purposes as of the day prior to the effective date of the Change in Control transaction 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 transaction, the Company shall appoint a nationally recognized
accounting or law firm to make the determinations required by this Section 11. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use
commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen
(15) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company. 

 11.4. If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of
Section 11.1 and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction
pursuant to clause (x) of Section 11.1) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of
Section 11.1, Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.  

12. Definitions. 
 12.1.
Cause. For the purposes of this Agreement, “Cause” means the occurrence of any one or more of the following: (i) Executive’s conviction of or plea of guilty or nolo contendere to any felony or a
crime of moral turpitude; (ii) Executive’s willful and continued failure or refusal to follow lawful and reasonable instructions of the Company or the Board or lawful and reasonable policies and regulations of the Company or its
affiliates; (iii) Executive’s willful and continued failure to faithfully and diligently perform the assigned duties of Executive’s employment with the Company or its affiliates; (iv) unprofessional, unethical, immoral or
fraudulent conduct by Executive that materially discredits the Company or any affiliate of the Company or is materially detrimental to the reputation, character and standing of the the Company or any affiliate of the Company; or
(v) Executive’s material breach of this Agreement, the Proprietary Information Agreement, or any written Company policies. An event described in Section 12.2(ii) through Section 12.2(iv) herein shall not be treated
as “Cause” until after Executive has been given written notice of such event, failure, conduct or breach and Executive fails to cure such event, failure, conduct or breach within 30 days from such written notice; provided, however, that
such 30-day cure period shall not be required if the event, failure, conduct or breach is incapable of being cured.  

12.2. Change in Control. For purposes of this Agreement, “Change in Control” shall mean any of the
following events, provided that such event is closed, consummated, completed, or disposed of on or after June 10, 2019: (i) a sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the
Company is not the surviving entity and in which the holders of the Company’s outstanding voting shares immediately prior to such transaction own, immediately after such transaction, 

  
 8 

 securities representing less than fifty percent (50%) of the voting power of the entity surviving such
transaction or, where the surviving entity is a wholly-owned subsidiary of another entity, the surviving entity’s parent; (iii) a reverse merger in which the Company is the surviving entity but the ordinary shares outstanding immediately
preceding the merger are converted by virtue of the merger into other property, whether in the form of securities of the surviving entity’s parent, cash or otherwise, and in which the holders of the Company’s outstanding voting stock
immediately prior to such transaction own, immediately after such transaction, securities representing less than fifty percent (50%) of the voting power of the Company; or (iv) an acquisition by any person, entity or group (excluding any
employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity controlled by the Company) of the beneficial ownership of securities of the Company representing at least seventy-five
percent (75%) of the combined voting power entitled to vote in the election of directors; provided, however, that nothing in this paragraph shall apply to a sale of assets, merger or other transaction effected exclusively for the purpose of changing
the domicile of the Company and further provided that none of the foregoing transactions shall constitute a Change in Control unless it also constitutes a change in ownership of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v) or a change in ownership of a substantial portion of the assets of the Company within the meaning of Treasury Regulation
Section 1.409A-3(i)(5)(vii). 
 12.3. Change in Control Period. For the purposes of this
Agreement, “Change in Control Period” means the time period commencing on the effective date of a Change in Control and ending on the date that is twelve (12) months after the effective date of a Change in
Control.  
 12.4. Good Reason. For purposes of this Agreement, Executive shall have “Good
Reason” for resignation from employment with the Company if any of the following actions are taken by the Company without Executive’s prior written consent: (i) a material reduction in Executive’s Base Salary, unless
pursuant to a salary reduction program applicable generally to the Company’s senior executives; (ii) a material reduction in Executive’s duties (including responsibilities and/or authorities), provided, however, that (A) a
change in job position (including a change in title) shall not be deemed a “material reduction” in and of itself unless Executive’s new duties are materially reduced from the prior duties, and (B) any reduction in
Executive’s duties which results from Executive serving in a more subordinate role in connection with the Company’s hiring of an individual not previously employed by the Company to serve as its President and/or Chief Executive Officer
shall not be deemed a “material reduction”; or (iii) relocation of Executive’s principal place of employment to a place that increases Executive’s one-way commute by more than fifty
(50) miles as compared to Executive’s then-current principal place of employment immediately prior to such relocation. In order for Executive to resign for Good Reason, each of the following requirements must be met: (iv) Executive
must provide written notice to the Board within 30 days after the first occurrence of the event giving rise to Good Reason setting forth the basis for Executive’s resignation, (v) Executive must allow the Company at least 30 days from
receipt of such written notice to cure such event, (vi) such event is not reasonably cured by the Company within such 30 day period (the “Cure Period”), and (vii) Executive must resign from all
positions Executive then holds with the Company not later than 30 days after the expiration of the Cure Period.  

  
 9 

 13. Insider Trading Policy. Executive hereby acknowledges that Executive has received
and read a copy of the Company’s Insider Trading Policy (the “Trading Policy”). Executive agrees to comply with the specific requirements of the Trading Policy in all respects during Executive’s employment or
other service relationship with the Company. Executive understands that the Trading Policy constitutes a material term of Executive’s employment or other service relationship with the Company and that Executive’s failure to comply in all
respects with the Trading Policy is a basis for termination for Cause.  
 14. Dispute Resolution. Any dispute, controversy, or
claim, whether contractual or non-contractual, between Executive and the Company shall be resolved by binding arbitration before the Judicial Arbitration and Mediation Service (the
“JAMS”), in accordance with the JAMS Employment Arbitration Rules and Procedures, available at www.jamsadr.com. Executive and the Company each agree that before proceeding to arbitration, they will mediate
disputes before the JAMS by a mediator approved by the JAMS. If mediation fails to resolve the matter, any subsequent arbitration shall be conducted by an arbitrator approved by the JAMS and mutually acceptable to Executive and the Company. All
disputes, controversies, and claims shall be conducted by a single arbitrator, who shall: (i) allow discovery authorized by California Code of Civil Procedure Section 1282, et seq., or any other discovery required by applicable law; and
(ii) issue a written award that sets forth the essential findings of fact and conclusions of law on which the award is based. The arbitrator shall have the authority to award any relief authorized by law in connection with the asserted claims
or disputes. Judgment upon the arbitrator’s award may be entered in any court having jurisdiction thereof. If Executive and the Company are unable to agree on the mediator or the arbitrator, then JAMS shall select the mediator/arbitrator. The
resolution of the dispute by the arbitrator shall be final, binding, non-appealable, and fully enforceable by a court of competent jurisdiction under the Federal Arbitration Act. The arbitration award shall be
in writing and shall include a statement of the reasons for the award. The arbitration shall be held in San Diego, California. The Company shall pay all JAMS, mediation, and arbitrator’s fees and costs, irrespective of who raised the claim and
the outcome of arbitration.  
 15. General Provisions. 

15.1. Clawback. Notwithstanding anything to the contrary in this Agreement, all compensation paid to Executive by the Company (whether
payable pursuant to this Agreement or otherwise) will be subject to reduction, recovery and/or recoupment to the extent required and allowed by any present or future law, government regulation or stock exchange listing requirement (or any policy
adopted by the Company which ensures compliance with the requirements of any such law, government regulation or stock exchange listing requirement).  

15.2. Resignation from Positions. Notwithstanding any other provision of this Agreement to the contrary, upon any termination of
employment (whether voluntary or involuntary), Executive, upon written request from the Board, shall immediately resign from any positions Executive has with the Company and any subsidiary or other affiliate thereof, whether as an executive,
officer, employee, consultant, director, trustee, fiduciary or otherwise.  
 15.3. Notices. Any notices provided must be in
writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next 

  
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 day after sending by overnight carrier, to the Company at its primary office location and to Executive at
the address as listed on the Company payroll. 
 15.4. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the
parties.  
 15.5. Waiver. Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and
it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.  

15.6. Complete Agreement. This Agreement, together with the Indemnification Agreement and Proprietary Information and Inventions
Agreement, constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof and is the complete, final, and exclusive embodiment of the Company’s and Executive’s agreement with regard to this
subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes and replaces any other agreements or promises made to Executive by
anyone concerning Executive’s employment terms, compensation or benefits, whether oral or written (including but not limited any agreements or promises with or from the Company or any of its affiliates or predecessors). It cannot be modified or
amended except in a writing signed by a duly authorized officer of the Company, with the exception of those changes expressly reserved to the Company’s discretion in this Agreement.  

15.7. Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than
one party, but both of which taken together will constitute one and the same Agreement.  
 15.8. Headings. The headings of the
sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.  

15.9. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder without the
written consent of the Company, which shall not be withheld unreasonably.  
 15.10. Tax Withholding. All payments and awards
contemplated or made pursuant to this Agreement will be subject to withholdings of applicable taxes in compliance with all relevant laws and regulations of all appropriate government authorities. Executive acknowledges and agrees that the Company
has neither made any assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant to 

  
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 this Agreement. Executive has had the opportunity to retain a tax and financial advisor and fully
understands the tax and economic consequences of all payments and awards made pursuant to this Agreement. 
 15.11. Choice of Law. All
questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of California. 

  
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 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above. 
 ARCTURUS THERAPEUTICS HOLDINGS INC. 

 

							
	By:	 	 /s/ Andy Sassine
	 		 	Date: June 13, 2019
		 	Name: Andy Sassine	 	        	 	
		 	Title: Chief Financial Officer	 		 	
				
		 	JOSEPH E. PAYNE	 		 	
				
		 	 /s/ Joseph E. Payne
	 		 	 Date: June 13, 2019

		 	Joseph E. Payne

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