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PFSweb - NON-EMPLOYEE DIRECTOR STOCK OPTION-RETAINER PLAN
EXHIBIT 10.1
NON-EMPLOYEE DIRECTOR STOCK OPTION AND RETAINER PLAN
PFSWEB, INC.
PFSweb, Inc., a corporation organized under the laws of the State of Delaware, hereby adopts this Non-Employee Director Stock Option and Retainer Plan. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the Company by providing incentives to its non-employee Directors by assisting them to become owners of the Company's Common Stock and thus to benefit directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of qualified non-employee Directors in order to contribute to the long-range success of the Company by providing and offering them an opportunity to become owners of the Company's Common Stock.
ARTICLE I
Whenever the following terms are used in this Plan, they shall have the meaning specified below unless the context clearly indicates to the contrary. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, where the context so indicates.
Section 1.1 - Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Committee
"Committee" shall mean the Committee appointed by the Board, as provided in Section 6.1.
Section 1.4 - Company
"Company" shall mean PFSweb, Inc., a Delaware corporation.
Section 1.5 - Director
"Director" shall mean a member of the Board who is not an Employee.
Section 1.6 - Effective Date
"Effective Date" shall mean the date upon which this Plan shall be approved by the stockholder(s) of the Company in accordance with the Company's bylaws.
Section 1.7 - Employee
"Employee" shall mean any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Code) of the Company, or of any corporation which is then a Subsidiary.
Section 1.8 - Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.9 - Non-Qualified Option
"Non-Qualified Option" shall mean an Option which is not an incentive stock option and is not qualified under Section 422 of the Code.
Section 1.10 - Officer
"Officer" shall mean an officer of the Company, as defined in Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
Section 1.11 - Option
"Option" shall mean an option to purchase Common Stock of the Company granted under the Plan.
Section 1.12 - Optionee
"Optionee" shall mean a Director to whom an Option is granted under the Plan.
Section 1.13 - Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Section 1.14 - Plan
"Plan" shall mean this Non-Employee Director Stock Option and Retainer Plan of PFSweb, Inc.
Section 1.15 - Retainer
"Retainer" shall mean the annual cash retainer payable to each Director for services as a member of the Board and any committee or committees of the Board.
Section 1.16 - Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended in the future.
Section 1.17 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.18 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.19 - Shares
"Shares" shall mean shares of the Company's Common Stock.
Section 1.20 - Spin-off
"Spin-off" shall mean the separation of the Company from its Parent Corporation by means of a distribution of Shares to the stockholders of such Parent Corporation or by such other means or transaction as such Parent Corporation shall determine in its discretion.
Section 1.21 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
Section 1.22 - Termination
"Termination" shall mean the time when the Director no longer serves as a member of the Board, including, but not by way of limitation, a termination by resignation, discharge, death or retirement.
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject to Plan
The Shares of stock subject to this Plan shall be shares of the Company's Common Stock. The aggregate number of such Shares which may be issued pursuant to this Plan shall be 250,000.
Section 2.2 - Unexercised Options
If any Option expires or is canceled without having been fully exercised, the number of Shares subject to such Option but as to which such Option was not exercised prior to its expiration or cancellation, may again be optioned hereunder, subject to the limitations of Section 2.1.
Section 2.3 - Changes in Company's Shares
In the event that the outstanding Shares of Common Stock of the Company are hereafter changed into or exchanged for a different number or kind of shares or other securities of the Company, or of another corporation, or in the event of any other capital transaction involving the outstanding shares of Common Stock of the Company as the Committee shall determine in its sole discretion, whether by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, stock dividend, combination of shares or otherwise, appropriate adjustments shall be made by the Committee in the number and kind of Shares which may be issued hereunder, including adjustment to the number, exercise price and kind of shares for the purchase of which Options may be granted, and further including adjustments of the limitations in Section 2.1 on the maximum number and kind of shares which may be issued hereunder and adjustments to the number of Options set forth in Section 3.5 below.
ARTICLE III
RETAINER FEES AND GRANTING OF OPTIONS
Section 3.1 - Payment of Retainer
(a) Each Director may elect under the Plan to receive payment of any Retainer (in such installments as such Retainer shall be payable) in Shares, in lieu of cash, by submitting a written election (the "Notice of Election") to the Company. The Notice of Election shall become effective six months following the date of the Notice of Election or such earlier date as may be permitted under Rule 16b-3 (the "Election Effective Date") and, from and after the Election Effective Date, all Retainers payable to the electing Director (whether in installments or otherwise) shall be payable in Shares in the manner set forth herein. Notwithstanding the foregoing, no Election Effective Date shall be effective prior to the completion of the Spin-off unless the Parent Corporation shall otherwise consent thereto.
(b) Subject to the foregoing, each Notice of Election shall become effective on its Election Effective Date and shall continue in effect until revoked by the electing Director in a written notice of revocation (the "Notice of Revocation") delivered to the Company; provided, however, that no Notice of Revocation shall become effective until six months following the date of the Notice of Revocation or such earlier date as may be permitted under Rule 16b-3.
(c) If no Notice of Election is submitted to the Company, and prior to any Election Effective Date, all Retainers shall be payable in cash.
Section 3.2 - Number of Shares
The number of Shares to be issued to each Director electing to have his or her Retainer paid in Shares shall be determined by dividing the dollar amount of the then payable Retainer by the fair market value of the Shares as of the most recent trading day immediately prior to the date the Retainer is otherwise payable. No fractional Shares shall be issued and any fractional Share shall be rounded to the nearest whole Share. Subject to the terms and provisions hereof, all Shares shall be issued in certificate form in the name of the Director (or any designee) as promptly as practicable following the date of payment. For purposes of this Section, fair market value shall be determined in accordance with Section 4.2(b) below.
Section 3.3 - Eligibility
Each Director shall be granted Options in accordance with the provisions set forth herein.
Section 3.4 - Non-Qualification of Options
Each Option shall be a Non-Qualified Option.
Section 3.5 - Granting of Options
(a) Each person who is a Director on the Effective Date shall receive an Option to purchase 35,000 Shares as of such date.
(b) Each person who is a Director immediately following each annual meeting of stockholders of the Company shall receive an Option to purchase 10,000 Shares as of the date of such annual meeting; provided that such Director shall have attended at least 75% of the meetings of the Board (which may include committee meetings) during the most recent completed fiscal year prior to such annual meeting (or such shorter period of time as such Director held office during such fiscal year).
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Agreement
Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by the Optionee and an authorized Officer of the Company and which shall contain such terms and conditions as are consistent with the Plan.
Section 4.2 - Option Price
(a) The price of the Shares subject to each Option shall be equal to 100% of the fair market value of such Shares on the date such Option is granted.
(b) For purposes of the Plan, the fair market value of a Share of the Company's Common Stock as of a given date shall be: (i) the closing price of a Share of the Company's Common Stock on the principal exchange on which Shares of the Company's Common Stock are then trading; or (ii) if such Common Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, (1) the last sales price (if the Company's Common Stock is then listed as a National Market Issue under the NASD National Market System) or (2) the mean between the closing representative bid and asked prices (in all other cases) for the Company's Common Stock, in each case, on such date as reported by NASDAQ or such successor quotation system; or (iii) if such Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the mean between the closing bid and asked prices for the Company's Common Stock, on such date, as determined in good faith by the Committee; or (iv) if the Company's Common Stock is not publicly traded, the fair market value established by the Committee acting in good faith.
Section 4.3 - Commencement of Exercisability
(a) No Option may be exercised in whole or in part during the six months after such Option is granted.
(b) Subject to the provisions hereof, each Option granted hereunder shall be subject to the following cumulative vesting schedule:
(i) Until the date which is one year from the date of
grant, the Option shall not be vested and shall not be exercisable as
to any of the shares subject thereto; and
(ii) From and after the date which is one year from the
date of grant, the Option shall vest and be fully exercisable.
(c) Notwithstanding the foregoing, all Options issued hereunder prior to the effective date of the Spin-off shall not vest or be exercisable until three years from the date of grant, provided, however, that as of the effective date of the Spin-off, all Options issued prior to the effective date of the Spin-off shall vest and be exercisable upon the later of (i) the effective date of the Spin-off and (ii) one year from the date of grant.
Section 4.4 - Expiration of Options
No Option may be exercised to any extent after the first to occur of the following events:
(i) The expiration of ten years from the date the Option
was granted; or
(ii) Except in the case of any Optionee who is disabled
(within the meaning of Section 22(e)(3) of the Code), the expiration of
three months from the date of the Optionee's Termination for any reason
other than such Optionee's death; or
(iii) With respect to an Option held by an Optionee who is
disabled (within the meaning of Section 22(e)(3) of the Code), the
expiration of one year from the date of the Optionee's Termination for
any reason other than such Optionee's death unless the Optionee dies
within said one-year period; or
(iv) T...
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