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) bel ...