Change in Control Severance Agreement - PFSWeb Inc.
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the ______ day of June,
2000 by and between PFSweb, Inc., a Delaware corporation (the "Company"), and
__________________________________ ("Executive").
W I T N E S S E T H
WHEREAS, the Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders; and
WHEREAS, the Company recognizes that, as is the case with many
publicly held corporations, the possibility of a change in control may arise and
that such possibility may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued and undivided
dedication to his duties in the event of any threat or occurrence of a Change in
Control (as defined in Section 1) of the Company; and
WHEREAS, the Board has authorized the Company to enter into
this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
"Board" means the Board of Directors of the Company.
"Bonus Amount" means the greater of (i) the highest annual
incentive bonus earned by Executive from the Company (or its affiliates) during
the last three (3) completed fiscal years of the Company immediately preceding
Executive's Date of Termination (annualized in the event Executive was not
employed by the Company (or its affiliates) for the whole of any such fiscal
year) or (ii) the Executive's target bonus for the fiscal year of the Company
which includes the Executive's Date of Termination.
"Cause" means (i) the willful and continued failure of
Executive to perform substantially his duties with the Company (other than any
such failure resulting from Executive's incapacity due to physical or mental
illness or any such failure subsequent to Executive being delivered a Notice of
Termination without Cause by the Company or
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delivering a Notice of Termination for Good Reason to the Company) after a
written demand for substantial performance is delivered to Executive by the
Board which specifically identifies the manner in which the Board believes that
Executive has not substantially performed Executive's duties, or (ii) the
willful engaging by Executive in illegal conduct or gross misconduct which is
demonstrably and materially injurious to the Company or its affiliates. For
purpose of the preceding sentence, no act or failure to act by Executive shall
be considered "willful" unless done or omitted to be done by Executive in bad
faith and without reasonable belief that Executive's action or omission was in
the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board, based upon
the advice of counsel for the Company (or upon the instructions of the Company's
chief executive officer or another senior officer of the Company) shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Cause shall not exist unless and
until the Company has delivered to Executive a copy of a resolution duly adopted
by a majority of the entire Board (excluding Executive if Executive is a Board
member) at a meeting of the Board called and held for such purpose (after
reasonable notice to Executive and an opportunity for Executive, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board an event set forth in clauses (1) or (2) has occurred and
specifying the particulars thereof in detail. The Company must notify Executive
of any event constituting Cause within ninety (90) days following the Company's
knowledge of its existence or such event shall not constitute Cause under this
Agreement.
"Change in Control" means the occurrence of any one of the
following events:
(1) individuals who, on the date of this Agreement,
constitute the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to the date of this Agreement, whose election or nomination
for election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially elected or nominated
as a director of the Company as a result of an actual or threatened election
contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies (or consents) by or on behalf of any person
other than the Board shall be deemed to be an Incumbent Director;
(2) any "Person" (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the "Company Voting Securities"); provided,
however, that the event described in this paragraph (ii) shall not be deemed to
be a Change in Control by virtue of any of the following acquisitions: (A) by
the Company or any Subsidiary, (B) by any employee benefit plan (or related
trust) sponsored or maintained by the
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Company or any Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)), or (E) pursuant to any acquisition
by Executive or any group of persons including Executive (or any entity
controlled by Executive or any group of persons including Executive);
(3) the consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction involving the
Company or any of its Subsidiaries that requires the approval of the Company's
stockholders, whether for such transaction or the issuance of securities in the
transaction (a "Business Combination"), unless immediately following such
Business Combination: (A) more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof immediately prior to the
Business Combination, (B) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner, directly or indirectly,
of 30% or more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction); or
(4) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets.
Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 30% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.
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"Date of Termination" means (1) the effective date on which
Executive's employment by the Company terminates as specified in a prior written
notice by the Company or Executive, as the case may be, to the other, delivered
pursuant to Section 10 or (2) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.
"Disability" means termination of Executive's employment by
the Company due to Executive's absence from Executive's duties with the Company
on a full-time basis for at least one hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness.
"Good Reason" means, without Executive's express written
consent, the occurrence of any of the following events after a Change in
Control:
(1) (A) any change in the duties or responsibilities
(including reporting responsibilities) of Executive that is inconsistent in any
material and adverse respect with Executive's position(s), duties,
responsibilities or status with the Company immediately prior to such Change in
Control (including any material and adverse diminution of such duties or
responsibilities); provided, however, that Good Reason shall not be deemed to
occur upon a change in duties or responsibilities (other than reporting
responsibilities) that is solely and directly a result of the Company no longer
being a publicly traded entity and does not involve any other event set forth in
this paragraph (g) or (B) a material and adverse change in Executive's titles or
offices (including, if applicable, membership on the Board) with the Company as
in effect immediately prior to such Change in Control;
(2) a reduction by the Company in Executive's rate of
annual base salary or annual target bonus opportunity (including any material
and adverse change in the formula for such annual bonus target) as in effect
immediately prior to such Change in Control or as the same may be increased from
time to time thereafter;
(3) any requirement of the Company that Executive (A)
be based anywhere more than thirty-five (35) miles from the office where
Executive is located at the time of the Change in Control, if such relocation
increases Executive's commute by more than twenty (20) miles, or (B) travel on
Company business to an extent substantially greater than the travel obligations
of Executive immediately prior to such Change in Control;
(4) the failure of the Company to (A) continue in
effect any employee benefit plan, compensation plan, welfare benefit plan or
material fringe benefit plan in which Executive is participating immediately
prior to such Change in Control or the taking of any action by the Company which
would adversely affect Executive's participation in or reduce Executive's
benefits under any such plan, unless Executive is permitted to participate in
other plans providing Executive with substantially equivalent benefits in the
aggregate (at substantially equivalent cost with respect to welfare benefit
plans), or (B) provide Executive with paid vacation in accordance with the most
favorable vacation policies of the Company as in effect for Executive
immediately prior to such Change in Control, including the crediting of
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all service for which Executive had been credited under such vacation policies
prior to the Change in Control;
(5) any refusal by the Company to continue to permit
Executive to engage in activities not directly related to the business of the
Company which Executive was permitted to engage in prior to the Change in
Control;
(6) any purported termination of Executive's
employment which is not effectuated pursuant to Section 10(b) (and which will
not constitute a termination hereunder); or
(7) the failure of the Company to obtain the
assumption (and, if applicable, guarantee) agreement from any successor (and, if
applicable, Parent Corporation) as contemplated in Section 9(b).
An isolated, insubstantial and inadvertent action taken in good faith and which
is remedied by the Company within ten (10) days after receipt of notice thereof
given by Executive shall not constitute Good Reason. Executive's right to
terminate employment for Good Reason shall not be affected by Executive's
incapacity due to mental or physical illness and Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any event or condition constituting Good Reason; provided, however, that
Executive must provide notice of termination of employment within ninety (90)
days following Executive's knowledge of an event constituting Good Reason or
such event shall not constitute Good Reason under this Agreement).
"Qualifying Termination" means a termination of Executive's
employment (i) by the Company other than for Cause or (ii) by Executive for Good
Reason. Termination of Executive's employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination.
"Subsidiary" means any corporation or other entity in which
the Company has a direct or indirect ownership interest of 50% or more of the
total combined voting power of the then outstanding securities or interests of
such corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets upon liquidation or dissolution.
"Termination Period" means the period of time beginning with a
Change in Control and ending two (2) years following such Change in Control.
Notwithstanding anything in this Agreement to the contrary, if (i) Executive's
employment is terminated prior to a Change in Control for reasons that would
have constituted a Qualifying Termination if they had occurred following a
Change in Control; (ii) Executive reasonably demonstrates that such termination
(or Good Reason event) was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change in Control;
and (iii) a Change in Control involving such third party (or a party competing
with such third party to effectuate a Change in Control) does occur, then for
purposes of this Agreement, the date
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immediately prior to the date of such termination of employment or event
constituting Good Reason shall be treated as a Change in Control. For purposes
of determining the timing of payments and benefits to Executive under Section 4,
the date of the actual Change in Control shall of treated as Executive's Date of
Termination under Section l(e).
2. Obligation of Executive. In the event of a tender or
exchange offer, proxy contest, or the execution of any agreement which, if
consummated, would constitute a Change in Control, Executive agrees not to
voluntarily leave the employ of the Company, other than as a result of
Disability or an event which would constitute Good Reason if a Change in Control
had occurred, until the Change in Control occurs or, if earlier, such tender or
exchange offer, proxy contest, or agreement is terminated or abandoned.
3. Term of Agreement. This Agreement shall be effective on the
date hereof and shall continue in effect until the Company shall have given
three (3) years' written notice of cancellation; provided, that, notwithstanding
the delivery of any such notice, this Agreement shall continue in effect for a
period of two (2) years after a Change in Control, if such Change in Control
shall have occurred during the term of this Agreement. Notwithstanding anything
in this Section to the contrary, this Agreement shall terminate if Executive or
the Company terminates Executive's employment prior to a Change in Control
except as provided in Section l(j).
4. Payments and Benefits
(a) Qualifying Termination - Severance. If during the
Termination Period the employment of Executive shall terminate pursuant to a
Qualifying Termination, then the Company shall pay to Executive:
(1) within ten (10) days following the Date of
Termination a lump-sum cash amount equal to the sum of (A) Executive's base
salary through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred, (B) a pro rata portion
of Executive's annual bonus for the fiscal year in which Executive's Date of
Termination occurs in an amount at least equal to (1) Executive's Bonus Amount,
multiplied by (2) a fraction, the numerator of which is the number of days in
the fiscal year in which the Date of Termination occurs through the Date of
Termination and the denominator of which is three hundred sixty-five (365), and
reduced by (3) any amounts paid from the Company's annual incentive plan for the
fiscal year in which Executive's Date of Termination occurs, and (C), any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid; plus
(2) within ten (10) days following the Date of
Termination, a lump-sum cash amount equal to (i) two (2) times Executive's
highest annual rate of base salary during the 12-month period immediately prior
to Executive's Date of Termination, plus (ii) two (2) times Executive's Bonus
Amount, plus (iii) the value of any Company-provided benefits under the
Company's 401(k) Plan which Executive would have accrued in the two (2) years
following
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the Date of Termination had he remained employed by the Company during such
period, calculated assuming that both the Executive and the Company contributed
the highest permissible amounts to the plans during such period.
(b) Qualifying Termination - Benefits. If during the
Termination Period the employment of Executive shall terminate pursuant to a
Qualifying Termination, the Company shall continue to provide, for a period of
two (2) years following Executive's Date of Termination, Executive (and
Executive's dependents, if applicable) with the same level of medical, dental,
accident, disability and life insurance benefits upon substantially the same
terms and conditions (including contributions required by Executive for such
benefits) as existed immediately prior to Executive's Date of Termination (or,
if more favorable to Executive, as such benefits and terms and conditions
existed immediately prior to the Change in Control); provided, that, if
Executive cannot continue to participate in the Company plans providing such
benefits, the Company shall otherwise provide such benefits on the same
after-tax basis as if continued participation had been permitted.
Notwithstanding the foregoing, in the event Executive becomes reemployed with
another employer and becomes eligible to receive welfare benefits from such
employer, the welfare benefits described herein shall be secondary to such
benefits during the period of Executive's eligibility, but only to the extent
that the Company reimburses Executive for any increased cost and provides any
additional benefits necessary to give Executive the benefits provided hereunder.
(c) Nonqualifying Termination. If during the
Termination Period the employment of Executive shall terminate other than by
reason of a Qualifying Termination, then the Company shall pay to Executive
within thirty (30) days following the Date of Termination, a lump-sum cash
amount equal to the sum of (1) Executive's base salary through the Date of
Termination and any bonus amounts which have become payable, to the extent not
theretofore paid or deferred, and (2) any compensation previously deferred by
Executive other than pursuant to a tax-qualified plan (together with any
interest and earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid. The Company may make such additional payments, and
provide such additional benefits, to Executive as the Company and Executive may
agree in writing.
(d) Stock Options. In the event of a Change in
Control, all options to purchase Company stock held by Executive ("Options")
which are not fully vested and exercisable shall become fully vested and
exercisable as of a time established by the Board, which shall be no later than
a time preceding the Change in Control which allows Executive to exercise the
Options and cause the stock acquired thereby to participate in the Change in
Control transaction. If the Change in Control transaction is structured such
that stock participating therein at one time is or may be treated differently
than stock participating therein at a different time (e.g., a tender offer
followed by a squeeze-out merger, with differing forms or amounts of
consideration), the Board shall interpret this paragraph (d) to provide for the
required vesting acceleration in a manner designed to allow Executive to
exercise the Options and cause the stock acquired thereby to participate in the
earliest portion of the Change in Control transaction. If the consummation of a
pending or threatened Change in Control transaction is uncertain (e.g., a tender
offer in which the tender of a minimum number of
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shares is a condition to closing, or a voted merger or proxy contest in which a
minimum number of votes is a condition to closing), the Board shall apply this
paragraph (d) by using its best efforts to determine if and when the Change in
Control transaction is likely to occur, and proceeding accordingly. To the
extent necessary to implement this Section 4(d), each stock option agreement
reflecting the Options, and each stock option plan relating to each such stock
option agreement, if any, shall be deemed amended.
5. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment, award,
benefit or distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or
for the benefit of Executive (whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5) (the "Payments") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the Company
shall pay to Executive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in Executive's adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to (I) pay federal income taxes
at the highest marginal rates of federal income taxation for the calendar year
in which the Gross-Up Payment is to be made, (ii) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes and (iii) have otherwise allowable deductions for federal income tax
purposes at least equal to those which could be disallowed because of the
inclusion of the Gross-Up Payment in the Executive's adjusted gross income.
(b) Subject to the provisions of Section 5(a), all
determinations required to be made under this Section 5, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determinations, shall be made by
the public accounting firm that is retained by the Company as of the date
immediately prior to the Change in Control (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from the Company or
the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the "Determination"). In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive may appoint
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another nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company and the Company shall enter into any agreement
requested by the Accounting Firm in connection with the performance of the
services hereunder. The Gross-Up Payment under this Section 5 with respect to
any Payments shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such effect, and
to the effect that failure to report the Excise Tax, if any, on Executive's
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. The Determination by the Accounting Firm shall be
binding upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment") or Gross-Up Payments are made by the
Company which should not have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that the Executive
thereafter is required to make payment of any Excise Tax or additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to
or for the benefit of Executive. In the event the amount of the Gross-Up Payment
exceeds the amount necessary to reimburse the Executive for his Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been made
and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he
has received a refund if the applicable Excise Tax has been paid to the Internal
Revenue Service) to or for the benefit of the Company. Executive shall
cooperate, to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes
with the Internal Revenue Service in connection with the Excise Tax.
6. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom.
7. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's employment with
the Company or involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contest or dispute (regardless of the result
thereof), together with interest in an amount equal to the Chase Manhattan Bank
prime rate from time to time in effect, but in no event higher than the maximum
legal rate permissible under applicable law, such interest to accrue from the
date the Company receives Executive's statement for such fees and expenses
through the date of payment thereof, regardless of whether or not Executive's
claim is upheld by a court of competent jurisdiction; provided, however,
Executive shall be required to repay any such amounts to the Company to the
extent that a court issues a final order from which no appeal can be taken, or
with respect
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to which the time period to appeal has expired, setting forth the determination
that the position taken by Executive was frivolous or advanced by Executive in
bad faith.
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company or its
Subsidiaries, and if Executive's employment with the Company shall terminate
prior to a Change in Control, Executive shall have no further rights under this
Agreement (except as otherwise provided hereunder); provided, however, that any
termination of Executive's employment during the Termination Period shall be
subject to all of the provisions of this Agreement.
9. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any
Business Combination. In the event of any Business Combination, the provisions
of this Agreement shall be binding upon the Surviving Corporation, and such
Surviving Corporation shall be treated as the Company hereunder.
(b) The Company agrees that in connection with any
Business Combination, it will cause any successor entity to the Company
unconditionally to assume (and for any Parent Corporation in such Business
Combination to guarantee), by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of the Company hereunder. Failure
of the Company to obtain such assumption and guarantee prior to the
effectiveness of any such Business Combination that constitutes a Change in
Control, shall be a breach of this Agreement and shall constitute Good Reason
hereunder and shall entitle Executive to compensation and other benefits from
the Company in the same amount and on the same terms as Executive would be
entitled hereunder if Executive's employment were terminated following a Change
in Control by reason of a Qualifying Termination. For purposes of implementing
the foregoing, the date on which any such Business Combination becomes effective
shall be deemed the date Good Reason occurs, and shall be the Date of
Termination if requested by Executive.
(c) This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.
10. Notice. (a) For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five (5) days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed as follows:
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If to the Executive to the most recent address of such Executive on the books
and records of the Company; and
If to the Company:
PFSweb, Inc.
500 North Central Expressway
Plano, Texas 75074
Attention: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of
Termination by the Company or Executive, as the case may be, to the other, shall
(i) indicate the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) specify the termination
date (which date shall be not less than fifteen (15) (thirty (30), if
termination is by the Company for Disability) nor more than sixty (60) days
after the giving of such notice). The failure by Executive or the Company to set
forth in such notice any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of Executive or the Company
hereunder or preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights hereunder.
11. Full Settlement; Resolution of Disputes. The Company's
obligation to make any payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall be in lieu and in full settlement of all
other severance payments to Executive under any other severance or employment
agreement between Executive and the Company, and any severance plan of the
Company. The Company's obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b), such amounts shall not be reduced
whether or not Executive obtains other employment.
12. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any Subsidiary.
13. Survival. The respective obligations and benefits afforded
to the Company and Executive as provided in Sections 4 (to the extent that
payments or benefits are owed as a result of a termination of employment that
occurs during the term of this Agreement), 5 (to the extent that Payments are
made to Executive as a result of a Change in Control that occurs
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during the term of this Agreement), 6, 7, 9(c) and 11 shall survive the
termination of this Agreement.
14. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, OF SUCH PRINCIPLES OF ANY
OTHER JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE. THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE
VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER
PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.
15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by Executive or the Company to insist upon strict compliance with
any provision of this Agreement or to assert any right Executive or the Company
may have hereunder, including, without limitation, the right of Executive to
terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement. Except as
otherwise specifically provided herein, the rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement are in
addition to any rights of, or benefits payable to, Executive, his estate or his
beneficiaries under any other employee benefit plan or compensation program of
the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
PFSweb, Inc.
By:
--------------------------------
Title: Chairman
-----------------------------------
[EXECUTIVE]
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