AMENDMENT OF EXECUTIVE SEVERANCE AGREEMENT
Exhibit 10.1
AMENDMENT OF
THIS AMENDMENT made as of the 31st day of December, 2008, by and between PFSweb,
Inc., a Delaware corporation (the “Company”), and the individual whose name appears on the
signature page hereof as the “Executive” hereunder.
WHEREAS, the Company and the Executive are parties to that certain Executive Severance
Agreement (the “Agreement”); and
WHEREAS, the Company and the Executive wish to amend the Agreement as good faith compliance
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations
thereunder and related guidance issued by the Internal Revenue Service (“IRS”);
NOW, THEREFORE, it is agreed that the Agreement be and hereby is amended as follows:
FIRST: Section 1, “Definitions,” (a) Except as otherwise defined herein, terms used
herein shall have the same meaning ascribed thereto in the Agreement.
(b) In Section 1, the definition of “Qualifying Termination” is deleted in its entirety and is
hereby replaced to read as follows:
“Qualifying Termination” means the termination by the
Company of Executive’s employment other than a Termination for
Cause, but including termination by reason of the Executive’s death
or disability. “Disability” shall mean that an Executive is unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months. The term “Qualifying
Termination” shall not include the termination by Executive of his
employment, unless such termination is with “Good Reason.” “Good
Reason” shall mean that the Executive has complied with the “Good
Reason Process” following a material reduction by the Company of the
Executive’s annual base salary from its then current amount, other
than a reduction which is part of, and proportionate with, a general
reduction of annual base salaries of not less than three-quarters
(in number) of the Company’s officers. “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 Company in writing of the occurrence of the Good Reason event
within 90 days of the occurrence of such event; (C) the Executive
cooperates in good faith with the Company’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 Company; and (D) notwithstanding such efforts, the
Good Reason event continues to exist and has not been modified in a
manner acceptable to the Executive. If the Company 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) Section 1 is further amended by adding the definition of “Specified Employee” as follows:
“Specified Employee” is an employee who, as of the employee’s date
of termination, is a key employee of the Employer within the meaning
of Section 416(i)(1)(A)(i), (ii), or (iii) of the Code (applied in
accordance with the regulations thereunder and disregarding Section
416(i)(5)) at any time during the 12-month period ending on a
Specified Employee Identification Date. If an Employee is a key
employee as of a Specified Employee Identification Date, the
Employee is treated as a key employee for purposes of the Agreement
for the entire 12-month period beginning on the Specified Employee
Effective Date.
(d) Section 1 is further amended by adding the definition of “Specified Employee
Identification Date” as follows:
“Specified Employee Identification Date” shall mean December 31 of
each year.
SECOND: Section 2(a) (ii) of the Agreement is amended so that the term “S” as used
therein shall be defined as follows:
“S” = Executive’s highest annual rate of base salary during the
12-month period immediately prior to the effective date of the
Qualifying Termination.”
THIRD: The following language is being added as a new Section 10 of the Agreement and
the corresponding sections of the Agreement will be renumbered accordingly:
10. Compliance with Section 409A. Anything in this Agreement
to the contrary notwithstanding, if at the time of the Executive’s
date of termination, the Executive is considered a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Code, 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(a) of
the Code as a result of the application of Section 409A(a)(2)(B)(i)
of the Code, then (A) no such payment shall be payable prior to the
date that is the earlier of (i) six months after the Executive’s
separation from service, or (ii) the Employee’s death and
(B) promptly following the date of termination, the
Company agrees to place such payment in escrow with a third party
escrow agent pending the release date set forth in the preceding
clause (A). The parties agree that this Agreement may be amended,
as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and
regulations in order to preserve the payments and benefits provided
hereunder without additional cost to either party.
FOURTH: The effective date of this Amendment shall be December 31, 2008.
FIFTH: In all other respects, the Agreement is hereby ratified and confirmed.
IN WITNESS WHEREOF the parties hereto have set their hands as of the date set forth above.
| PFSweb, Inc. | ||||||
| By: | ||||||
Title: |
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| Executive: | ||||||
| Print Name: | ||||||
