Form of Performance Stock Unit (PSU) Agreement under 2015 Equity Incentive Plan

Total Number of Performance

Stock Units Granted at Target:

[●] PSUs (the “Award”)

Performance Conditions:

Except as otherwise provided in the Performance Stock Unit Agreement, vesting will be based on your continuous Service (as described below) and achievement of certain performance goals relating to the following four equally-weighted performance metrics (collectively, the “Performance Conditions”): (i) Gross Merchandise Sales (as defined in Exhibit A of the Performance Stock Unit Agreement), (ii) Revenue (as defined in Exhibit A of the Performance Stock Unit Agreement), (iii) Adjusted EBITDA (as defined in Exhibit A of the Performance Stock Unit Agreement) (the PSUs subject to performance metrics (i), (ii) and (iii), the “Financial PSUs”)) and (iv) relative total shareholder return compared to the Comparator Group (as defined in Exhibit A of the Performance Stock Unit Agreement) (the “Relative TSR PSUs”), in each case, determined, except as otherwise provided herein, at the end of the three-year Performance Period (as defined on Exhibit A of the Performance Stock Unit Agreement).

Subject to the terms and conditions of the Plan and the Performance Stock Unit Agreement, (A) 33 1/3% of the Financial PSUs earned based on the achievement of the Performance Conditions will vest on each of (i) [●], (ii) [●] and (iii) [●] (together, the “Financial PSU Vesting Dates”); and (B) 100% of the Relative TSR PSUs earned based on the achievement of the Performance Conditions will vest on [●] (the “Relative TSR PSU Vesting Date” and together with the “Financial PSU Vesting Dates,” the “Vesting Dates”), in each case, subject to your continuous Service through each such Vesting Date or as otherwise set forth in the Performance Stock Unit Agreement. The portion, if any, of the PSUs that shall vest shall range from 0% to 200% of the Target number of shares underlying the Award based on the achievement of performance against the Performance Goals as set forth in the Performance Stock Unit Agreement, as determined in accordance with the methodology set out on Exhibit A of the Performance Stock Unit Agreement.

Subject to all of the terms and conditions set forth in the Notice of Performance Stock Unit Award, this Performance Stock Unit Agreement (the “Agreement”) and the Plan, the Company has granted to you a target number of PSUs as set forth in the Notice of Performance Stock Unit Award. The PSUs shall be credited to a separate account maintained for you on the books of the Company (the “Account”). On any given date, the value of each PSU comprising the Award shall equal the Fair Market Value of one share of common stock of the Company (each, a “Common Share”). The Award shall vest and settle as set forth below.

The Award shall be eligible to vest as provided in this Section of the Performance Stock Unit Agreement and shall become earned to the extent provided in the tables set forth on Exhibit A attached hereto if, and to the extent that, (A) your Service continues through each of the Vesting Dates or as otherwise set forth below and (B) the Administrator (as defined on Exhibit A attached hereto) certifies that the Company has achieved or exceeded Threshold performance for (i) the “Gross Merchandise Sales Goal,” (ii) the “Revenue Goal,” (iii) the “Adjusted EBITDA Goal” and (iv) the “Relative TSR Goal” (each as defined in Exhibit A, and collectively referred to herein as the “Performance Goals”) necessary for any portion of the Award to be earned and eligible to vest. The portion, if any, of the Award that shall vest shall range from 0% to 200% of the Target number of Common Shares underlying the Award based on achievement against the Performance Goals, as determined in accordance with the methodology set out on Exhibit A. For the avoidance of doubt, the Administrator shall have the right, to adjust or modify the Performance Goals as permitted under the Plan and as provided in this Agreement.

Except as otherwise provided herein, no additional PSUs will vest after your Service has terminated for any reason.

If your Service terminates for any reason other than in connection with a Change in Control (as defined in Etsy’s Executive Severance Plan, hereinafter, the “Severance Plan”) or for a Qualifying Termination (as defined in the Severance Plan), then your PSUs will be forfeited to the extent that they have not vested and been earned before the termination date. This means that any PSUs that have not vested and been earned under this Agreement will be canceled immediately. You receive no payment for PSUs that are forfeited. The Company determines when your Service terminates for all purposes of your PSUs.

If a Change in Control occurs prior to [last day of performance period], the Performance Period will end as of the date of such Change in Control and (i) any unearned Financial PSUs will be deemed to be earned at Target performance level set forth on Exhibit A if the Change in Control occurs from [●] through [●] (“Year 1 of the Performance Period”), and such earned Financial PSUs will continue to vest in accordance with the original service vesting schedule set forth in the Notice of Performance Stock Unit Award and (ii) any unearned Relative TSR PSUs will be deemed earned at the greater of (x) Target performance level set forth on Exhibit A or (y) actual performance level based on a truncated performance period that will end on the closing date of such Change in Control and will use the Change in Control price per Common Share, and such earned Relative TSR PSUs will continue to vest in accordance with the original service vesting schedule set forth in the Notice of Performance Stock Unit Award. Notwithstanding the foregoing, in the event you experience a Qualifying CIC Termination (as defined in the Severance Plan), your earned Financial PSUs and your earned Relative TSR PSUs will fully vest as of the date of such Qualifying CIC Termination. For the avoidance of doubt, if a Change in Control occurs on or after [●] but before the end of the Performance Period (“Years 2 to 3 of the Performance Period”), the Financial PSUs will be earned based on actual performance based on Fiscal [●] results.

If you experience a Qualifying Termination in Year 1 of the Performance Period, then (i) the Financial PSUs will be deemed to be earned at Target performance level set forth on Exhibit A and (ii) the Relative TSR PSUs will be deemed to be earned at the greater of (x) Target performance level set forth on Exhibit A or (y) actual performance level based on a truncated Performance Period that will end on the date of such Qualifying Termination. If you experience a Qualifying Termination in Years 2 to 3 of the Performance Period, then the Relative TSR PSUs will be deemed to be earned at the greater of (x) Target performance level set forth on Exhibit A or (y) actual performance level based on a truncated Performance Period that will end on the date of such Qualifying Termination. You will vest, as of the date of such Qualifying Termination, in a prorated portion of such PSUs based on the number of days that you were in Service between the Date of Grant and the date of such Qualifying Termination; provided that the Administrator will at all times retain discretion in good faith to reduce the number of PSUs that would otherwise be earned and eligible to vest as of the date of such Qualifying Termination (but in no event will the application of such negative discretion in Years 2 to 3 of the Performance Period result in the number of PSUs that would otherwise be earned be less than actual performance). If you experience a Qualifying Termination after the end of the Performance Period, but before the PSUs have vested and settled in Common Shares, then all earned but unvested PSUs shall fully vest as of the date of such Qualifying Termination. For the avoidance of doubt, if you experience a Qualifying Termination in Years 2 to 3 of the Performance Period, the Financial PSUs will be earned based on actual performance based on Fiscal [●] results.

For purposes of the Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by applicable law, the Company’s leave of absence policy or the terms of your leave. However, your Service terminates when the approved leave ends, unless you immediately return to active work.

The Company shall settle the Award on each of the Vesting Dates, or in the case of a Qualifying Termination, the date of such Qualifying Termination, and shall therefore issue (in book-entry form) in your name one Common Share (each, a “PSU Share”) for each such vested PSU comprising the Award (and, upon such settlement, those PSUs shall cease to be credited to the Account). No fractional shares will be issued upon settlement, and so any fractional share that may be payable shall be rounded to the nearest whole share. Notwithstanding anything to the contrary in this Agreement, if the delivery of Common Shares upon settlement of the Award would require you to make a filing under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, then, in lieu of delivering such Common Shares, the Company may, in its sole discretion, settle the Award, in whole or in part, in cash.

If the Company is a party to a merger, consolidation or certain change in control transactions, then your PSUs will be subject to the applicable provisions of Article 9 of the Plan, provided that any action taken must either (a) preserve the exemption of your PSUs from Code Section 409A or (b) comply with Code Section 409A.

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