14
(10) Includes outstanding options to purchase 38,227 shares of Common Stock,
which are fully vested and exercisable.
(11) Includes outstanding options to purchase 31,813 shares of Common Stock,
which are fully vested and exercisable.
(12) Includes outstanding options to purchase 41,092 shares of Common Stock,
which are fully vested and exercisable.
(13) Includes outstanding options to purchase 63,689 shares of Common Stock,
which are fully vested and exercisable.
(14) Includes outstanding options to purchase 13,809 shares of Common Stock,
which are fully vested and exercisable.
(15) Includes outstanding options to purchase 53,969 shares of Common Stock,
which are fully vested and exercisable.
(16) Includes outstanding options to purchase 1,362,753 shares of Common Stock,
which are fully vested and exercisable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's Ongoing Relationship With Daisytek
Daisytek completed the spin-off of the Company in July 2000. Messrs.
Layton, Powell, Yates, Murray, Vikanis and Reilly, directors of the Company,
also presently serve as directors of Daisytek, and Messrs. Layton and Powell
also serve as executive officers of Daisytek.
The Company and Daisytek presently have, and expect to continue to have,
significant ongoing relationships. The Company and Daisytek are parties to
various agreements providing for the separation of their respective business
operations. These agreements govern various interim and ongoing relationships
between the companies, including the transaction management services that the
Company provides for Daisytek and the transitional services that Daisytek
provides to the Company.
All of the agreements between the Company and Daisytek were made in the
context of a parent-subsidiary relationship and were negotiated in the overall
context of the spin-off. Although the Company generally believes that the terms
of these agreements are consistent with fair market values, there can be no
assurance that the prices charged to or by each company under these agreements
are not higher or lower than the prices that may be charged by, or to,
unaffiliated third parties for similar services.
We have set forth below a summary description of certain of these
agreements. This description is not complete. You should read the full text of
these agreements, which have been filed with the SEC as exhibits to the
Company's current and quarterly reports.
Master Separation Agreement
The Master Separation Agreement sets forth the agreements between the
Company and Daisytek with respect to the principal corporate transactions
required to effect the transfers of assets and assumptions of liabilities
necessary to separate the PFSweb business unit from Daisytek and certain other
agreements governing this relationship thereafter.
Transfer of Assets and Liabilities. Following completion of the Company's
initial public offering, Daisytek transferred to the Company all of the fixed
assets in Daisytek's Memphis distribution facilities as well as certain assets
associated with providing information technology services and the stock of
several subsidiaries of Daisytek representing the business operations of the
Company, and the Company transferred to Daisytek approximately $5.0 million in
cash and assumed approximately $0.3 million of capital lease obligations, as
well as the operating lease obligations related to these assets. The Company
also repaid to Daisytek, from the net proceeds of the initial public offering,
the aggregate sum of approximately $27 million, representing the outstanding
balance of the Company's intercompany payable to Daisytek.
11