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PFSWEB, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(see Notes 5 and 6). The Company's income tax receivable and intercompany
accrued interest are included in the payable to Daisytek as of March 31, 2000.
3. CAPITAL LEASE OBLIGATIONS:
During fiscal 2000, the Company entered into certain non-cancelable capital
lease agreements primarily involving warehouse equipment. The Company's property
held under capital leases, included in furniture and fixtures, amounted to
approximately $2.7 million and $2.3 million, net of accumulated amortization of
approximately $23,000 and $396,000 at March 31, 2000 and 2001, respectively.
The following is a schedule of future minimum lease payments under the
capital leases together with the present value of the net minimum lease payments
as of March 31, 2001 (in thousands):
Fiscal year ended March 31, 2002........................... $ 506
2003....................................................... 506
2004....................................................... 493
2005....................................................... 425
2006....................................................... 425
Thereafter................................................. 920
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Total minimum lease payments............................... $3,275
Less: Amount representing interest......................... (836)
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Present value of net minimum lease payments................ 2,439
Less: Current portion...................................... (300)
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Long-term capital lease obligations........................ $2,139
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4. STOCK AND STOCK OPTIONS:
Preferred Stock Purchase Rights
On June 8, 2000 the Company's Board of Directors declared a dividend
distribution of one preferred stock purchase right (a "Right") for each share of
the Company's common stock outstanding on July 6, 2000. Each Right entitles the
registered shareholders to purchase from the Company one one-thousandth of a
share of preferred stock at an exercise price of $67, subject to adjustment. The
Rights are not currently exercisable, but would become exercisable if certain
events occurred relating to a person or group acquiring or attempting to acquire
15 percent or more of the Company's outstanding shares of common stock. The
Rights expire on July 6, 2010, unless redeemed or exchanged by the Company
earlier.
Employee Stock Purchase Plan
On September 15, 2000, PFSweb shareholders adopted the PFSweb Employee
Stock Purchase Plan (the "Stock Purchase Plan") which is qualified under Section
423 of the Internal Revenue Code of 1986, to provide employees of PFSweb an
opportunity to acquire a proprietary interest in the Company. The Stock Purchase
Plan provides for acquisition of PFSweb common stock at a 15% discount to the
market value. The Stock Purchase Plan permits each U.S. employee who has
completed ninety days of service to elect to participate in the plan. Eligible
employees may elect to contribute up to 10 percent of their compensation with
after-tax dollars up to a maximum annual contribution of $21,250. The Company
has reserved 250,000 shares of its common stock under the Stock Purchase Plan.
The Stock Purchase Plan became effective for eligible employees in September
2000. As of March 31, 2001, 37,378 shares had been issued under the Stock
Purchase Plan.
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