PFSWEB, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
Stock Options and Stock Option Plans
PFSweb Plan Options
The Company has authorized 6,000,000 shares of common stock for issuance under two 1999 stock
option plans and 35,000 shares for issuance under a stock option agreement (the “Stock Option
Plans”). The Stock Option Plans provide for the granting of incentive awards in the form of stock
options to directors, executive management, key employees, and outside consultants of the Company.
The right to purchase shares under the employee stock option agreements typically vest over a
three-year period. Stock options must be exercised within 10 years from the date of grant. Stock
options are generally issued at fair market value. The Company recorded stock based compensation
expense of $14,000, $6,000 and $28,000 in the years ended December 31, 2004, 2003 and 2002,
respectively, in connection with stock options to purchase an aggregate of 65,000 shares issued
under the Stock Option Plans to non-employees.
As of December 31, 2004, there were 1,069,030 shares available for future options under the
Stock Option Plans.
The following table summarizes stock option activity under the Stock Option Plans:
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Weighted Average |
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Shares |
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Price Per Share |
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Exercise Price |
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Outstanding, December 31, 2001 |
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3,596,369 |
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$ |
0.60 |
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— |
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$ |
16.00 |
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$ |
1.27 |
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Granted |
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1,090,000 |
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$ |
0.44 |
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— |
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$ |
0.84 |
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$ |
0.81 |
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Exercised |
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— |
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$ |
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— |
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$ |
— |
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Canceled |
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(1,080,700 |
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$ |
0.80 |
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— |
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$ |
10.45 |
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$ |
1.29 |
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Outstanding, December 31, 2002 |
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3,605,669 |
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$ |
0.44 |
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— |
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$ |
16.00 |
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$ |
1.12 |
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Granted |
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835,000 |
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$ |
0.39 |
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— |
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$ |
2.26 |
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$ |
0.42 |
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Exercised |
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(328,730 |
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$ |
0.39 |
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— |
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$ |
1.92 |
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$ |
0.81 |
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Canceled |
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(256,208 |
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$ |
0.39 |
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— |
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$ |
1.92 |
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$ |
1.10 |
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Outstanding, December 31, 2003 |
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3,855,731 |
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$ |
0.39 |
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— |
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$ |
16.00 |
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$ |
1.00 |
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Granted |
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808,000 |
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$ |
1.48 |
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— |
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$ |
2.96 |
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$ |
1.64 |
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Exercised |
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(160,133 |
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$ |
0.39 |
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— |
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$ |
1.92 |
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$ |
0.85 |
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Canceled |
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(61,491 |
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$ |
0.39 |
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— |
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$ |
10.45 |
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$ |
1.65 |
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Outstanding, December 31, 2004 |
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4,442,107 |
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$ |
0.39 |
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— |
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$ |
16.00 |
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$ |
1.11 |
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Stock Option Plan options generally vest one-twelfth each quarter. As of December 31, 2004 and
2003, 3,395,120 and 2,892,126 options were exercisable, respectively. The weighted average fair
value per share of options granted during the years ended December 31, 2004, 2003 and 2002 was
$1.40, $0.35 and $0.67, respectively.
The following table summarizes information concerning currently outstanding and exercisable
PFSweb stock options issued under the Stock Option Plans to PFSweb officers, directors and
employees as of December 31, 2004:
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| Options Outstanding |
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Weighted |
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Options Exercisable |
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Average |
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Weighted |
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Weighted |
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| Range of |
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Outstanding as of |
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Remaining |
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Average |
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Exercisable as of |
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Average |
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| Exercise Prices |
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December 31, 2004 |
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Contractual Life |
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Exercise Price |
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December 31, 2004 |
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Exercise Price |
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$0.39 |
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— |
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$ |
0.91 |
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2,991,658 |
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7.3 |
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$ |
0.77 |
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2,586,245 |
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$ |
0.82 |
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$1.16 |
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— |
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$ |
1.92 |
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1,394,699 |
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7.6 |
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$ |
1.73 |
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759,792 |
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$ |
1.82 |
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$2.26 |
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— |
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$ |
2.96 |
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48,000 |
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6.3 |
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$ |
2.68 |
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41,333 |
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$ |
2.68 |
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$10.45 |
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— |
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$ |
16.00 |
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7,750 |
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4.6 |
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$ |
11.17 |
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7,750 |
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$ |
11.17 |
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4,442,107 |
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7.4 |
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$ |
1.11 |
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3,395,120 |
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$ |
1.09 |
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PFSweb Non-plan Options
Prior to the Company’s initial public offering, certain of the Company’s employees were
holders of stock options of the Company’s former parent company, Daisytek International Corporation
(“Daisytek”), issued under Daisytek’s stock option
plans.
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