PFSWEB, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued)
In connection with the completion of the Company’s spin-off from Daisytek on July 6, 2000 (the
“Spin-off”), all outstanding Daisytek stock options were replaced with substitute stock options.
Daisytek options held by PFSweb employees were replaced (at the option holder’s election made prior
to the Spin-off) with either options to acquire shares of PFSweb common stock or options to acquire
shares of both Daisytek common stock and PFSweb common stock (which may be exercised separately)
(the “Unstapled Options”). Options held by Daisytek employees were replaced (at the option holder’s
election made prior to the Spin-off) with either options to acquire shares of Daisytek common stock
or Unstapled Options.
As a result of the stock option replacement process described above, in conjunction with the
Spin-off, PFSweb stock options (the “Non-plan Options”) were issued to PFSweb and Daisytek
officers, directors and employees. These options were issued as one-time grants and were not issued
under the Stock Option Plans.
As of December 31, 2004, 473,269 Non-plan Options were outstanding, all of which were held by
PFSweb officers, directors and employees.
The following table summarizes stock option activity under the Non-plan Options:
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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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1,431,503 |
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$ |
0.91—$10.58 |
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$ |
1.15 |
|
Granted |
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— |
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$ |
— |
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|
$ |
— |
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Exercised |
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|
— |
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|
$ |
— |
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|
$ |
— |
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Canceled |
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(246,696 |
) |
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$ |
0.91—$10.58 |
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|
$ |
1.59 |
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|
|
|
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|
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Outstanding, December 31, 2002 |
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1,184,807 |
|
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$ |
0.91—$10.58 |
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|
$ |
1.05 |
|
Granted |
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|
— |
|
|
$ |
— |
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|
$ |
— |
|
Exercised |
|
|
(320,838 |
) |
|
$ |
0.91—$ 1.17 |
|
|
$ |
1.10 |
|
Canceled |
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|
(359,001 |
) |
|
$ |
0.91—$ 1.17 |
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|
$ |
1.16 |
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Outstanding, December 31, 2003 |
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504,968 |
|
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$ |
0.91—$10.58 |
|
|
$ |
0.95 |
|
Granted |
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|
— |
|
|
$ |
— |
|
|
$ |
— |
|
Exercised |
|
|
(31,130 |
) |
|
$ |
0.91—$ 0.91 |
|
|
$ |
0.91 |
|
Canceled |
|
|
(569 |
) |
|
$ |
5.78—$10.58 |
|
|
$ |
6.47 |
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Outstanding, December 31, 2004 |
|
|
473,269 |
|
|
$ |
0.91—$10.58 |
|
|
$ |
0.95 |
|
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As of December 31, 2004 and 2003, 473,269 and 504,968 of Non-plan Options outstanding were
exercisable, respectively.
The following table summarizes information concerning Non-plan Options outstanding and
exercisable 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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Outstanding as of |
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Average |
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Weighted |
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Exercisable as of |
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Weighted |
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| Range of |
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December 31, |
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Remaining |
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Average |
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|
December 31, |
|
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Average |
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| Exercise Prices |
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|
2004 |
|
|
Contractual Life |
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|
Exercise Price |
|
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2004 |
|
|
Exercise Price |
|
| $ |
0.91 |
|
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|
471,039 |
|
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|
6.9 |
|
|
$ |
0.91 |
|
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|
471,039 |
|
|
$ |
0.91 |
|
| $ |
5.78-$10.58 |
|
|
|
2,230 |
|
|
|
3.0 |
|
|
$ |
8.83 |
|
|
|
2,230 |
|
|
$ |
8.83 |
|
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473,269 |
|
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|
6.9 |
|
|
$ |
0.95 |
|
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|
473,269 |
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$ |
0.95 |
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Fair Value
The fair value of each option grant is estimated on the date of grant using the Black-Scholes
option-pricing model with the following assumptions used for grants of PFSweb options to PFSweb
officers, directors, and employees under the Stock Option Plans:
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Year Ended |
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Year Ended |
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Year Ended |
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December 31, 2004 |
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|
December 31, 2003 |
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|
December 31, 2002 |
|
Expected dividend yield |
|
|
— |
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|
— |
|
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|
— |
|
Expected stock price volatility |
|
|
107% - 118 |
% |
|
|
115% - 118 |
% |
|
|
112% - 114 |
% |
Risk-free interest rate |
|
|
3.9% - 4.8 |
% |
|
|
3.4% - 4.3 |
% |
|
|
5.1 |
% |
Expected life of options (years) |
|
|
5 |
|
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|
5 |
|
|
|
5 |
|
59