(2) Calculated by determining the difference between the last sale price of the
Daisytek common stock on the date of exercise as reported by the Nasdaq
National Market and the exercise price.
PFSWEB STOCK OPTION AND INCENTIVE PLANS
We have adopted, with the approval of Daisytek in its capacity as the sole
stockholder of PFSweb, the PFSweb Employee Stock Option Plan and the PFSweb
Annual Incentive Plan. These plans will be administered by the Compensation
Employee Stock Option Plan
The Employee Stock Option Plan provides for the grant of stock options to
all officers and full-time employees of PFSweb who are eligible to participate.
The purpose of the Plan is to further our growth, development and financial
success by providing incentives to our officers and employees by assisting them
to become owners of our common stock. An aggregate of 5,750,000 shares of common
stock are reserved for issuance to employees under the Plan, which includes
substitute stock options which will be issued in replacement of outstanding
Daisytek stock options. See "Substitute Stock Options."
The Plan is administered by a committee of the Board of Directors (the
"Stock Option Committee"). The Stock Option Committee consists of two or more
Directors, appointed by and holding office at the pleasure of the Board of
Directors. The Board may, and currently intends, to limit the members of the
Stock Option Committee to Directors who are both "non-employee directors", as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, and "outside
directors", as defined in Section 162(m) of the Internal Revenue Code. The Stock
Option Committee has complete authority and discretion to determine from among
eligible persons those to whom options will be granted and the number and terms
of such options. The Board has authorized the Compensation Committee to serve as
the Stock Option Committee.
The Plan provides for the granting of both incentive stock options and
non-qualified stock options under the Code. The exercise price of options
granted under the Plan may not be less than 100% of the fair market value on the
date of the grant, except that incentive stock options granted to individuals
owning more than ten percent of the total combined voting power of PFSweb may
not have an exercise price less than 110% of the fair market value on the date
of grant. The Plan gives the Stock Option Committee complete discretion as to
the times at which the options are exercisable, provided that such options must
expire no later than ten years from the date of grant.
Options are exercisable at such times and in such installments (which may
be cumulative) as the Stock Option Committee may provide in the terms of each
individual option. Generally, options granted under the Plan are expected to be
subject to multi-year cumulative vesting schedules as shall be determined by the
Stock Option Committee, in its discretion.
The Plan permits the Stock Option Committee to authorize and approve the
issuance of immediately exercisable options to purchase restricted stock subject
to restrictions on transfer and forfeiture, and, subject to such terms and
conditions as the Stock Option Committee shall determine in its sole discretion,
the acceptance of promissory notes and/or shares of our common stock (whether
issued upon exercise of outstanding options or otherwise) in payment of the
option exercise price (or applicable taxes arising in connection therewith).
Generally, options issued under the Plan are non-transferable other than by will
or the laws of descent and distribution, except that the Stock Option Committee
may approve the transferability of non-qualified options to family members and
family trusts of option holders or other transferees.
At the time of any merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, or other change in the corporate structure or
capitalization affecting our common stock, the Stock Option Committee will make
appropriate adjustments to the exercise price, number and kind