--------------------------------------------------------------------------------
RIGHTS AGREEMENT
Rights Agreement, dated as of June 8, 2000 (the "Agreement"), between
PFSWeb, Inc., a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a New Jersey limited liability company (the
"Rights Agent", which term shall include any successor Rights Agent hereunder).
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding at the Close of Business (as
hereinafter defined) on July 6, 2000 (the "Record Date"), each Right
representing the right to purchase one one-thousandth (1/1000) of a share of
Series A Preferred Stock, par value $1.00 per share, of the Company ("Series A
Preferred Stock") having the rights and preferences set forth in the Certificate
of Designations of Preferred Stock with respect to the Series A Preferred Stock,
a copy of which is attached hereto as Exhibit A. The Board of Directors of the
Company has further authorized the issuance of one Right with respect to each
Common Share (as hereinafter defined) that shall become
outstanding (whether
originally issued or delivered from the Company's treasury) after the Record
Date and on or prior to the earliest of the Separation Date, the Redemption Date
and the Final Expiration Date (each as hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who, together with all
Affiliates and Associates of such Person, shall hereafter become the Beneficial
Owner of 15% or more of the Common Shares then outstanding, but shall not
include (i) the Company, (ii) any wholly owned Subsidiary of the Company and
(iii) any employee benefit plan of the Company or any Subsidiary of the Company,
or any entity holding Common Shares for or pursuant to the terms of any such
plan or for purposes of funding or providing Common Shares to any such plan;
provided, however, that any Person, who, together with all Affiliates and
Associates of such Person, on the date of this Agreement is the Beneficial Owner
of 15% or more of the outstanding Common Shares shall not be, or be deemed to
be, an "Acquiring Person" unless and until such Person becomes the Beneficial
Owner of an additional one percent (1%) or more of the outstanding Common
Shares. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as a result of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the Common