expected to be issued six months and one day from the date of the cancellation
of the eligible options tendered in the exchange which will be as soon as
possible following the date this offer expires.
WHAT IS THE EXERCISE PRICE OF THE NEW OPTIONS?
The exercise price of the new options will equal the fair market value
of our common stock on the date prior to the date we grant the new options. Our
common stock is currently traded on the Nasdaq National Market and fair market
value will be determined based upon the last reported sale price. If on the date
we grant the new options our common stock is not traded on the Nasdaq National
Market and is traded in the over-the-counter market, fair market value will be
the mean between the closing representative bid and asked prices as of such
date. Therefore, since we will not grant new options until at least six months
and one day after the date we cancel the options accepted for exchange, it is
possible that the new options may have a higher exercise price than some or all
of your current options. We recommend that you obtain current market quotations
for our common stock before deciding whether to tender your options.
WHAT IS THE VESTING PERIOD AND TERM OF THE NEW OPTIONS?
Each new option issued in exchange for eligible options issued under a
Plan will be fully vested as to 75% of the shares subject thereto, and the
remaining 25% will have a one year quarterly vesting schedule beginning on the
date of issuance of the new option. Each new option issued in exchange for
Conversion Options will not be vested on the date of issuance and will have a
new one year quarterly vesting schedule beginning on the date of the issuance of
the new options. Each new option will have a ten-year term from the date of
WHAT DOES THE COMPANY RECOMMEND THAT I DO?
The Board of Directors has approved this offer and recommends that
employees accept it. The new options may have a lower exercise price than the
eligible options exchanged therefor. The Board of Directors believes that, in
general, the offer creates a better chance for employees to obtain value from
their options in the short-term. As a service company, the Board believes that
providing equity incentives to our dedicated team of professionals is a critical
ingredient for the Company's development and success. Nevertheless, the Board of
Directors recognizes that the decision to accept is an individual one that
should be based on a variety of factors and you should consult with your
personal advisors if you have questions about your financial or tax situation.
Shares of our common stock are quoted on The Nasdaq National Market
under the symbol "PFSW". On April 27, 2001, the closing price of our common
stock on The Nasdaq National Market was $1.26 per share. We recommend that you
obtain current market quotations for our common stock before deciding whether to
elect to exchange your options.