Registration of Option Shares. All shares of common stock issuable upon
exercise of new options will be registered under the Securities Act on a
registration statement on Form S-8 filed with the SEC prior to issuance.
Effect of Change of Control. If we merge or are consolidated with, or
sell substantially all of our assets or stock to, another entity after the date
of the cancellation of the eligible options and prior to the grant date of the
new options, the obligation to issue the new options will survive the change of
control transaction. If we were to enter into a change of control transaction,
we anticipate negotiating the terms of such transaction so that employees who
are to receive new options would receive options to purchase securities of the
acquiror in exchange for their new options.
Description of 1999 Plan. As noted above, all of the new options will
be subject to the terms and provisions of the 1999 Plan. The following is a
summary description of the 1999 Plan and is not complete. For more details
regarding the 1999 Plan, please review the copy of the 1999 Plan previously
provided to you. If you have any questions regarding the 1999 Plan, or would
like an additional copy of the 1999 Plan, please contact Harvey Achatz, Vice
President-Administration, PFSweb, Inc., 500 North Central Expressway, Plano,
Texas 75074 (888-330-5504 x 2130) (email@example.com).
The 1999 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 1999 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 1999 Plan.
The 1999 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 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 "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 1999 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 1999 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 1999 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 issued under the 1999 Plan 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