CompUSA 2010 Annual Report Download - page 37

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$250,000 per year (similarly increasing annually) provided that he meets certain performance criteria previously
established from time to time by the Executive Committee of the Board of Systemax. He is also eligible for an
additional bonus, in the discretion of the Board.
Mr. Fiorentino’ s 2010 bonus was determined under the 2010 Bonus Plan as a specified percentage of the
worldwide EBIT of the Company’ s technology products business, and also took into account achievement of the
retail store and technology enhancement and information technology goals, for which he is responsible in order to
most accurately reflect Mr. Fiorentino’ s direct contribution to the Company and the sustained year over year growth
of the business. Base salary accounts for 37% and non-equity incentive compensation accounted for 63% of Mr.
Fiorentino’ s total cash compensation for 2010. Mr. Fiorentino received no stock options or other stock based
incentive grants in 2010, 2009 or 2008. His salary for 2011 is set at $511,350.
Additional benefits include medical, dental and life and disability insurance benefits, participation in our
401(k) plan, and an automobile allowance. The Company has also agreed to make certain “gross up” payments if
other payments to Mr. Fiorentino are deemed by the IRS to be subject to excise tax.
Under his employment agreement, the vesting schedule of previously granted options was accelerated as
follows: Mr. Fiorentino’ s option to purchase 350,000 shares of Company stock, granted on February 28, 2003, at an
exercise price of $1.76 per Share and his option to purchase 50,000 shares of Company stock, granted on April 1,
2003, at an exercise price of $1.95 per Share both would vest at 20% per year with the first 20% vesting on October
12, 2004 (the date of execution of the employment agreement). Mr. Fiorentino also was granted new options under
the Company’ s 1999 Long Term Stock Incentive Plan for 166,667 shares, and the agreement obligated the Company
to issue additional options on 166,667 shares in each of August 2005 and 2006, at the then-fair market
value. Options vest in five annual cumulative installments of 20% each, subject to earlier termination.
Mr. Fiorentino was also granted, pursuant to a restricted stock unit agreement (the form of which is part of
his employment agreement), 1,000,000 restricted stock units under the 1999 Long Term Stock Incentive Plan
conditioned on stockholder approval and the satisfaction of certain performance conditions based on the earnings
before interest, taxes, depreciation and amortization in fiscal 2004 or fiscal 2005. Such restricted stock units vest in
accordance with the following schedule: 200,000 on May 31, 2005 and 100,000 on April 1, 2006 and each April
thereafter, until April 1, 2013, subject to earlier termination. The restricted stock units do not reflect actual issued
shares; shares are distributed within 30 days after a “Distribution Event”. A Distribution Event is defined as (x) the
earliest of the date that Mr. Fiorentino is no longer employed by the Company, the date of a change of control (as
defined) or January 1, 2006 for the units that vest in 2005 or (y) the date on which any subsequent units vest for
units that vest after 2005. If the Company pays dividends or makes other distributions during the term of the
restricted stock agreement, however, Mr. Fiorentino has the right to receive equivalent payments under certain
circumstances, but shares of Company stock shall only be distributed when there is a Distribution Event.
Mr. Fiorentino’ s total compensation for 2010 was higher than the Company’ s other NEO’ s primarily as a
result of the proportionally higher level of non-equity incentive plan/bonus compensation granted to Mr. Fiorentino
for 2010.
Compensation that may become payable following the termination of his employment or a change in
control of the Company, and other terms of the employment agreement related to such events, are discussed below
under “—Potential Payments Upon Termination or Change in Control.”
2011 NEO Cash Bonus Plan
In March 2011, pursuant to the 2010 Long Term Incentive Plan previously adopted by the Board of
Directors and by the stockholders at the 2010 Annual Meeting, our Compensation Committee, with input from our
Chief Executive Officer, established our 2011 NEO Cash Bonus Plan (“2011 Bonus Plan”) providing for target cash
bonuses for the NEO’ s based on the achievement of certain financial and non-financial performance-based criteria in
2011. The 2011 Bonus Plan implemented for 2011 the 2010 Long Term Incentive Plan and pertains specifically to
the payment of non-equity incentive compensation to NEO’ s for 2011.
For 2011, such financial and non-financial goals, the percentage of the executive’ s entire cash bonus tied to
such goals and the weighting of each component under such goal, were as follows: