CompUSA 2013 Annual Report Download - page 60

On June 21, 2011 the Company received notice that the Securities and Exchange Commission (“SEC”)
had initiated a formal investigation
into the matters discovered by the Audit Committee’
s internal investigation. In September 2012, the SEC charged Gilbert Fiorentino for
fraudulently obtaining undisclosed compensation directly from firms that conducted business with the Company, for stealing Company
merchandise that was used to market our products, and for failing to disclose his extra compensation and perks to the Company or its
auditors. Mr. Fiorentino agreed to settle the SEC’
s charges by paying a fine and consenting to a permanent bar from serving as an officer or
director of any publicly held company, and agreed to a permanent injunction from further violations of the antifraud and other provisions of
the federal securities laws. The Company fully cooperated with the SEC in its formal investigation and in February 2013 the SEC advised
the Company that it had concluded its investigation and would not be recommending that any action be taken against the Company.
Related action:
On June 18, 2013 Carl Fiorentino, former executive of the Company’
s North America Technology Business, was indicted by the United
States Attorney's Office for the Eastern District of New York for mail fraud, wire fraud and money laundering in connection with a scheme
to defraud TigerDirect and Systemax. A superseding indictment was filed on September 5, 2013. The case has been transferred to the United
States District Court for the Southern District of Florida; trial is scheduled to begin July 2014.
Stock based compensation plans
The Company currently has five equity compensation plans which reserve shares of common stock for issuance to key employees, directors,
consultants and advisors to the Company. The following is a description of these plans:
The 1995 Long-term Stock Incentive Plan - This plan, adopted in 1995, allowed the Company to issue qualified, non-
qualified and deferred
compensation stock options, stock appreciation rights, restricted stock and restricted unit grants, performance unit grants and other stock
based awards authorized by the Compensation Committee of the Board of Directors. Options issued under this plan expire ten years after the
options are granted. The ability to grant new awards under this plan ended on December 31, 2005 but awards granted prior to such date
continue until their expiration. A total of 10,499 options were outstanding under this plan as of December 31, 2013.
The 1995 Stock Option Plan for Non-Employee Directors - This plan, adopted in 1995, provides for automatic awards of non-
qualified
options to directors of the Company who are not employees of the Company or its affiliates. All options granted under this plan will have a
ten year term from grant date and are immediately exercisable. A maximum of 100,000 shares may be granted for awards under this plan.
The ability to grant new awards under this plan ended on October 12, 2006 but awards granted prior to such date continue until their
expiration. A total of 8,000 options were outstanding under this plan as of December 31, 2013.
The 1999 Long-term Stock Incentive Plan, as amended (“1999 Plan”) -
This plan was adopted in October , 1999 with substantially the
same terms and provisions as the 1995 Long-
term Stock Incentive Plan. The Company increased the number of shares that may be granted
under this plan to a maximum of 7,500,000 from 5,000,000 shares. The maximum number of shares granted per type of award to any
individual may not exceed 1,500,000 in any calendar year and 3,000,000 in total. The ability to grant new awards under this plan ended on
December 31, 2009 but awards granted prior to such date continue until their expiration. A total of 576,500 options were outstanding under
this plan as of December 31, 2013.
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