Circuit City 2005 Annual Report Download - page 17

of settlement of this case. By order dated July 6, 2006 the United States District Court for the Eastern District of New
York approved the settlement and dismissed the federal complaint with prejudice. Pursuant to the settlement the
defendants are released from liability and the Company will adopt certain corporate governance principles including
the appointment of a lead independent director to, among other things, assist the Board of Directors in assuring
compliance with and implementation of the Company's corporate governance policies and pay $300,000 of the legal
fees of the plaintiffs. The plaintiffs were directed by the U.S. District Court to move to dismiss the state court actions.
The governance changes detailed in the settlement agreement include the following:
Systemax is a party to various other pending legal proceedings and disputes arising in the normal course of
business, including those involving commercial, employment, tax and intellectual property related claims, none of
which, in management’s opinion, is anticipated to have a material adverse effect on our consolidated financial
statements.
Item 4. Submission of Matters to a Vote of Security Holders.
The 2005 annual meeting of the stockholders of the Company was held on December 29, 2005. Each of the
seven candidates for the position of director (Richard Leeds, Bruce Leeds, Robert Leeds, Gilbert Fiorentino, Robert D.
Rosenthal, Stacy S. Dick and Ann R. Leven) was re-elected.
The matters voted upon at the meeting and the number of votes cast for, against or withheld (including
abstentions) as to each matter, including nominees for office, are as follows:
• The Company will create the new position of Lead Independent Director, to be elected by the independent
directors. The Lead Independent Director will serve on the Executive Committee and be responsible for
coordinating the activities of the independent directors including developing the agenda for and moderating
sessions of the independent directors, advising as to an appropriate board meeting schedule, providing input
on board and committee meeting agendas, advising as to the flow of information to the independent
directors, recommending the retention of consultants who report directly to the Board, assisting the Board
and officers in assuring compliance with and implementation of the Company’s corporate governance
policies and being principally responsible for recommending revisions to such policies.
• The Board’s independent directors shall meet separately in executive sessions, chaired by the Lead
Independent Director, at least quarterly.
• Directors standing for re-election at the next annual meeting shall be required to receive a majority of the
votes cast to retain their positions on the Board.
• The Nominating & Corporate Governance Committee and the Compensation Committee shall be
comprised exclusively of independent directors by the end of 2006.
• The Audit Committee shall conduct a re-proposal for the Company’s independent auditors at least once
every five years. The Company’s independent auditors shall not provide any consulting services except for
tax consulting services. The Audit Committee shall review the appropriateness and accounting treatment of
all related party transactions, including corporate acquisitions and sales of assets of greater than $300,000.
The Company’s Directors of Internal Audit shall report directly to the Company’s Chief Financial Officer
and the Audit Committee at least four times per fiscal year, or more often as necessary.
• Other matters include limitations on other boards on which the CEO can serve, committee authorization to
independently engage consultants, minimum numbers of meetings for certain committees, and maintenance
and circulation of Board and committee minutes.
1.
Director election:
Richard Leeds For: 30,438,954
Withhold Authority: 3,430,024
Robert Leeds For: 30,679,223
Withhold Authority: 3,189,755
Bruce Leeds For: 30,439,414