Circuit City 2009 Annual Report Download

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SYSTEMAX INC
FORM 10-K
(Annual Report)
Filed 03/18/10 for the Period Ending 12/31/09
Address 11 HARBOR PARK DR
PORT WASHINGTON, NY 11050
Telephone 5166087000
CIK 0000945114
Symbol SYX
SIC Code 5961 - Catalog and Mail-Order Houses
Industry Retail (Catalog & Mail Order)
Sector Services
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2010, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    SYSTEMAX INC FORM 10-K (Annual Report) Filed 03/18/10 for the Period Ending 12/31/09 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 11 HARBOR PARK DR PORT WASHINGTON, NY 11050 5166087000 0000945114 SYX 5961 - Catalog and Mail-Order Houses Retail (Catalog & Mail Order) Services ...

  • Page 2
    ..., New York 11050 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (516) 608-7000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, par value...

  • Page 3
    ... of June 30, 2009, which is the last business day of the registrant's most recently completed second fiscal quarter, was approximately $117,681,986. For purposes of this computation, all executive officers and directors of the Registrant and all parties to the Stockholders Agreement dated as of June...

  • Page 4
    ... OF C ONTENTS Part I Item 1. Business General Products Sales and Marketing Customer Service, Order Fulfillment and Support Suppliers Competition and Other Market Factors Employees Environmental Matters Financial Information About Foreign and Domestic Operations Available Information Risk Factors...

  • Page 5
    ...in the computer products retail industry, especially relating to the distribution and sale of such products timely availability of existing and new products risks associated with delivery of merchandise to customers by utilizing common delivery services the effect on us of volatility in the price of...

  • Page 6
    ... Financial Statements included in Item 15 of this Form 10-K. ). Our Software Solutions segment participated in the emerging market for on-demand, web-based business software applications through the marketing of our PCS ProfitCenter Software â„¢ application. As of December 31, 2009, substantially...

  • Page 7
    ... our sales to individual consumers by using retail outlet stores. Over the past several years, the Company has expanded its brick and mortar retail operations through the CompUSA acquisition and by opening new stores. We have established a multi-faceted direct marketing system to business customers...

  • Page 8
    ... computer and industrial products than our printed catalogs. Our customers have around-the-clock, on-line access to purchase products and we have the ability to create targeted promotions for our customers' interests. Many of our internet sites also permit customers to purchase "build to order" PCs...

  • Page 9
    ...computer and office supply superstores. Timely introduction of new products or product features are critical elements to remaining competitive. Other competitive factors include product performance, quality and reliability, technical support and customer service, marketing and distribution and price...

  • Page 10
    ... based on price, product selection, product availability, level of service and convenience. We believe that direct marketing via sales representatives, catalog and the internet are effective and convenient distribution methods to reach mid-sized facilities that place many small orders and require...

  • Page 11
    ...in the future. Financial Information About Foreign and Domestic Operations We conduct our business in North America (the United States, Puerto Rico and Canada) and Europe. Approximately 33.5%, 37.9% and 39.7% of our net sales during 2009, 2008 and 2007, respectively were made by subsidiaries located...

  • Page 12
    ... of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company website (www.systemax.com). Item 1A. Risk Factors. There are a number of factors and variables described below that may affect our future results of operations and financial condition. Other...

  • Page 13
    ... and could be adversely affected by a continuation of our customers' shift to lower-priced products. • State sales tax laws may be changed which could result in ecommerce and direct mail retailers having to collect sales taxes in states where the current laws do not require us to do so. This could...

  • Page 14
    ... occur in the future. Changes to existing rules may adversely affect our reported financial results. Risks Related to Our Company • We rely to a great extent on our information and telecommunications systems, and significant system failures or outages, or our failure to properly evaluate, upgrade...

  • Page 15
    ... is no assurance that parts and supplies will be available in a timely manner and at reasonable prices. Any loss of, or interruption of, supply from key suppliers may require us to find new suppliers. This could result in production or development delays while new suppliers are located, which could...

  • Page 16
    ... 2008. The Company needs to effectively manage its cost structure in order to maintain profitability including the additional inventory needs, retail point of sales IT systems, retail personnel and leased facilities. Future growth in retail will also be dependent on the ability to attract customers...

  • Page 17
    ... card information records. In processing our sales orders we often collect personal information and credit card information from our customers. The Company has privacy and data security policies in place which are designed to prevent security breaches, however, if a third party or a rogue employee...

  • Page 18
    ..., the Company has not yet achieved full compliance with the Payment Card Industry ("PCI") security standards. Without full compliance any breach involving the loss of credit card information may lead to PCI related fines of up to $500,000. In the event of a severe breach credit card providers may...

  • Page 19
    ...location, administrative offices, telephone call centers, distribution centers, computer assembly and retail stores. Certain facilities handle multiple functions. Most of our facilities are leased; certain are owned by the Company. North America As of December 31, 2009 we have 6 distribution centers...

  • Page 20
    ... 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...

  • Page 21
    ...January 2, 2010, the last reported sale price of our common stock on the New York Stock Exchange was $15.71 per share. As of January 2, 2010, we had 215 shareholders of record. On November 16, 2009, the Company's Board of Directors declared a special dividend of $.75 per share payable on December 15...

  • Page 22
    ...consolidated financial statements of the Company which are not included in this report. Years Ended December 31, (In millions, except per share data) 2008 2007 2006 2009 2005 Statement of Operations Data : Net sales Gross profit Operating income Net income Per Share Amounts : Net income - diluted...

  • Page 23
    ... Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Overview Systemax is primarily a direct marketer of brand name and private label products. Our operations are organized in three reportable business segments - Technology Products, Industrial Products...

  • Page 24
    ... of an order arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time of receipt by customers when title and risk of loss both are transferred. Sales are shown net of returns and...

  • Page 25
    ... Adopted and Newly Issued Accounting Pronouncements Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board ("FASB") and the Securities and Exchange Commission ("SEC"). These authorities...

  • Page 26
    ... in conjunction with the consolidated financial statements included herein Sales increase of 4.4% to $3.2 billion in 2009 over 2008. Completed CircuitCity.com asset purchase and WStore Europe SA and Subsidiaries ("WStore") stock purchase. Opened five new retail stores. Exited unprofitable Software...

  • Page 27
    ... $120.9 million. Adjusting for the impact of the number of weeks, Technology products sales increased 8.3% for the year. North American technology products sales increased 14.3% in 2009 compared to 2008 benefiting from the opening of 5 retail stores and the Circuit City acquisition which contributed...

  • Page 28

  • Page 29
    ... to $2.3 billion compared to 2008. North American sales benefited from increased retail and internet sales in the consumer channel, opening 5 retail stores and the Circuit City acquisition, which contributed $67.3 million of sales offset by the declining sales in the Industrial products segment. On...

  • Page 30
    ...of 2009. Corporate and other expenses operating costs increased 16.5% in 2009 as compared to 2008 due to increased expenses for new software implementation, acquisition related costs and additional staffing and overhead costs to support the growth in the Company's business. INTEREST AND OTHER INCOME...

  • Page 31
    ... state deferred tax assets in the United States and certain benefits on losses in foreign tax jurisdictions due to our inability to carry such credits and losses back to prior years and our determination that it was more likely than not that we would not generate sufficient future taxable income...

  • Page 32
    ...the stocking our retail stores. Accounts receivable balances increased as the result of growth in open account business to business sales, the WStore acquisition and slight growth in accounts receivable days outstanding. Accounts payable and accrued expense balances increased due to inventory growth...

  • Page 33
    ...cash needs to support our growth and expansion plans, continued investment in upgrading and expanding our technological capabilities and information technology infrastructure, opening of new retail stores, and in building out and expanding our distribution center facilities and inventory systems. 30

  • Page 34
    ... our earnings per share. In addition we anticipate cash needs for implementation of financial and retail point of sale systems. We believe that our cash balances, future cash flows from operations and our availability under credit facilities will be sufficient to fund our working capital and other...

  • Page 35
    ... of the financial statements of our operations located outside of the United States is impacted by movements in foreign currency exchange rates. Changes in currency exchange rates as measured against the U.S. dollar may positively or negatively affect income statement, balance sheet and cash...

  • Page 36
    ... have been no changes in the Company's internal controls over financial reporting during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Item 9B. Other Information. None. 33

  • Page 37
    ... Item 15. Exhibits and Financial Statement Schedules. (a) 1. Consolidated Financial Statements of Systemax Inc. Reports of Ernst & Young LLP Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2009 and 2008 Consolidated Statements of Operations for the years...

  • Page 38
    ... Directors* (incorporated by reference to the Company's annual report on Form 10-K for the year ended December 31, 2006) Form of 2005 Employee Stock Purchase Plan* (incorporated by reference to the Company's annual report on Form 10-K for the year ended December 31, 2006) Lease Agreement dated...

  • Page 39
    ... the Naperville Illinois Facility Lease between the Company and Ambassador Drive LLC (current landlord) (incorporated by reference to the Company's annual report on Form 10-K for the year ended December 31, 2005) Lease Agreement dated September 17, 1998 between Tiger Direct, Inc. and Keystone Miami...

  • Page 40
    ... Circuit City Stores, Inc, as Sellers (incorporated by reference to the Company's report on Form 8-K dated May 20, 2009). Corporate Ethics Policy for Officers, Directors and Employees (revised as of March, 2010) Subsidiaries of the Registrant (filed herewith) Consent of Independent Registered Public...

  • Page 41
    ... behalf by the undersigned, thereunto duly authorized. SYSTEMAX INC. By: /s/ RICHARD LEEDS Richard Leeds Chairman and Chief Executive Officer Date: March 18, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf...

  • Page 42
    ...codified in FASB Accounting Standards Codification Topic 805, "Business Combinations") on January 1, 2009. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Systemax Inc.'s internal control over financial reporting as of December...

  • Page 43
    ... over financial reporting as of December 31, 2009 based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Systemax Inc. as of December 31, 2009 and 2008 and the related...

  • Page 44
    ... BALANCE SHEETS (in thousands, except for share data) December 31, 2009 2008 ASSETS: Current assets: Cash Accounts receivable, net of allowances of $22,532 and $17,523 Inventories Prepaid expenses and other current assets Deferred income taxes Total current assets Property, plant and equipment...

  • Page 45
    ... per share data) 2009 Year Ended December 31, 2008 2007 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Foreign currency exchange loss (gain) Interest and other income, net Interest expense Income before income taxes Provision for income taxes Net...

  • Page 46
    ... related to equity compensation plans Excess tax benefit from exercises of stock options Loss (gain) on dispositions and abandonment Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Income taxes payable/receivable Accounts payable...

  • Page 47
    ...) Common Stock Number of Shares Outstanding Balances, January 1, 2007 Stock-based compensation expense Issuance of restricted stock Exercise of stock options Income tax benefit on stock-based compensation Cumulative effect of adoption of FIN 48 Change in cumulative translation adjustment Dividends...

  • Page 48
    ...a business targeted for disposal. The Company's identifiable intangible assets consist of trademarks, trade and domain names, retail leases and customer lists (See Note 2). Accruals - Management makes estimates and assumptions that affect amounts reported in the consolidated financial statements and...

  • Page 49
    ... the Company's effective tax rate in a given financial statement period may be affected. Revenue Recognition and Accounts Receivable - The Company recognizes sales of products, including shipping revenue, when persuasive evidence of an order arrangement exists, delivery has occurred, the sales price...

  • Page 50
    ... of investments in cash, trade accounts receivable, accounts payable and debt obligations. The Company estimates the fair value of financial instruments based on interest rates available to the Company and by comparison to quoted market prices. At December 31, 2009 and 2008, the carrying amounts of...

  • Page 51
    ... locations. This acquisition accelerated the Company's planned expansion into the retail market place in North America and Puerto Rico. The Company has recorded assets of approximately $17.0 million for Trademarks and Trade Names, $8.0 million for Domain Names, $3.4 million for Retail Store Leases...

  • Page 52
    ...group of financial institutions which provides for borrowings in the United States and United Kingdom. The borrowings are secured by all of the domestic and United Kingdom accounts receivable, all domestic inventories, the United Kingdom headquarters building and the Company's shares of stock in its...

  • Page 53
    ... In 2009 the Company extended until December 31, 2010 the expiration date under this plan after which no grants shall be made under this plan. The original expiration date was December 31, 2009. Restricted stock grants and common stock awards reduce stock options otherwise available for future grant...

  • Page 54
    ... attribution method. The fair value of employee share options is determined on the date of grant using the Black-Scholes option pricing model. The Company has used historical volatility in its estimate of expected volatility. The expected life represents the period of time (in years) for which the...

  • Page 55
    ...of $12.25 per share. Theses shares are included in common stock in treasury at cost in the Company's consolidated balance sheet. 9. INCOME TAXES The components of income before income taxes are as follows (in thousands): 2009 Year Ended December 31, 2008 2007 United States Foreign Total 52 $ $ 54...

  • Page 56
    ...income tax expense and the computed income tax expense based on the Federal statutory corporate rate is as follows (in thousands): 2009 Year Ended December 31, 2008 2007 Income tax at Federal statutory rate State and local income taxes and changes in valuation allowances, net of federal tax benefit...

  • Page 57
    53

  • Page 58
    ... to pay amounts in excess of accruals, our effective tax rate in a given financial statement period could be affected. Accrued interest and penalties related to unrecognized tax benefits are recorded in income tax expense in the current year. The following table details activity of the Company...

  • Page 59
    ... $0.4 million related to a state tax audit that was settled favorably. 10. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS Leases - The Company is obligated under operating lease agreements for the rental of certain office and warehouse facilities and equipment which expire at various dates through...

  • Page 60
    ...The accounting policies of the segments are the same as those of the Company described in Note 1. Financial information relating to the Company's operations by reportable segment was as follows (in thousands): 2009 Year Ended December 31, 2008 2007 Net Sales: Technology Products Industrial Products...

  • Page 61
    Table of Contents Financial information relating to the Company's operations by geographic area was as follows (in thousands): 2009 Year Ended December 31, 2008 2007 Net Sales: United States: Technology Products Industrial Products Software Solutions United States total Other North America (...

  • Page 62
    ...For the years ended December: (in thousands) Balance at Beginning of Period Charged to Expenses Balance at End of Period Description Write-offs Other Allowance for sales returns and doubtful accounts 2009 2008 2007 Allowance for deferred tax assets 2009 Current (3) Noncurrent (1)(3) 2008 Current...

  • Page 63
    ..., doing business as "Tiger Direct" ("Tenant") for Space Number 35 and 33C in the Mall of the Americas, and Systemax, Inc. formerly known as Global Direct Mail, Inc., a New York Corporation ("Guarantor"). WITNESSETH: WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated as of...

  • Page 64
    ... the Additional Premises to the Tenant ( the "Exchange Date") . Prior to the Commencement Date, the Tenant shall continue to pay Rent as provided under the Lease, however, once the Tenant occupies and opens for business in the Additional Premises and returns the Release Space to Landlord as provided...

  • Page 65
    ... is to substitute premises in the Shopping Center as such currently exists, the Landlord shall revise the Lease to reflect the new premises and any proportionate changes in the Annual Rent and Direct Costs and Taxes if any, effective as of the date of relocation, resulting from a difference in the...

  • Page 66
    ... shall pay to Tenant all reasonable out-of-pocket expenses of moving Tenant to the substitute premises, including but not limited to moving trade fixtures and equipment, wiring of computers (including network connections to the main office), moving telephone equipment, printing of new stationery...

  • Page 67
    ... as Tenant customer parking and remain located in the area immediately in front of Tenant's main entrance as reasonably agreed by both Landlord and Tenant. If Tenant does not provide specific reasonable written objections to the configuration of the Excess GLA within ten (10) days from receipt...

  • Page 68
    ... Manager 9/5, 2003 TENANT: /s/ [ILLEGIBLE] /s/ Andrea Fongyee TIGER DIRECT, INC., a Delaware corporation By: Name: Title: Date: /s/ Gilbert Fiorentino Gilbert Fiorentino CEO 8/22, 2003 GUARANTOR: /s/ [ILLEGIBLE] SYSTEMAX, INC. formerly known as Global Direct Mail, Inc., a New York Corporation...

  • Page 69
    Amendment Exhibit "A" Attached to and made part of First Amendment to Lease Reference Date of September 5 th , 2003 between KeystoneMiami Property Holding Corp., as Landlord and Tiger District, Inc., as Tenant and Systemax, Inc. as Guarantor

  • Page 70

  • Page 71

  • Page 72
    Amendment Exhibit "B" Permitted Relocation Area The crosshatched area is the Permitted Relocation Area Attached to and made part of First Amendment to Lease Reference Date of September 5 th , 2003 between KeystoneMiami Property Holding Corp., as Landlord and Tiger District, Inc., as Tenant and ...

  • Page 73

  • Page 74

  • Page 75
    ... from any part of the parking area or other Common Facilities located within the Restricted Area. The foregoing limitation on sales from premises within 150 feet of Tenant's Building shall not be applicable to the premises currently occupied by the tenants doing business under the names of Woolworth...

  • Page 76
    ... more than 50% of the gross sales of such tenant's or occupant's business in such space at the Shopping Center) is the sale of prescription eyeglasses, contact lenses and/or sunglasses ("Prohibited Items"). In no event shall any occupant or tenant perform eye examinations. Nothing contained herein...

  • Page 77
    ...gross leasable area for computer and computer-related sales and rentals, but no event shall any such tenant sell or rent "custom built" computers; and (iii) Landlord shall be permitted to lease space in the Shopping Center to an electronics retailer such as Best Buy, Circuit City or BrandsMart or to...

  • Page 78
    ... the expiration, if applicable), that hereafter it shall not enter into a Lease for space in the building of which the demised premises forms a part, with any other tenant whose primary business is to provide the same products and : services as outlined under primary business of the Tenant contained...

  • Page 79
    ...it will not lease, sell or otherwise permit any portion of the Shopping Center to be used for office purposes (other than incidental to a primary retail use) except within those areas which are currently used for office purposes and those areas which are identified on the Site Plan as "Southern Bell...

  • Page 80
    ... Nothing contained in this Rider Paragraph shall restrict Landlord's ability freely to lease space in the outparcels or any other portion of the Shopping Center, not a part of the building of which the demised premises forms a part. Any present food tenant, its successors or assigns, may continue to...

  • Page 81
    ...a "Permanent Building" per Item 10 of the First Amendment to Lease. This Exhibit is a representative diagram and is intended solely for the purpose of identifying the general location of the Premises and the current configuration. Landlord reserves the right at all times herein to (i) change, modify...

  • Page 82
    "Parking Area" comprised of Protected Area and other parking space areas reflected hereon, subject expressly to Landlord's rights under the Lease, including without limitation, those mentioned in Rider R-10. RREEF

  • Page 83
    ...except for ten thousand (10,000) square feet of floor area for non-retail offices situated more than one hundred fifty (150) feet from the Demised Premises and except for the second floor area presently leased to Southern Bell for offices in the Shopping center as shown upon the Lease Plan. RREEF 7

  • Page 84
    ... by certain Settlement Agreement and Mutual Release dated June 8, 2001 and First Amendment to Lease dated September 5, 2003, (the "Lease") between SC MOTA Associates Limited Partnership, as successor in interest to Keystone-Miami Property Holding Corp. ("Landlord") and Tiger Direct Inc. ("Tenant...

  • Page 85
    ... expressly provided in the Lease, Tenant agrees to accept the Premises in its "as-is" condition as of the Commencement Date except that the air conditioning equipment, will be in good working order upon delivery of the Premises. Tenant shall be responsible for performing all renovations, alterations...

  • Page 86
    ...as if the Additional Premises were originally included within the Premises on the date upon which the Lease was originally executed; and (ii) all references to the "Premises" appearing in the Lease and/or in this letter agreement shall be deemed to mean and referred to the entire Premises (including...

  • Page 87
    ... your agreement with these terms by signing and returning the additional enclosed copy of this letter in the place designated below. AGREED TO this 26 day of March 2007. Tiger Direct Inc. (Tenant) /s/ Andrea Fongyee Witness Witness APPROVED this 12th day of April 2007. SC MOTA Associated Limited...

  • Page 88

  • Page 89
    ... 2(d) and shall commence the payment of Monthly Installments of Annual Rent, Tenant's Percentage Share of Operating Expenses and Tenant's Percentage Share of Real Estate Taxes for the Additional Retail Premises on the first day following the occurrence of such Event of Default. Furthermore, if...

  • Page 90

  • Page 91
    ... not less than fifteen (15) business days' prior written notice to Landlord, at Landlord's corporate office currently located in Palm Beach, Florida. Tenant shall not be allowed to use any third party audit recovery company acting wholly or partly on a contingency fee basis to perform such audit or...

  • Page 92
    ...shall be obligated to pay arising out of the use, occupancy, ownership, leasing, management, repair or replacement of the Center, or any property, fixtures or equipment thereon, as well as all taxes attributable to the Additional Retail Premises or rent imposed on the Center from time to time by any...

  • Page 93
    ... failure will be an Event of Default under the Lease. For purposes of the Additional Retail Premises, the term "Permitted Trade Name" shall mean CompUSA, Tiger Direct.com Discount Computers or other trade name used or may be used by Tenant at a majority of its retail locations in the United States...

  • Page 94
    ... and payable by Tenant pursuant to the Lease (including, without limitation, Tenant's Percentage Share of the cost associated with the Property Insurance as to the Storage Premises only). Upon the Original Extension Term Commencement Date, the Base Year for Direct Expenses and Taxes shall be changed...

  • Page 95

  • Page 96
    ... below, the Base Year for Direct Expenses and Taxes shall be changed to the calendar year 2020 with respect to the Original Remaining Premises only. (b) Second Renewal Term . Provided Tenant had exercised its option for the First Renewal Term and is not in default under the Lease at the time of the...

  • Page 97

  • Page 98
    ... Retail Commencement Date, all references to the "Premises" in the Lease shall mean and refer to the Original Remaining Premises and the Additional Retail Premises. 7. Confidentiality . Tenant agrees not to disclose any of the terms or provisions of this Amendment to other present or future...

  • Page 99
    ... have executed and delivered this Amendment as of the day and year first written above. WITNESSES: LANDLORD: SC MOTA ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership By: SC MOTA GP, Inc., a Delaware corporation /s/ Karen Lynch Print Name: Karen Lynch /s/ JoAnn Carlisi Print Name: JoAnn...

  • Page 100
    ... Guaranty as guarantor with respect to the Lease, as modified by this Amendment. Nothing ...Lease, as modified by this Amendment. WITNESSES: GUARANTOR: SYSTEMAX, INC., formerly known as Global Direct Mail, Inc., a Delaware corporation /s/ Ed Schmidt Print Name: Ed Schmidt /s/ Andrea Fongyee Print Name...

  • Page 101
    EXHIBIT "A" LEGAL DESCRIPTION OF THE CENTER Tract "A" of MALL OF THE AMERICAS, according to the Plat thereof as recorded in Plat Book 159, Page 70, of the Public Records of MiamiDade County, Florida. 10

  • Page 102
    EXHIBIT "B" SITE PLAN

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    11

  • Page 104
    ... supplied and installed on the roof of the Leased Premises. All duct work and other work required to hook up the system to be completed by the Landlord based on an open retail unit (i.e. no partition walls, bulkheads, etc.). The Tenant is required to make its own inquiries regarding the adequacy of...

  • Page 105

  • Page 106
    ...structural system must be approved by Landlord in writing before work is...directed by the Landlord for proper circulation of air. Storefront bulkhead must remain open to permit return airflow. Vertical neutral strips separating Tenant storefront construction are erected in front of storefront at lease...

  • Page 107
    ...dimensions and locations of ...openings. Tenant shall provide liquid tight sleeves at all floor penetrations at Tenant's expense. If Tenant elects to install carpeting it must not extend past center line of door track to lease...rating. Ceiling not terminating tight against wall surface must be returned...

  • Page 108
    14

  • Page 109
    ...furnish 56 F +/- 2 supply air. Supply air from the units through Landlord's common duct system is delivered at the premises by providing a duct connection point for Tenant's distribution system. Air is returned to Landlord's air conditioning unit via ceiling plenum. Ventilation: Outside fresh air is...

  • Page 110

  • Page 111
    ... and main circuit breakers, panels, transformer, conduit, wire, etc., to provide a complete approved electric distribution system within the leased premises. Landlord has sized electrical service sufficient to accommodate an electrical installation of 10 watts per square foot for retail Tenants, 30...

  • Page 112

  • Page 113
    ..., appliances, signs, water heaters, equipment, etc., and a KW demand for each installed item. A complete electrical panel schedule is required for each i nstallation. Tenant plan shall provide a single line diagram showing electrical distribution with method of grounding of Tenant's system clearly...

  • Page 114
    ... with single device cover and telephone plate. I. Gas Service Gas service will be available from the local gas company at a designated area. All piping and associated work for extension of services from the designated area to the Tenant's leased space is by Tenant contractor at Tenant's expense...

  • Page 115

  • Page 116
    ... replaced as directed by Landlord. Tenant's contractor will be held responsible for all clean-up in the common mall or joint use area. Tenant's contractor must provide a walk-off mat. All construction plans in the field must bear the Landlord's approval. All work performed in the leased premises is...

  • Page 117
    EXHIBIT "C-1" PLANS FOR LANDLORD'S WORK 20

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  • Page 120
    ...that during the entire term of this Lease (i) it shall not enter into any lease, ground lease or sale agreement with any bank, savings and loan association or similar financial institution for any outparcels located in the southern one-half of the Shopping Center as now existing or hereafter altered...

  • Page 121
    ... Area"), flea market, massage parlor; for a so-called "off-track betting" operation (other than operations having no direct access to their premises from the Mall); lottery ticket sales (unless located within areas of the Shopping Center outside of the area identified on the Site Plan as "Food...

  • Page 122
    ... two hundred fifty (250) feet from the Store) dental and medical offices; and (b) permit the leasing or repair of motor vehicles if such activity is associated with the operation of a business engaged primarily in the sale of automotive parts and/or tires and is located at least four (400) feet from...

  • Page 123
    EXHIBIT "E" PARKING PLAN OF ADDITIONAL PARKING SPACES 26

  • Page 124
    ... POLICY (REVISED MARCH 2010) The Corporate Ethics Policy of Systemax Inc. (the "Company") was prepared to provide the directors, officers, employees and other representatives of the Company and its subsidiaries (collectively "Company Representatives") as well as the Company's shareholders, customers...

  • Page 125
    ... purchasing agent or other employee of any corporate or government customer (a "Purchasing Agent") without the knowledge of such customer's management. A "gift" includes any tangible and intangible payment or gratuity such as cash, products, meals, tickets to events, services, etc. A gift, which is...

  • Page 126
    ... agreement, a business venture, a consulting or service agreement, or an investment other than the ownership of the stock of a publicly traded company) without prior written disclosure to the Company and approval by the Company's Board of Directors or a Committee of the Board. Company managers...

  • Page 127
    ...comply with all applicable laws and regulations, including securities laws (which require fair disclosure of the Company's business and financial information to the public and prohibit any use of inside information about the Company in deciding to buy or sell stock of the Company, among other things...

  • Page 128
    ... fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission, the New York Stock Exchange or any other applicable regulatory body or in other public communications made by the Company. Company Representatives shall...

  • Page 129
    ... recording of sales transactions, inventory, accounts receivable, accounts payable or other revenue, expense or asset items.) The Company's Audit Committee of the Board of Directors oversees this process. The Company has set up an anonymous Telephone Hotline to receive such complaints. In order...

  • Page 130
    ...persons identified in Section 11 above for further consideration by the Corporate Governance Committee as to whether such activity should be permitted. In the event that such waiver is requested by a director or executive officer of the Company, such waiver may be granted only by the Board, and must...

  • Page 131
    ....com (a Delaware corporation) Profit Center Software Inc. (a New York corporation) Streak Products Inc. (a Delaware corporation) Systemax Manufacturing Inc. (a Delaware corporation) Systemax Puerto Rico, Inc. (a Puerto Rico corporation) SYX Services Inc. (a New York corporation) SYX Distribution Inc...

  • Page 132
    ... corporation) Misco AB (a Swedish corporation) Misco Iberia Computer Supplies S.A. (a Spanish corporation) Misco Ireland Ltd. (an Irish corporation) Misco Italy Computer Supplies S.P.A. (an Italian corporation) Misco Netherlands BV (a Dutch corporation) Misco OY (a Finnish corporation) Systemax...

  • Page 133
    ...respect to the consolidated financial statements and schedule of Systemax Inc., and the effectiveness of internal control over financial reporting of Systemax Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2009. /s/ Ernst & Young LLP New York, New York March 18, 2010

  • Page 134
    ... summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 18, 2010 /s/ RICHARD LEEDS Richard Leeds, Chief Executive Officer

  • Page 135
    ...CHIEF FINANCIAL OFFICER I, Lawrence P. Reinhold, certify that: 1. I have reviewed this annual report on Form 10-K of Systemax Inc. (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the...

  • Page 136
    ...Chief Executive Officer of Systemax Inc., hereby certifies that Systemax Inc.'s Form 10-K for the Year Ended December 31, 2009 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 (o)(d)) and that the information contained...

  • Page 137
    ...Chief Financial Officer of Systemax Inc., hereby certifies that Systemax Inc.'s Form 10-K for the Year Ended December 31, 2009 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 (o)(d)) and that the information contained...