CompUSA 2007 Annual Report Download - page 28

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23
KL2 2553275.3
Change In Control Payments
Name Cash Compensation
($)
Value of
Accelerated Vesting
of Stock Awards
($)
Medical and
Other Benefits
($) Total
($)
Richard Leeds -- -- -- --
Bruce Leeds -- -- -- --
Robert Leeds -- -- -- --
Gilbert Fiorentino $912,968 (1) (5) $13,030,324(6) $34,800(7) $13,978,092 (8)
Lawrence P. Reinhold $800,000(9) -- $34,800 $834,800
(1) Represents 2 years’ salary. Additional bonus payment may also be due.
(2) Represents accelerated vesting of 100,000 restricted stock units and options to purchase 66,666 shares of Company stock.
(3) Represents 2 years’ medical and other benefits.
(4) Represents 1 year’s salary.
(5) Upon a “Qualifying Change of Control” as defined in his employment agreement, Mr. Fiorentino would also receive 0.85% of
“Qualifying Value” of “Qualifying Change of Control” transaction as defined in his employment agreement.
(6) Represents accelerated vesting of 600,000 restricted stock units and options to purchase 66,666 shares of Company stock.
(7) Upon a change in control, Mr. Fiorentino may be subject to certain excise taxes under Section 280G of the Code. The
Company has agreed to reimburse Mr. Fiorentino for those excise taxes as well as for any income and excise taxes payable by
the officers as a result of any such reimbursement capped at $6 million in the aggregate.
(8) Total additional amounts for (a) bonus, (b) change of control payment as described in footnote (5), and (c) reimbursement of
excise taxes as described in footnote (7) may also be due.
(9) Represents 2 years’ salary.
APPROVAL OF THE EXECUTIVE INCENTIVE PLAN
Item 2 on Proxy Card
The Compensation Committee has determined that the adoption of an executive incentive plan (the
“Systemax Executive Incentive Plan”) will assist the Company in providing competitive incentive opportunities to
executive officers of the Company who can significantly influence the Company’s performance and improve its
ability to attract and motivate its management team. In this regard, subject to stockholder approval of this proposal,
executive officers of the Company will be eligible to receive an annual cash bonus, not to exceed 500% of their base
salary, based on the Company’s achievement of certain annual performance−based goals.
The Board proposes that stockholders approve the Executive Incentive Plan, so that if established goals and
targets are met, certain payments that would be made under this plan to the Company’s most highly compensated
officers may be deductible by the Company for federal income tax purposes.
Generally, Section 162(m) of the Code does not permit publicly held companies like the Company to
deduct compensation paid to certain executive officers to the extent it exceeds $1 million per officer in any year.
However, a performance−based compensation plan that is approved by stockholders at least once every five years
generally will not be subject to this deduction limit. So long as the Company complies with these and other
requirements set forth in Section 162(m) of the Code, all amounts paid to executive officers under the plan will
qualify for a federal tax deduction by the Company.
The Systemax Executive Incentive Bonus Plan is set forth below: