CompUSA 2008 Annual Report Download - page 25

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KL2 2600873.8
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.
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, 2015. 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 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
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.
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.”
Lawrence P. Reinhold
Lawrence P. Reinhold was appointed Executive Vice President and Chief Financial Officer effective January 17, 2007. The
Company entered into an employment agreement with Mr. Reinhold. The agreement provides for a minimum base salary of $400,000
(which may be increased at the discretion of the Company) and a bonus (which the agreement states is expected to be at least equal to
50% of the base salary) assuming Mr. Reinhold meets certain performance objectives (including the Company’ s financial performance
objectives) established for him by the Company. He is entitled to receive a car allowance or a Company-leased car.
In 2008, Mr. Reinhold received $455,250 in annual salary, a cash bonus of $325,000, a stock option grant of 50,000 shares of
Company stock and $22,923 in other compensation. In 2007, Mr. Reinhold received $380,385 in annual salary, a cash bonus of
$325,000, a stock option grant of 100,000 shares of Company stock pursuant to his employment agreement and $20,921 in other
compensation.
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.”
2009 NAMED EXECUTIVE OFFICER CASH BONUS PLAN
In March 2009, pursuant to the Company’ s Executive Incentive Plan approved by our stockholders in 2008, the Compensation
Committee, with input from our Chief Executive Officer, established target cash bonuses for the Named Executive Officers based on
the achievement of certain performance-based criteria in 2009. Messrs. Richard, Bruce and Robert Leeds and Mr. Reinhold can receive
cash bonuses (up to an aggregate multiple of base salary) based on (i) the Company’ s achievement of certain short-term and long-term
achievements. Short-term achievements include consolidated earnings targets and peer group financial comparisons. Long-term
achievements include strategic achievements (such as mergers and acquisitions (M&A) and major process improvements) and
corporate governance/compliance achievements (such as ethics and safety achievements). Mr. Fiorentino would be entitled to receive
cash bonuses for 2009 based on (i) the Company’ s Technology Products Group achieving certain earnings targets and (ii) the Company
successfully implementing technology enhancements in certain of our retail stores. In addition, each of the named executive officers
will be entitled to an additional cash bonus in connection with the Company implementing certain management financial reporting
technology enhancements in 2009.
Compensation Committee Report to Stockholders*