CompUSA 2009 Annual Report Download - page 31

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28
distributed within 30 days after a “Distribution Event”. A Distribution Event is defined as (x) 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 (y) 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.
Mr. Fiorentino’ s total compensation for 2009 was higher than the Company’ s other NEO’ s primarily as a result of the non-equity
incentive plan compensation granted to Mr. Fiorentino for 2009 due to the excellent performance of the Technology Products Group
and achievement of the retail store technology enhancements and information technology goals.
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 Reinhold
The Company entered into an employment agreement with Mr. Reinhold on January 17, 2007. 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.
Mr. Reinhold’ s bonus for 2009 was determined as described above under the heading 2009 Named Executive Officer Cash Bonus
Plan. Mr. Reinhold received a grant of equity compensation in 2009 in the form of stock options. The decision by the Compensation
Committee to award Mr. Reinhold stock options was based on Mr. Reinhold’ s significant accomplishments in 2009 as well as a desire
to further align his interests with those of the Company’ s stockholders. Base salary accounted for 21%, bonus accounted for 32%, and
the fair value at grant date of equity awards accounted for 45% of Mr. Reinhold’ s total compensation for 2009.
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.”
Systemax 2010 NEO Cash Bonus Plan
In March 2010, pursuant to the 2010 Long Term Incentive Plan adopted by the Board of Directors (subject to stockholder approval
at the Annual Meeting), our Compensation Committee, with input from our Chief Executive Officer, established our 2010 NEO Cash
Bonus Plan (“2010 Bonus Plan”)
For 2010, such financial and non-financial goals, the percentage of the executive’ s entire cash bonus tied to such goals and the
weighting of each component under such goal, are as follows:
providing for target cash bonuses for the NEO’ s based on the achievement of certain financial and
non-financial performance-based criteria in 2010. The 2010 Bonus Plan implements for 2010 the 2010 Long Term Incentive Plan,
subject to such stockholder approval, and pertains specifically to the payment of non-equity incentive compensation to NEO’ s for 2010.
• Financial Goals (80% of total cash bonus target)
− Adjusted Operating Income Growth (50%); the Compensation Committee believes this is the
most important individual component and aligns the interests of our executives with those of
our stockholders, in addition to building long term value. Adjusted Operating Income is
defined as operating income adjusted for unusual or nonrecurring items as determined by our
Compensation Committee.
− Sales Growth (20%); the Compensation Committee believes topline sales growth is key to our
Company remaining competitive with larger companies. Sales are defined as sales revenue net
of returns on a constant currency basis.
− Return on Invested Capital Growth (10%); the Compensation Committee believes this will
encourage management to pursue operational efficiencies in establishing strategic goals and
planning for growth. Return on Invested Capital is defined as adjusted operating income
divided by the sum of (i) the book value of stockholders’ equity plus the book value of interest-
bearing obligations minus total cash and cash equivalents.