**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C.20549**

 

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**Form 10-K/A**

** **

**AmendmentNo. 1**

 

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| **x**      | **ANNUAL REPORT PURSUANT TO  SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**    |
|------------|---------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                              |
| ** ** | **For the  fiscal year ended December 31, 2008**                                                   |
| ** ** | ** **                                                                                              |
| **o**      | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For the transition periodfrom          to          **

 

**CommissionFile Number: 0-25790**

 

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**PC MALL, INC.**

(Exactname of Registrant as specified in its charter)

 

| **Delaware**                     | ** ** | **95-4518700**          |
|----------------------------------|------------|-------------------------|
| (State  or other jurisdiction of |       | (IRS  Employer          |
| incorporation  or organization)  |       | Identification  Number) |

 

**2555 West190th Street, Suite 201, Torrance, CA 90504**

(Addressof principal executive offices, including zip code)

 

**(310) 354-5600**

(Registrant’stelephone number, including area code)

 

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Securitiesregistered pursuant to Section 12(b) of the Act:

 

| **Title  of Each Class**                           | ** ** | **Name of  Exchange on Which Registered** |
|----------------------------------------------------|------------|-------------------------------------------|
| **Common Stock, $0.001 par  value per share** | ** ** | **The NASDAQ Global Market**              |

 

Securitiesregistered pursuant to Section 12(g) of the Act:

**None**

 

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Indicate bycheck mark if the registrant is a well-known seasoned issuer, as defined in Rule 405of the Securities Act. Yes  o    No  x

 

Indicate bycheck mark if the registrant is not required to file reports pursuant to Section 13or Section 15(d) of the Act. Yes  o   No  x

 

Indicate bycheck mark whether the registrant: (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.    Yes  x    No  o

 

Indicate bycheck mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T during thepreceding 12 months (or for such shorter period that the registrant wasrequired to submit and post such files).      Yes  o    No  o

 

Indicate bycheck mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K.  o

 

Indicate bycheck mark whether the registrant is a large accelerated filer, an acceleratedfiler, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
|   | Large accelerated filer  o | Accelerated  filer   x         |   |
|--------|--------------------------------------|------------------------------------------|--------|
|   |                                 |                                     |   |
|   | Non-accelerated filer  o   | Smaller  reporting company   o |   |

 

Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Act).  Yes   ̈  No   x

 

As of June 30, 2008, the aggregate market value of the Common Stockheld by non-affiliates of the registrant was approximately $153.1 million,based upon the closing sales price of the registrant’s Common Stock on suchdate, as reported on the Nasdaq Global Market. Shares of Common Stock held byeach executive officer, director and each person owning more than 10% of theoutstanding Common Stock of the registrant have been excluded in that suchpersons may be deemed to be affiliates of the registrant. This determination ofaffiliate status is not necessarily a conclusive determination for otherpurposes.

 

As of April 23,2009, the registrant had 12,253,426 shares of common stock outstanding.

 

 

 

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**EXPLANATORY NOTE**

 

The registrant is filingthis Amendment No. 1 to its Annual Report on Form 10-K for the yearended December 31, 2008 filed with the Securities and Exchange Commissionon March 16, 2009 solely for the purpose of providing certain informationrequired by Part III of Form 10-K and to reflect exhibits filed withthis Amendment No. 1. Unless otherwise expressly stated, this Amendment No. 1does not reflect events occurring after the filing of the original Form 10-K,or modify or update in any way disclosures contained in the original Form 10-K.

 

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**PCMALL, INC.**

** **

**TABLE OF CONTENTS**

 
| ** **        | ** ** | ** **                                                                                      | ** ** | **Page**   |
|-------------------|------------|-------------------------------------------------------------------------------------------------|------------|------------|
| **PART III** | ** ** | ** **                                                                                      | ** ** | ** ** |
| Item 10.     |       | Directors,  Executive Officers and Corporate Governance                                         |       | 1          |
| Item 11.     |       | Executive  Compensation                                                                         |       | 9          |
| Item 12.     |       | Security Ownership of Certain Beneficial  Owners and Management and Related Stockholder Matters |       | 15         |
| Item 13.     |       | Certain  Relationships and Related Transactions, and Director Independence                      |       | 16         |
| Item 14.     |       | Principal  Accounting Fees and Services                                                         |       | 17         |
| **PART IV**  | ** ** | ** **                                                                                      | ** ** | ** ** |
| Item 15.     |       | Exhibits and  Financial Statement Schedules                                                     |       | 18         |
| Signatures        |       |                                                                                            |       | 22         |

 

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**PC MALL, INC.**

 

**PART III**

 

**ITEM 10.  DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

 

**InformationRegarding Our Board of Directors**

 

Set forth below is certaininformation, as of April 30, 2009, regarding the members of PC Mall, Inc.’s(“PC Mall,” “we” or “us”) board of directors. Each of our directors holdsoffice until our next annual meeting of stockholders or until his successor iselected and qualified.

 
| **Name**                | ** ** | **Age** | ** ** | **Position**                                                  | ** ** | **Director  Since** | ** ** |
|-------------------------|------------|---------|------------|---------------------------------------------------------------|------------|---------------------|------------|
| Frank F. Khulusi        |       | 42      |       | Chairman of the  Board, President and Chief Executive Officer |       | 1987                |       |
| Thomas A.  Maloof(2)    |       | 57      |       | Director                                                      |       | 1998                |       |
| Ronald B.  Reck(1)(2)   |       | 60      |       | Director                                                      |       | 1999                |       |
| Paul C.  Heeschen(1)(2) |       | 52      |       | Director                                                      |       | 2006                |       |

 

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(1)                      Member of ourcompensation committee.

(2)                      Member of ouraudit committee.

 

*Frank F. Khulusi*is one of our co-founders and has servedas our Chairman of the Board and Chief Executive Officer since our inception in1987, served as President until July 1999, and resumed the office ofPresident in March 2001. Mr. Khulusi attended the University ofSouthern California.

 

*Thomas A.Maloof*has served as one of our directors since May 1998. He served asChief Financial Officer of Hospitality Marketing Concepts from January 2001to August 2005, and has been an independent consultant since August 2005.Mr. Maloof served as President of Perinatal Practice Management, Inc.from February 1998 to November 2000. From August 2004 through April 11,2005, Mr. Maloof served on the board of directors of our formersubsidiary, eCOST.com, Inc. Mr. Maloof also serves as a director forFarmer Brothers Coffee (Nasdaq: FARM) and The Ensign Group (Nasdaq: ENSG).

 

*Ronald B.Reck*has served as one of our directors since April 1999. Mr. Reckwas employed by Applebee’s International from 1987 to 1997, serving mostrecently as Executive Vice President and Chief Administrative Officer. Since1998, Mr. Reck has served as President and Chief Executive Officer ofJoron Properties, LLC, a real estate company.

 

*Paul C.Heeschen*has served as one of our directors since February 2006.Mr. Heeschen has served as a member of the board of directors of DiedrichCoffee, Inc. since January 1996, and was elected to serve as itschairman in February 2001. Since 1995, Mr. Heeschen has been aprincipal of Heeschen & Associates, a private investment firm.

 

**ExecutiveOfficers**

 

A list of our executiveofficers is included in Part I, Item 4A of our original filing ofthis Form 10-K under the caption “Executive Officers of the Registrant.”

 

**CorporateGovernance**

 

**Identificationof Our Audit Committee**

 

We have a separatelydesignated standing audit committee established in accordance with theSecurities Exchange Act of 1934. The members of our audit committee are ThomasA. Maloof (Chair), Paul C. Heeschen and Ronald B. Reck. Our board of directorshas determined that each of the members of our audit committee is “independent”as that term is defined in Rule 10A-3(b)(1) promulgated under theExchange Act and is an “independent director” as defined in Rule 5605(a)(2) ofthe Nasdaq listing standards. Our board of directors has determined that eachof Mr. Maloof and Mr. Heeschen is an “audit committee financialexpert” as that term is defined by regulations of the Securities and ExchangeCommission and that each of them has accounting and related financial managementexpertise within the meaning of the applicable rules of Nasdaq.

 

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**Code ofBusiness Conduct and Ethics**

 

We have adopted a Code ofBusiness Conduct and Ethics that applies to each of our directors, officers andemployees, including our principal executive officer, principal financialofficer, and principal accounting officer or controller, or persons performingsimilar functions. Our Code of Business Conduct and Ethics, including anyamendments to, or waivers from such code, is posted in the “Investor Relations”section of our website at www.pcmall.com. We will provide a copy of our Code ofBusiness Conduct and Ethics to any person, without charge, upon receipt of awritten request directed to our Secretary at our principal executive offices.

 

**Section 16(a) BeneficialOwnership Reporting Compliance**

 

Section 16(a) ofthe Securities Exchange Act of 1934 requires our executive officers anddirectors, and persons who own more than ten percent of a registered class ofour equity securities, to file reports of ownership on Form 3 and changesin ownership on Forms 4 or 5 with the SEC. Those officers, directors andten percent stockholders are also required by the SEC’s rules to furnishus with copies of all Section 16(a) forms they file.

 

Based solely on our reviewof the copies of the forms we received, or representations from certainreporting persons that no Forms 5 were required for such persons, webelieve that during the fiscal year ended December 31, 2008, all Section 16(a) filingrequirements applicable to our officers, directors and ten percent stockholderswere complied with, except for a late Form 5 filed by Mr. Khulusireporting one exempt transaction.

 

**ITEM 11.  EXECUTIVECOMPENSATION**

 

**COMPENSATION DISCUSSION ANDANALYSIS**

 

**ExecutiveCompensation Philosophy and Principles**

 

The Compensation Committeeof our Board of Directors establishes our executive compensation philosophy andprinciples and oversees our executive compensation programs. The following arethe primary principles of our executive compensation programs, which togetherconstitute our executive compensation philosophy:

 

·  link executivecompensation to the creation of stockholder value;

 

·  reward contributions of executiveofficers that enhance our specific business goals; and

 

·  attract, retainand motivate high quality individuals.

 

Our executive compensationprograms have been designed and adopted by the Compensation Committee in aneffort to implement the above principles. The key elements of our executivecompensation program include base salary, quarterly bonuses, stock incentiveawards, health and welfare benefits, and other perquisites. The discussionbelow describes each of the key elements of our executive compensation for thefiscal year ended December 31, 2008.

 

**ExecutiveCompensation Process**

 

In establishingcompensation, our Compensation Committee, among other things:

 

·  reviews theperformance of our executive officers and each of the components of theircompensation;

 

·  evaluates theeffectiveness of our overall executive compensation program on a periodicbasis; and

 

·  administersour stock and bonus plans and, within the terms of these plans, determines theterms and conditions of the awards under these plans.

 

In addition, ourCompensation Committee annually reviews and approves our corporate goals andobjectives relative to our Chief Executive Officer’s compensation, evaluateshis compensation in light of such goals and objectives, and has the soleauthority to set the Chief Executive Officer’s compensation based on thisevaluation. The Compensation Committee also reviews the Chief Executive Officer’srecommendations regarding the compensation of our other executive officers andsets compensation for these individuals based in part on the recommendations ofthe Chief Executive Officer.

 

In April 2007, theCompensation Committee engaged Towers Perrin, a nationally recognizedcompensation consulting firm, to advise the Committee on our executivecompensation programs and to conduct an independent competitive assessment ofour director and executive officer compensation in an effort to ensure thatsuch compensation levels and practices satisfy our compensation

 

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philosophies and principlesand are established in part based upon consideration of objective marketcompensation data. Towers Perrin provided the Compensation Committee with aninitial report in June 2007 and a final report in December 2007,which were presented and discussed by the Committee at regularly scheduledmeetings of the Committee. These reports, together with input to the Committeefrom our Chief Executive Officer regarding incentive and retention of our otherexecutive officers were considered by the Committee in establishing each of thecomponents of executive compensation for fiscal year 2008, as discussed in moredetail below.

 

**TotalCompensation of Executive Officers**

 

Our executive compensationprograms consist primarily of (i) base salary, (ii) short-termincentive compensation in the form of quarterly cash bonuses and (iii) long-termincentive compensation in the form of stock options. We also provide ourexecutive officers with other benefits, including certain perquisites andseverance and change of control agreements discussed in more detail below. Eachof these components of executive compensation has been provided to satisfy ourcompensation philosophy and principles after review of market executivecompensation data provided by a nationally recognized compensation consultingfirm and, for executives other than the Chief Executive Officer, based in parton qualitative input and recommendations made to the Compensation Committee byour Chief Executive Officer. For the 2008 fiscal year, each of our executiveofficers received cash compensation in the form of an annual base salary andcash bonuses, and each also received long-term incentive compensation in theform of stock option grants.

 

In determining thecompensation for our Chief Executive Officer, in addition to the applicablefactors set forth below, the Compensation Committee also took intoconsideration the record of his leadership and vision since our company’sinception in 1987; his close identification with us by our employees andvendors, the financial community and the general public; and the recognition bythe Compensation Committee and others in our industry of the importance of hisleadership to our continued success.

 

Please refer to the tablesunder the section entitled “Executive and Director Compensation” below for adetailed presentation of the specific compensation earned by each of our namedexecutive officers in the 2008 fiscal year.

 

In assessing thecompetitiveness of our executive compensation, our Compensation Committeereviewed reports from Towers Perrin, the independent compensation consultingfirm engaged by the Committee, which developed comparable market compensationdata using both surveys and public proxy data reported for the year ended December 31,2006 by direct competitors as well as selected retail and technology industrypeers. The peer group included the following direct competitors, retailindustry peers and technology industry peers:

 

*DirectPeers:* CDW Corporation, GSI Commerce, Inc., GTSI Corp., InsightEnterprises, Inc., PC Connection, Inc., Systemax, Inc. and Zones, Inc.

 

*RetailPeers:* Netflix, Inc. and Overstock.com, Inc.

 

*TechnologyIndustry Peers:*Adaptec, Inc., Foundry Networks, Inc.,Gateway, Inc., Iomega Corp., NETGEAR, Inc., Palm, Inc.,Plantronics, Inc. and Polycom, Inc.

 

We include our directcompetitors and other online retail companies because we compete with them forbusiness, as well as talent. We include leading national technology companiesbecause they have a large influence on industry compensation practices. Theretail and technology peer companies were included based on the advice of theindependent compensation consulting firm engaged by the Compensation Committee.Survey data used in the report were collected from Towers Perrin’s 2006Retail/Wholesale Industry Executive Compensation Database and were benchmarkedbased on job titles and scope of responsibilities for each of our namedexecutive officers. Target pay levels were then determined by using regressionanalysis to adjust both survey and proxy data based on annual revenues of $1billion for our company.

 

In late 2007 and early 2008,the Compensation Committee held several meetings at which it reviewed andconsidered this comparative peer group data together with qualitative inputfrom the Chief Executive Officer regarding retention and incentive requirements(for executive officers other than the Chief Executive Officer), inestablishing our executive compensation programs for 2008. The Committeedetermined that the total compensation and each component of compensation to beprovided to each executive officer in 2008 was within the range of totalcompensation and the range of each component of compensation paid to similarlysituated executive officers in the reviewed data. However, the CompensationCommittee did not establish any specific peer group comparative percentiletargets or relative percentages of total compensation that any component ofcompensation should represent for any of our executives.

 

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**BaseSalaries**

 

The base salaries we provideto our executive officers are intended as compensation for each executiveofficer’s ongoing contributions to the performance of the operational area(s) forwhich he or she is responsible. In keeping with our compensation philosophy toattract and retain high quality individuals, executive officer base salarieshave been targeted to be competitive with base salaries paid to executiveofficers of the peer companies described above and with the Los Angeles marketfor executives of publicly traded companies having similar revenues and numberof employees to those of PC Mall. These market comparables were determined ineach case based on data reviewed by the Compensation Committee. For executiveofficers other than our Chief Executive Officer, base salaries also wereestablished in part after consideration of qualitative input from our ChiefExecutive Officer about retention and incentive considerations after hisdiscussions with individual executive officers.

 

The base salaries of ourexecutive officers are reviewed annually and adjusted from time to time fromthe original amounts provided in employment agreements to recognize individualperformance, promotions, competitive compensation levels, retention and incentiveconsiderations and other qualitative factors. In addition to adjustments madefor competitive, retention and incentive reasons, the Committee hasperiodically adjusted executive officer base salaries based on its assessmentof each executive’s performance and history with us and our overall budgetaryconsiderations for salary increases. Based in part on the reports provided tothe Committee by the independent compensation consulting firm, no changes weremade for fiscal year 2008 to the base salary rates in effect at the end offiscal year 2007 for any of our executive officers serving in the samepositions they had served during fiscal year 2007, except for small increaseswhich were made effective in December 2008 to offset the discontinuationof the subsidized medical and dental benefits for these executives. In July 2008,however, Brandon LaVerne was promoted from the position of Interim ChiefFinancial Officer to Chief Financial Officer. In connection with thispromotion, Mr. LaVerne’s base salary for 2008 was increased to an annualbase salary rate of $275,000 from an annual base salary rate of $206,000. Thisbase salary increase was approved by our Board of Directors in July 2008based upon a recommendation from our Chief Executive Officer after negotiationswith Mr. LaVerne, qualitative input to the Compensation Committee from ourChief Executive Officer and consideration of the above described compensationdata.

 

**Short-TermIncentive Compensation**

 

Each of our named executiveofficers other than our General Counsel is eligible to participate in ourexecutive bonus plan, which was originally adopted by our CompensationCommittee in February 2005 and was modified effective January 1,2008. The plan was designed to award quarterly and annual cash bonuses toeligible officers only in the event we achieved short-term financial goals. For2008, these financial goals consisted of year-over-year quarterly and annualimprovements in our consolidated adjusted pre-tax income. The plan was intendedto reward and motivate our executives and to align the interests of managementwith our stated objectives to focus on our profitability and increaseshareholder value. Under this executive bonus plan, for each fiscal quartereach of our named executive officers is eligible to receive a maximum aggregatequarterly cash bonus amount equal to a fixed percentage of any amount by whichour consolidated adjusted pre-tax income for such quarter exceeds ourconsolidated adjusted pre-tax income for the same quarter of the prior year andan additional maximum aggregate annual bonus amount equal to a fixed percentageof any amount by which our consolidated adjusted pre-tax income for such fiscalyear exceeds our consolidated adjusted pre-tax income for the prior fiscalyear. For purposes of the executive bonus plan, “adjusted income” is defined asour consolidated pre-tax income for the applicable period, less certain coststhat are excluded from the calculation on a periodic basis by the CompensationCommittee in its sole discretion. Such adjustments were intended to allow theCommittee to exclude expenses that it may determine do not allow for a faircomparison of performance in the applicable period or expenses which it maydetermine are not in the control of the eligible executives. The CompensationCommittee retains discretion to award less than the full amount of the bonusespermitted under the executive bonus plan as well as discretion as to the itemsto be excluded in the calculation of “adjusted income.” Historically, theseexcluded items have included stock-based compensation expense, litigationsettlement charges and goodwill impairment charges.

 

The Committee allocatesavailable amounts under the plan to eligible executive officers based onmaximum quarterly fixed percentages for each officer. These maximum amounts aresubject to reduction by the Compensation Committee in its discretion.Reductions in the maximum amounts paid to individual named executive officershave generally been made based on qualitative recommendations from our ChiefExecutive Officer (for executives other than the Chief Executive Officer). OurChief Executive Officer is entitled to receive a maximum of up to 2.85% of anyquarterly improvement in consolidated adjusted pre-tax income and 0.95% of any annualimprovement in consolidated adjusted pre-tax income. Our remaining namedexecutive officers participating in the plan, Brandon LaVerne, Kris Rogers andDan DeVries, are each eligible to receive up to a maximum of 0.90% of anyquarterly improvement in consolidated adjusted pre-tax income and 0.30% of anyannual improvement in consolidated adjusted pre-tax income.

 

In 2007, some amounts whichmay otherwise have been paid under the executive bonus plan relating to thefirst three quarters of 2007 were not paid to the named executive officers in2007 because the executive bonus plan for 2007 was under review by theCommittee during the first half of 2007. In February 2008, theCompensation Committee determined to pay the named executive officers additionalbonuses that otherwise would have been available to be paid to them in 2007under the executive bonus plan but

 

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were not approved or paid in2007 because of such pending review. Accordingly, Mr. Khulusi, Ms. Rogersand Mr. Devries each received additional bonuses approved in February 2008that were calculated based on the historic executive bonus plan and the Company’squarterly performance in the first three quarters of 2007. The amounts of suchadditional bonuses approved in February 2008 were $124,653, $43,995 and$21,624, respectively, and were included in the “Summary Compensation Table”for the 2007 fiscal year contained in our Form 10K/A for the fiscal yearending December 31, 2007.

 

In establishing theexecutive bonus plan for 2008, the Compensation Committee considered data andanalysis contained in the reports provided to the Committee by the independentcompensation consulting firm together with qualitative input andrecommendations of our Chief Executive Officer and historic participation ofthe executive officers in the executive bonus plans. Based on this data andanalysis, the Committee determined that the amounts payable to the namedexecutive officers in accordance with the executive bonus plan for 2008 wouldallow for a total cash compensation for each such officer within the peer grouprange for total cash compensation.

 

The bonuses paid to ourGeneral Counsel, Mr. Newton, and to Mr. LaVerne prior to hispromotion to Chief Financial Officer, were paid in accordance with theirrespective employment agreements or arrangements, as such amounts have beenincreased from time to time by the Compensation Committee in its discretion.The total amount of bonuses paid to each of Mr. Newton, and Mr. LaVerneprior to his promotion to Chief Financial Officer, were based in each case inpart upon the Committee’s review of the total cash compensation data relativeto the peer groups provided in the reports to the Compensation Committee fromthe independent compensation consulting firm and in part upon therecommendation of our Chief Executive Officer after a qualitative evaluation oftheir contributions to the Company.

 

**Long-TermIncentive Compensation**

 

Our long-term incentivecompensation has historically consisted only of stock option grants, which areprovided under our 1994 Stock Incentive Plan and administered by theCompensation Committee. We have made periodic grants of stock options toexecutives for the purpose of aligning their long-term motivations with theinterests of our stockholders and in consideration of the fact that we offer noother significant long-term, deferred or retirement compensation to ourexecutive officers.

 

Stock options havehistorically generally been granted to our executive officers based on asubjective and market-based evaluation by the Compensation Committee (based inpart upon recommendations from our Chief Executive Officer with respect toexecutive officers other than the Chief Executive Officer) of a recipient’scontributions and continuing value to us and the performance of his or herrespective operational areas of responsibility. Compensation previouslyrealized by our executive officers from the exercise of vested optionshistorically has not been considered by our Compensation Committee when givingnew equity awards but may be considered when making future grants.

 

In determining whatlong-term incentive programs to offer our executive officers, the CompensationCommittee considers the impact of our adoption of SFAS 123R “Share-BasedPayment,” which requires us to expense the compensation costs related to stockoption awards ratably over their vesting periods.

 

From time to time, ourCompensation Committee evaluates the structure of our long-term incentiveprograms and may make modifications to these programs to reflect our changingneeds and our need to attract, retain and motivate our executive officers.These changes may be based, in part, on market conditions and the compensationprograms of our competitors. As new long-term incentive instruments aredeveloped and the tax and accounting treatment of various instruments aresubject to change over time, management and the Compensation Committeeregularly review our compensation programs to determine whether these programsare accomplishing our goals in a cost-effective manner.

 

The compensation reportsprovided to the Compensation Committee by the independent compensationconsulting firm included long-term, non-cash incentive compensation marketcompetitive data and analysis, which was reviewed and considered by theCommittee in determining the 2008 stock option grants to executives. This dataand analysis contemplated the annualized expected value of option grantsultimately provided to our executive officers in 2008 relative to long-term,non-cash incentive compensation provided to peer group executives. The value ofeach grant also was analyzed for its effect on total compensation, representingthe long-term, non-cash component of our executive compensation. The Committeedetermined that the level of each grant in 2008 to each of our executiveofficers was within the range of annual long-term, non-cash incentivecompensation relative to the considered peer groups for each executive officerand further determined that the level of each grant in 2008 to each executiveofficer when considered together with the total cash compensation for 2008placed the level of 2008 total compensation for each executive officer withinthe market range.

 

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**Timing, Pricing and Terms of Stock Option Awards**

 

Wehave generally considered option grants to our executive officers at regularlyscheduled meetings of the Compensation Committee. In November 2008, theCompensation Committee approved additional option grants to our executiveofficers after consideration of extraordinary market circumstances beginning inthe second half of 2008. The Compensation Committee consulted with TowersPerrin in connection with its consideration of these additional grants. The additionalgrants were made in an effort to meet our compensation philosophy of providingour executive officers with long-term incentive compensation which aligns theirlong-term motivations with the objective of creating long-term shareholdervalue. The Compensation Committee determined that the additional grants,together with all other compensation programs provided to our executiveofficers in 2008, provided each of our executive officers with total annualcompensation opportunities for 2008 in amounts that were within market rangesfor each such executive officer. Mr. Khulusi, Mr. LaVerne, Ms. Rogers,Mr. DeVries and Mr. Newton received additional stock options awardsin the respective amounts of 65,000, 30,000, 30,000, 20,000 and 30,000 optionsin connection with these November 2008 stock option grants.

 

Formalapproval of stock option grants is obtained on the date of grant. We do nothave, and do not intend to have, any program, plan or practice to time thegrant of stock options in coordination with the release of material non-publicinformation. We also do not have, and do not intend to have, any program, planor practice to time the release of material non-public information for thepurpose of affecting the value to executive compensation. The exercise pricefor stock options we have granted equals the closing price of our common stockon the grant date. We have granted fixed-price stock options that generallyvest in equal quarterly installments usually over a three or four year period.Our option grants have not historically contained performance vesting features.

 

Becausethe value of stock option awards increase only if the price of our common stockincreases after grant, the time vesting feature of our option grants has beenintended as an important feature of each option designed to motivate ourexecutive officers to enhance our stockholders’ value over a long-term period.

 

**Employment Agreements and Severance and Change-in-ControlArrangements**

 

InJanuary 1995, prior to our initial public offering, we entered into anemployment agreement with Frank F. Khulusi, our Chairman, President andChief Executive Officer. Mr. Khulusi’s employment agreement, which wasamended in December 2005 and in December 2008, provides for one-yearextensions unless it is terminated by us or Mr. Khulusi. Mr. Khulusi’sannual salary pursuant to his employment agreement has been increasedperiodically, and was most recently increased by our Compensation Committee,effective March 1, 2006, from $600,000 to $800,000. Previously, in May 2005,Mr. Khulusi voluntarily elected to reduce his annual base salary from$800,000 to $600,000. Mr. Khulusi is eligible to participate in ouremployee benefit plans that are generally available to similarly situatedemployees.

 

Mr. Khulusi’semployment agreement provides that he is entitled to certain severance benefitsin the event that his employment is terminated by us without cause or by Mr. Khulusifor good reason or following a change of control as follows:

 

·                 If Mr. Khulusi’semployment is terminated by the Company without cause (which may occur at anytime upon 90 days’ advance written notice to Mr. Khulusi), theCompany will pay him his salary through the end of the notice period and, inaddition, a lump sum amount equal to two times the total salary and bonuscompensation paid to him for the twelve months immediately preceding the noticeof termination, in each case subject to the December 2008 amendment of Mr. Khulusi’semployment agreement which amended the agreement to clarify that the agreementis intended to comply with Section 409A of the United States InternalRevenue Code and related regulations in all instances and that any paymentswhich would cause non-compliance will be delayed in a manner necessary forcompliance;

 

·                 If Mr. Khulusi’semployment is terminated by him for good reason (which may occur upon30 days’ advance written notice to the Company), including as a result ofthe Company notifying him of its decision to not renew the employment agreementfor an additional period as described above, the Company will pay him a lumpsum upon such termination equal to two times the total salary and bonuscompensation paid to him for the twelve months immediately preceding the noticeof termination; and

 

·                 In the event of a change ofcontrol of the Company, upon consummation of the change of control, Mr. Khulusi’semployment agreement will terminate and he will receive a lump sum paymentequal to two times the total salary and bonus compensation paid to him for thetwelve months immediately preceding the change of control.

 

If the severance paymentpayable under his employment agreement in the event of a change of control,either alone or together with other payments he has the right to receive fromus, would not be deductible (in whole or in part) by the Company as a result ofthe payment constituting a “parachute payment” under Section 280G of theInternal Revenue Code, the severance payment under the employment agreementwill be reduced to the maximum deductible amount under the Code.

 

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Forthe purposes of Mr. Khulusi’s employment agreement, a “change of control”of the Company will be deemed to have occurred if:

 

·                 there is consummated (i) anyconsolidation or merger of the Company in which the Company is not thecontinuing or surviving corporation or pursuant to which shares of the Company’scommon stock would be converted into cash, securities or other property, otherthan a merger of the Company in which the holders of the Company’s common stockimmediately prior to the merger have the same proportionate ownership of commonstock of the surviving corporation immediately after the merger, (ii) anyreverse merger in which the Company is the continuing or surviving corporationbut in which securities possessing more than 50% of the total combined votingpower of the Company’s outstanding securities are transferred to a person orpersons different from those who hold such securities immediately prior to themerger, or (iii) any sale, lease, exchange or other transfer (in one ormore related transactions) of all, or substantially all, of the assets of theCompany;

 

·                 our stockholders approve aplan or proposal for the liquidation or dissolution of us;

 

·                 any person other than Mr. Khulusior certain of his relatives or affiliates become the direct or indirectbeneficial owners of 20% or more of our common stock (other than as a result ofpurchases by such person directly from us); or

 

·                 during any 12-month period,individuals who at the beginning of the period constitute our entire Board ofDirectors cease for any reason to constitute a majority thereof unless the election,or the nomination for election by our stockholders, of each new director wasapproved by a vote of at least a majority of the directors then still in officewho were directors at the beginning of the period.

 

If Mr. Khulusi’semployment is terminated due to death or disability, the terms of hisemployment agreement require that he (or his beneficiaries, as applicable) bepaid his salary through the end of the month in which the termination occurs.If Mr. Khulusi is terminated for cause (which may occur upon 30 days’advance written notice to Mr. Khulusi), the terms of his employmentagreement require that he be paid his salary through the end of the noticeperiod.

 

Mr. LaVerneis an “at will” employee and is currently entitled to an annual base salary of$279,413. Mr. LaVerne is eligible to participate in our executive bonusplan in the discretion of our Compensation Committee, and may receivediscretionary bonuses from time to time in the discretion of our CompensationCommittee with the input of our Chief Executive Officer. In January 2007,we entered into a severance agreement with Mr. LaVerne, pursuant to which Mr. LaVerneis entitled to severance pay equal to six months of his annual base salary inthe event his employment is terminated without cause within a twelve monthperiod following a change-in-control of our company. The severance paymentswould be made in equal installments over six months and are contingent upon hisexecution of a satisfactory severance and release agreement. Mr. LaVerneis eligible to participate in our employee benefit plans that are generallyavailable to similarly situated employees.

 

InJanuary 2000, we entered into an employment agreement with Kristin M.Rogers, our Executive Vice President, Sales. Pursuant to Ms. Rogers’employment agreement, her compensation includes (i) an annual base salaryand (ii) an annual bonus based upon the achievement of goals mutuallyagreed upon by us and Ms. Rogers. Pursuant to the terms of our agreementwith Ms. Rogers, she is an “at will” employee and is currently entitled toan annual base salary of $339,414. Ms. Rogers’ employment agreement alsoprovides that in the event she is terminated by us without cause (as defined inher employment agreement), upon the execution of a separation agreementsatisfactory to us, Ms. Rogers is entitled to receive a severance paymentequal to six months of her base compensation and health insurance coverage for Ms. Rogersand her family for up to six months or for a shorter period if other employmentis accepted by Ms. Rogers. The severance payments would be made in equalinstallments over the six month (or shorter) period, as applicable. Instead ofreceiving an annual bonus as set forth in her employment agreement, Ms. Rogerscurrently participates, in the discretion of our Compensation Committee, in ourexecutive bonus plan. Ms. Rogers is entitled to receive a monthlyautomobile allowance, and is eligible to participate in our employee benefitplans that are generally available to similarly situated employees.

 

InJune 2004, we entered into an employment agreement with Robert I. Newton,our General Counsel and Secretary. Mr. Newton’s employment agreement wasamended in February 2005. Pursuant to the terms of our agreement with Mr. Newton,he is an “at will” employee and is currently entitled to an annual base salaryof $304,413. Mr. Newton is currently eligible to receive an annual bonusof up to $120,000, as well as additional discretionary bonuses as determinedfrom time to time by the Compensation Committee, and is entitled to severancepay equal to six months of his annual base salary in the event his employmentis terminated without cause. The severance payments would be made in equalinstallments over six months and are contingent upon his execution of asatisfactory severance and release agreement. Mr. Newton is eligible toparticipate in our employee benefit plans that are generally available tosimilarly situated employees.

 

InJanuary 2004, we entered into a written employment agreement with Dan DeVries,our Executive Vice President, Marketing. Pursuant to the terms of our agreementwith Mr. DeVries, he is an “at will” employee and is currently entitled toan annual base salary of $282,819. Mr. DeVries is eligible to participatein our executive bonus plan in the discretion of our Compensation Committee, as

 

7

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well as to receivediscretionary bonuses from time to time in the discretion of our CompensationCommittee and our Chief Executive Officer. In January 2006, we enteredinto a severance agreement with Mr. DeVries, which was approved by ourCompensation Committee, pursuant to which Mr. DeVries is entitled toseverance pay equal to six months of his annual base salary in the event hisemployment is terminated without cause. The severance payments would be made inequal installments over six months and is contingent upon his execution of asatisfactory severance and release agreement. Mr. DeVries is also entitledto receive a monthly automobile allowance, and is eligible to participate inour employee benefit plans that are generally available to similarly situatedemployees.

 

In addition to the above discussed agreements, under the terms of ouroption agreements with our executive officers, upon the occurrence of (i) certainevents resulting in a change of control of our company or (ii) certainmajor corporate transactions, all of the unvested stock options for our ChiefExecutive Officer, Chief Financial Officer and General Counsel will becomefully vested and exercisable, subject to certain exceptions and limitations anda portion of the unvested stock options of our other executive officers willbecome vested and exercisable, subject to certain exceptions and limitations.

 

Theemployment agreements and severance and change-in-control benefits provided toour executives under these agreements were approved by our CompensationCommittee following our negotiations with our executive officers and weredetermined to be reasonable and necessary in order to hire and retain theseindividuals. Mr. Khulusi’s agreement was originally executed in 1995 andat that time we established certain change-in-control and severance protectionsfor Mr. Khulusi. We believe that it is important to provide continuedprofessional stability to those executive-level employees who helped build ourcompany and whose leadership is important to our continued success. Further, webelieve that the interests of our stockholders will be best served if theinterests of our most senior management are aligned with them. Providing changein control benefits, including the severance and option acceleration benefits,is designed to reduce the reluctance of senior management to pursue potentialchange of control transactions that may be in the best interests of ourstockholders. The severance and change-in-control benefits offered to ourexecutive officers did not affect the Compensation Committee’s determination ofthe total compensation, or any component of compensation, we provided to ourexecutive officers in 2008.

 

Copiesof each of the above-referenced employment agreements, as well as a summary ofour executive bonus plan, are filed as exhibits to our original filing of thisAnnual Report on Form 10-K filed with the Securities and Exchange Commissionon March 16, 2009.

 

**Perquisites and Other Benefits**

 

Weprovide our executive officers, including our Chief Executive Officer, withperquisites that we believe are reasonable, competitive and consistent with ouroverall executive compensation program. We believe that our perquisites help usto hire and retain qualified executives. In 2008, our executive officersreceived health care benefits in the form of subsidized health care insurancepremium payments we made on behalf of our executives and their family members. Ms. Rogersand Mr. DeVries each receive monthly car allowances. For additionalinformation regarding perquisites we provided to each of our named executiveofficers please refer to the “Summary Compensation Table” below.

 

**Policy Regarding Deductibility of Compensation**

 

Section 162(m) ofthe Internal Revenue Code, enacted in 1993, generally disallows a tax deductionto public companies for compensation over $1.0 million paid to the ChiefExecutive Officer or any of the other four most highly compensated executiveofficers. However, certain compensation meeting a tax law definition of “performance-based”is generally exempt from this deduction limit. We do not currently have apolicy regarding qualification of cash compensation, such as salary andbonuses, for deductibility under Section 162(m). We have includedprovisions in the 1994 Stock Incentive Plan designed to enable grants ofoptions and stock appreciation rights to executives affected by Section 162(m) toqualify as “performance-based” compensation. In fiscal 2008, our executives didnot receive compensation subject to Section 162(m) at a level thatexceeds the $1.0 million limit, except for our Chief Executive Officer whowas paid total cash compensation of approximately $1.1 million. However, theCompensation Committee believes that in certain circumstances factors otherthan tax deductibility take precedence when determining the forms and levels ofexecutive compensation most appropriate and in the best interests of us and ourstockholders. Given our changing industry and business, as well as thecompetitive market for outstanding executives, the Compensation Committeebelieves that it is important to retain the flexibility to design compensationprograms consistent with its overall executive compensation philosophy even ifsome executive compensation is not fully deductible. Accordingly, theCompensation Committee may from time to time deem it appropriate to approveelements of compensation for certain officers that are not fully deductible.

 

8

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**EXECUTIVE AND DIRECTOR COMPENSATION**

 

**Summary Compensation Table**

 

Thefollowing table sets forth the cash and non-cash compensation for fiscal years2008, 2007 and 2006 awarded to or earned by our Chief Executive Officer, ourChief Financial Officer and each of our other three most highly compensatedexecutive officers whose compensation exceeded $100,000. The individuals listedin the following table are sometimes referred to as the “named executive officers.”

 
| **Name and Principal Position**   | ** ** | **Year**   | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)** | ** ** | **Option  Awards  ($)(1)** | ** ** | **All Other  Compensation  ($)** | ** ** | **Total  ($)** | ** ** |
|--------------------------------------------------|------------|------------|------------|-----------------|------------|----------------|------------|----------------------------|------------|---------------------------------------|------------|----------------|------------|
| ** **                                       | ** ** | ** ** | ** ** | ** **      | ** ** | ** **     | ** ** | ** **                 | ** ** | ** **                            | ** ** | ** **     | ** ** |
| Frank F. Khulusi                                 |       | 2008       |       | $               | 806,982    |           | $          | 113,671                    |       | $                                     | 177,666    |           | $          | 11,093 | (4) | $ | 1,109,412 |   |
| *President and CEO*                              |       | 2007       |       | 800,000         |       | 355,491        |       | 103,740                    |       | 9,512                                 | (4)        | 1,268,743      |       |
|                                             |       | 2006       |       | 767,702         |       | 157,357        | (2)(3)     | 103,740                    |       | 10,701                                | (4)        | 1,039,500      |       |
|                                             |       |       |       |            |       |           |       |                       |       |                                  |       |           |       |
| Brandon H. LaVerne (5)                           |       | 2008       |       | 241,875         |       | 28,000         |       | 69,287                     |       | 6,685                                 | (4)        | 345,847        |       |
| *Chief Financial Officer*                        |       | 2007       |       | 194,604         |       | 53,350         |       | 47,692                     |       | 5,232                                 | (4)        | 300,878        |       |
|                                             |       |       |       |            |       |           |       |                       |       |                                  |       |           |       |
| Kristin M. Rogers                                |       | 2008       |       | 338,042         |       | 22,689         |       | 116,072                    |       | 13,890                                | (7)        | 490,693        |       |
| *Executive Vice President- Sales  and Marketing* |       | 2007       |       | 312,865         |       | 125,468        |       | 108,561                    |       | 16,971                                | (7)        | 563,865        |       |
|                                             |       | 2006       |       | 296,403         |       | 82,928         |       | 98,917                     |       | 15,598                                | (6)        | 493,846        |       |
|                                             |       |       |       |            |       |           |       |                       |       |                                  |       |           |       |
| Daniel J. DeVries                                |       | 2008       |       | 277,948         |       | 35,189         |       | 90,111                     |       | 21,438                                | (7)        | 424,686        |       |
| *Executive Vice President- Consumer*             |       | 2007       |       | 264,346         |       | 103,098        |       | 67,193                     |       | 20,656                                | (7)        | 455,293        |       |
|                                             |       | 2006       |       | 257,500         |       | 78,143         |       | 57,549                     |       | 19,481                                | (6)        | 412,673        |       |
|                                             |       |       |       |            |       |           |       |                       |       |                                  |       |           |       |
| Robert I. Newton                                 |       | 2008       |       | 302,773         |       | 120,000        |       | 74,576                     |       | 6,936                                 | (4)        | 504,285        |       |
| *General Counsel and Secretary*                  |       | 2007       |       | 267,692         |       | 135,000        |       | 118,341                    |       | 6,784                                 | (4)        | 527,817        |       |
|                                             |       | 2006       |       | 250,000         |       | 90,000         |       | 159,980                    |       | 4,955                                 | (4)        | 504,935        |       |
|                                                  |            |            |            |                 |            |                |            |                            |            |                                       |            |                |            |  |  |  |  |  |

 

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| (1) | Represents the dollar  amounts associated with the named executive officers’ option grants that are  recognized as stock-based compensation expense in the 2008, 2007 and 2006  fiscal years for financial statement reporting purposes in accordance with  SFAS 123R, but excluding any estimate of future forfeitures related to  service-based vesting conditions and reflecting the effect of any actual  forfeitures. For a detailed discussion of the assumptions made in the  valuation of stock option awards, please see Notes 2 and 3 of our Notes  to the Consolidated Financial Statements included in our original filing of  this Annual Report on Form 10-K for the year ended December 31,  2008. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Excludes certain bonus  amounts under our executive bonus plan, which were awarded to  Mr. Khulusi by the Compensation Committee, but which Mr. Khulusi  voluntarily declined to receive as follows: $13,718 and $38,228 relating to  the quarters ended March 31, 2006 and June 30, 2006, and $55,955,  representing half of his bonus relating the quarter ended September 30,  2006. In total, Mr. Khulusi elected not to receive bonus payments  aggregating $107,901 for fiscal 2006.                                                                                                                                                                                                                   |
| (3) | Bonus amounts relating to  2006 for Mr. Khulusi were previously reported in the “Non-Equity  Incentive Plan Compensation” column for the 2006 fiscal year, and are reported  in the “Bonus” column in the table above for comparison purposes. All such  reported amounts were paid under our executive bonus plan.                                                                                                                                                                                                                                                                                                                                                                                               |
| (4) | Includes medical and  dental insurance premiums we subsidized through November 2008 on behalf  of the executive above and beyond pricing that is available to the general  employee population, and company matched 401(k) contributions on behalf  of the executive which the Company began matching as of July 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                   |
| (5) | On June 7, 2007, our  board of directors appointed Mr. LaVerne as Interim Chief Financial  Officer effective upon the departure of our former Chief Financial Officer on  June 30, 2007. In July 2008, Mr. LaVerne was promoted from the  position of Interim Chief Financial Officer to Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                                 |
| (6) | Includes medical and  dental insurance premiums we subsidized through November 2008 on behalf  of the executive above and beyond pricing that is available to the general  employee population, and car allowances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (7) | Includes medical and  dental insurance premiums we subsidized through November 2008 on behalf  of the executive above and beyond pricing that is available to the general  employee population, company matched 401(k) contributions on behalf of  the executive, and car allowances.                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

9

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**Grants of Plan-Based Awards (2008)**

 
| **Name**           | ** ** | **Grant  Date** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying  Options (#)** | ** ** | **Exercise  or Base   Price of  Option  Awards  ($/sh)** | ** ** | **Grant Date  Fair  Value of  Option  Awards (3)** | ** ** |
|--------------------|------------|-----------------|------------|-----------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|
| Frank F. Khulusi   |       | 07/31/2008      |       | 90,000                                                                                        | (1)        | $                                                                       | 8.92       |                                                              | $          | 524,962 |   |
|               |       | 11/07/2008      |       | 65,000                                                                                        | (2)        | 4.01                                                                    |       | 168,647                                                           |       |
| Brandon H. LaVerne |       | 07/31/2008      |       | 35,000                                                                                        | (1)        | 8.92                                                                    |       | 204,152                                                           |       |
|               |       | 11/07/2008      |       | 30,000                                                                                        | (2)        | 4.01                                                                    |       | 77,837                                                            |       |
| Kristin M. Rogers  |       | 07/31/2008      |       | 20,000                                                                                        | (1)        | 8.92                                                                    |       | 116,658                                                           |       |
|               |       | 11/07/2008      |       | 30,000                                                                                        | (2)        | 4.01                                                                    |       | 77,837                                                            |       |
| Daniel J. DeVries  |       | 07/31/2008      |       | 15,000                                                                                        | (1)        | 8.92                                                                    |       | 87,494                                                            |       |
|               |       | 11/07/2008      |       | 20,000                                                                                        | (2)        | 4.01                                                                    |       | 51,861                                                            |       |
| Robert I. Newton   |       | 07/31/2008      |       | 20,000                                                                                        | (1)        | 8.92                                                                    |       | 116,658                                                           |       |
|               |       | 11/07/2008      |       | 30,000                                                                                        | (2)        | 4.01                                                                    |       | 77,837                                                            |       |
|                    |            |                 |            |                                                                                               |            |                                                                         |            |                                                                   |            |  |  |

 

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| (1) | These options vest  quarterly in equal installments over four years, with full vesting on  July 31, 2012, and have a term of ten years.                                                                                                                                                                                                                                                                         |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | These options vest  quarterly in equal installments over four years, with full vesting on  November 7, 2012, and have a term of ten years.                                                                                                                                                                                                                                                                      |
| (3) | The grant date fair values  of the stock options granted were computed in accordance with SFAS  No. 123R. For a detailed discussion of the assumptions made in the  valuation of stock option awards, please see Notes 2 and 3 of our Notes  to the Consolidated Financial Statements included in our original filing of  this Annual Report on Form 10-K for the year ended December 31,  2008. |

 

10

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**Outstanding Equity Awards at Fiscal Year-End(2008)**

 

The following table sets forth information regarding unexercisedoptions for each of our named executive officers outstanding as of December 31,2008.

 
| ** **         | ** ** | **Option Awards**                                                                 | ** ** |
|--------------------|------------|----------------------------------------------------------------------------------------|------------|
| **Name**           | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)  Unexercisable** | ** ** | **Option  Exercise  Price ($)** | ** ** | **Option  Expiration  Date** | ** ** |
| Frank F. Khulusi   |       | 50,000                                                                                 |       | — |   | $ | 2.84 |   | 06/11/2009 |   |
|               |       | 100,000                                                                                |       | — |   | 6.23 |   | 10/28/2014 |   |
|               |       | 22,500                                                                                 |       | 67,500 | (1) | 10.50 |   | 12/14/2017 |   |
|               |       | 5,625                                                                                  |       | 84,375 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | —                                                                                 |       | 65,000 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Brandon H. LaVerne |       | 7,000                                                                                  |       | — |   | 5.02 |   | 11/21/2013 |   |
|               |       | 18,000                                                                                 |       | 2,000 | (4) | 6.36 |   | 05/24/2014 |   |
|               |       | 7,000                                                                                  |       | — |   | 4.49 |   | 06/29/2015 |   |
|               |       | 4,688                                                                                  |       | 10,312 | (5) | 12.27 |   | 08/31/2017 |   |
|               |       | 2,188                                                                                  |       | 32,812 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | —                                                                                 |       | 30,000 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Kristin M. Rogers  |       | 17,500                                                                                 |       | — |   | 3.23 |   | 01/20/2010 |   |
|               |       | 40,000                                                                                 |       | — |   | 0.60 |   | 04/17/2011 |   |
|               |       | 27,500                                                                                 |       | — |   | 0.90 |   | 08/16/2012 |   |
|               |       | 40,000                                                                                 |       | — |   | 6.23 |   | 10/28/2014 |   |
|               |       | 50,000                                                                                 |       | — |   | 4.41 |   | 06/28/2015 |   |
|               |       | 6,250                                                                                  |       | 13,750 | (5) | 12.27 |   | 08/31/2017 |   |
|               |       | 1,250                                                                                  |       | 18,750 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | —                                                                                 |       | 30,000 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Daniel J. DeVries  |       | 35,000                                                                                 | (6)        | — |   | 2.84 |   | 06/11/2009 |   |
|               |       | 42,606                                                                                 |       | — |   | 0.60 |   | 04/17/2011 |   |
|               |       | 22,737                                                                                 |       | — |   | 0.90 |   | 08/15/2012 |   |
|               |       | 25,000                                                                                 |       | — |   | 6.23 |   | 10/28/2014 |   |
|               |       | 20,000                                                                                 |       | — |   | 4.41 |   | 06/28/2015 |   |
|               |       | 6,250                                                                                  |       | 13,750 | (5) | 12.27 |   | 08/31/2017 |   |
|               |       | 938                                                                                    |       | 14,062 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | —                                                                                 |       | 20,000 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Robert I. Newton   |       | 50,000                                                                                 |       | — |   | 6.92 |   | 06/08/2014 |   |
|               |       | 50,000                                                                                 |       | — |   | 4.41 |   | 06/28/2015 |   |
|               |       | 6,250                                                                                  |       | 13,750 | (5) | 12.27 |   | 08/31/2017 |   |
|               |       | 1,250                                                                                  |       | 18,750 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | —                                                                                 |       | 30,000 | (3) | 4.01 |   | 11/07/2018 |   |
|                    |            |                                                                                        |            |  |  |  |  |  |  |  |

 

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| (1) | These  options were granted on December 14, 2007 and vest quarterly in equal  installments over four years, with full vesting on December 14, 2011. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | These options were granted on July 31, 2008 and vest quarterly in equal installments over four years, with full vesting on July 31, 2012.           |
| (3) | These options were granted on November 7, 2008 and vest quarterly in equal installments over four years, with full vesting on November 7, 2012.     |
| (4) | These  options were granted on May 24, 2004 and vest quarterly in equal  installments over five years, with full vesting on May 24, 2009.           |
| (5) | These  options were granted on August 31, 2007 and vest quarterly in equal  installments over four years, with full vesting on August 31, 2011.     |
| (6) | This  includes options to purchase 17,357 shares of our common stock that have  been transferred pursuant to a divorce settlement.                       |

 

11

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**OptionExercises and Stock Vested (2008)**

 

The following table provides information regarding each exercise ofstock option awards for each of our named executive officers during the fiscalyear ended December 31, 2008.

 
| ** **         | ** ** | **Option Awards**                                                  | ** ** |
|--------------------|------------|-------------------------------------------------------------------------|------------|
| **Name**           | ** ** | **Number of Shares  Acquired on Exercise (#)** | ** ** | **Value Realized  on Exercise  ($)(1)** | ** ** |
| Frank F. Khulusi   |       | —                                                                  |       | — |   |
| Brandon H. LaVerne |       | —                                                                  |       | — |   |
| Kristin M. Rogers  |       | 17,000                                                                  |       | $ | 170,510 |   |
| Daniel J. DeVries  |       | 15,086                                                                  |       | 190,274 |   |
| Robert I. Newton   |       | —                                                                  |       | — |   |
|                    |            |                                                                         |            |  |  |  |

 

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| (1) | Value  realized was computed by calculating the difference between the market price  of our stock at the exercise date and the exercise prices of the options  exercised. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Potential Payments Upon Termination or Changein Control (2008)**

 

Provisions of our employment and change of control arrangements withthe named executive officers and our equity incentive plan or individual awardagreements thereunder provide for certain payments to our named executiveofficers at, following or in connection with a termination of their employmentor a change of control of PC Mall. See “Employment Agreements and Severance andChange-in-Control Arrangements” in our Compensation Discussion and Analysissection above for a discussion of the specific circumstances that would triggerpayments under the employment agreements with our named executive officers

 

The agreements pursuant to which we granted stock options to Mr. Khulusi,Mr. LaVerne and Mr. Newton provide for full acceleration of vestingof their unvested options in the event of a change of control of our company.The agreements pursuant to which each of our other named executive officersreceived stock options provide that, in the event of a change of control, aportion of the unvested options then outstanding will become fully vested andexercisable if:

 

·                  the option isnot assumed or replaced (by an option or comparable cash incentive) by thesuccessor entity as part of such transaction; or

 

·                  the option isassumed or replaced, but such officer’s employment is terminated by thesuccessor entity without cause or by the executive for “good reason” withintwelve (12) months of the change of control.

 

Under our stock incentive plan, a change ofcontrol is deemed to occur upon:

 

·                  the direct orindirect acquisition by any person or related group of persons of more than 50%of the total voting power our outstanding stock;

 

·                  a change in thecomposition of our board over a period of 36 months or less such that amajority of our continuing directors cease to be members of our board;

 

·                  a merger orconsolidation in which we are not the surviving entity or in which we surviveas an entity but in which more than 50% of the voting power of our outstandingsecurities are transferred to persons different from those who held suchsecurities immediately prior to such merger; or

 

·                  the sale,transfer or other disposition of all or substantially all of our assets or ourliquidation or dissolution.

 

The table below sets forth the estimated payments that would be made toeach of our named executive officers upon voluntary termination, involuntarytermination, a change of control, and death or permanent disability. The actualamounts to be paid out can only be determined at the time of such namedexecutive officer’s separation from PC Mall. The information set forth in thetable assumes, as necessary:

 

·                  The terminationand/or the qualified change in control event occurred on December 31, 2008(the last business day of our last completed fiscal year);

 

·                  The price pershare of our common stock on the date of termination is $4.01 (the closingmarket price of our common stock on the Nasdaq Global Market on December 31,2008); and

 

·                  With respect tounvested stock options, the options are not assumed or replaced as describedabove.

 

12

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As of December, 31, 2008, each of our executive officers listed in thetable below had no unvested stock options that were in-the-money.

 
| **Name**             | ** ** | **Voluntary  Termination** | ** ** | **Death or  Permanent  Disability** | ** ** | **Change of  Control** | ** ** | **Involuntary  Termination** | ** ** |
|----------------------|------------|----------------------------|------------|------------------------------------------|------------|-----------------------------|------------|------------------------------|------------|
| Frank F. Khulusi     |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement |       | $                          | 2,300,623  | (1)(2)                                   | See        | (7)                         | $          | 2,300,623                    | (2)(3)     | $ | 2,300,623 | (2)(4) |
|                 |       |                       |       |                                     |       |                        |       |                         |       |
| Brandon H. LaVerne   |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement |       | —                     |       | —                                   |       | —                      |       | $                            | 139,707    | (4)(5) |
|                 |       |                       |       |                                     |       |                        |       |                         |       |
| Kristin M. Rogers    |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement |       | —                     |       | —                                   |       | —                      |       | $                            | 173,581    | (4)(6) |
|                 |       |                       |       |                                     |       |                        |       |                         |       |
| Daniel J. DeVries    |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement |       | —                     |       | —                                   |       | —                      |       | $                            | 141,410    | (4)(5) |
|                 |       |                       |       |                                     |       |                        |       |                         |       |
| Robert I. Newton     |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement |       | —                     |       | —                                   |       | —                      |       | $                            | 152,207    | (4)(5) |
|                      |            |                            |            |                                          |            |                             |            |                              |            |  |  |  |

 

----

| (1) | This  severance benefit is provided pursuant to Mr. Khulusi’s employment  agreement if his employment with us is terminated by Mr. Khulusi for  “good reason,” as defined in his employment agreement, including if we choose  to not renew the agreement.                                                                                                                                                                                                                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Estimated  severance payment is to be made in a single lump sum payment upon the termination  or change of control, as applicable subject to compliance with  Section 409A of the Internal Revenue Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (3) | Pursuant to  the terms of his employment agreement, to the extent the severance payment  payable to Mr. Khulusi in the event of a change of control, either alone  or together with other payments he has the right to receive from us, would  not be deductible (in whole or in part) by us as a result of the payment  constituting a “parachute payment” under Section 280G of the Internal  Revenue Code, the severance payment will be reduced to the maximum deductible  amount under the Code.                                                                                                                                                       |
| (4) | The amount  indicated reflects payments upon a termination not for cause. In the event of  the individual’s termination for cause, no payment would be payable, except  that pursuant to Mr. Khulusi’s employment agreement, if he is terminated  for cause (which may occur upon 30 days’ advance written notice), he is  to be paid his salary through the end of the notice period.                                                                                                                                                                                                                                                                 |
| (5) | Severance  payments are to be made in equal installments over a period of six months  following the date of termination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (6) | Includes  $3,874 of severance benefit relating to costs to continue health insurance  benefits for Ms. Rogers and her family. Payments are to be made in equal  bi-monthly installments over the six month severance period following the  date of termination. All severance payment obligations, however, shall cease  as of a date on which Ms. Rogers obtains other employment during the six  month severance period.                                                                                                                                                                                                                                            |
| (7) | Upon  executive’s death, we are required to pay to executive’s beneficiaries or  estate the compensation to which he is entitled through the end of the month  in which death occurs. Upon executive’s disability, which in the sole opinion  of the Board, if executive is not able to properly perform his duties for  more than 270 days in the aggregate or 180 consecutive days in any  twelve month period, then executive’s employment shall terminate on the last  day of the month in which the Board determines executive to be disabled and be  entitled to executive’s compensation through executive’s last day of  employment. |

 

13

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**Director Compensation (2008)**

 

The following table provides information regarding the compensationearned for services performed for us as a director by each member of our boardof directors, other than directors who are also named executive officers,during the fiscal year ended December 31, 2008.

 
| **Name**         | ** ** | **Fees Earned or  Paid in Cash ($)** | ** ** | **Stock  Awards  ($)(1)(2)** | ** ** | **Option  Awards  ($)(3)(4)** | ** ** | **All Other  Compensation ($)** | ** ** | **Total ($)** | ** ** |
|------------------|------------|---------------------------------------------------------------|------------|------------------------------|------------|-------------------------------|------------|-------------------------------------------|------------|--------------------|------------|
| Thomas A. Maloof |       | $                                                             | 57,500     |                         | $          | 36,528                        |       | —                                    |       | —             |       | $ | 94,028 |   |
| Ronald B. Reck   |       | 56,000                                                        |       | 36,528                       |       | —                        |       | $                                         | 5,687      |               | 98,215     |   |
| Paul C. Heeschen |       | 52,000                                                        |       | 36,528                       |       | $                             | 10,977     |                                      | —     |               | 99,505     |   |
|                  |            |                                                               |            |                              |            |                               |            |                                           |            |                    |            |  |  |  |  |  |

 

----

| (1) | Represents  the dollar amount associated with the director’s stock award grant that is  recognized as stock-based compensation expense in the 2008 fiscal year for  financial statement reporting purposes in accordance with SFAS 123R, but  excluding any estimate of future forfeitures related to service-based vesting  conditions and reflecting the effect of any actual forfeitures. For a  detailed discussion of the assumptions made in the valuation of stock awards,  please see Notes 2 and 3 of our Notes to the Consolidated Financial Statements  included in our original filing of this Annual Report on Form 10-K for  the year ended December 31, 2008.     |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | As of  December 31, 2008, each of our directors had the following aggregate  number of unvested restricted stock awards outstanding: Mr. Maloof —  3,000, Mr. Reck — 3,000 and Mr. Heeschen — 3,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (3) | Represents  the dollar amount associated with the director’s option grant that is  recognized as stock-based compensation expense in the 2008 fiscal year for  financial statement reporting purposes in accordance with SFAS 123R, ,  but excluding any estimate of future forfeitures related to service-based  vesting conditions and reflecting the effect of any actual forfeitures. For a  detailed discussion of the assumptions made in the valuation of stock option  awards, please see Notes 2 and 3 of our Notes to the Consolidated  Financial Statements included in our original filing of this Annual Report on  Form 10-K for the year ended December 31, 2008. |
| (4) | As of  December 31, 2008, each of our directors had the following aggregate  number of option awards outstanding: Mr. Maloof — 56,000,  Mr. Reck — 10,000 and Mr. Heeschen - 20,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

During 2008, we paid each director who is not employed by us or any ofour affiliates a quarterly retainer of $7,000, plus $2,500 for each regularboard meeting attended in person or telephonically, $1,000 for each specialboard meeting attended in person or telephonically, $1,000 for each committeemeeting attended in person, and $1,000 for each committee meeting attendedtelephonically. We also paid the chairperson of the Audit Committee of ourBoard of Directors an additional quarterly retainer of $3,125 for serving insuch capacity. We also paid the chairperson of the Compensation Committee ofour Board of Directors an additional quarterly retainer of $1,250 for servingin such capacity. Directors who are employed by us or any of our affiliates arenot paid any additional compensation for their service on our board ofdirectors. We reimburse each of our directors for reasonable out-of-pocketexpenses that they incur in connection with attending board or committeemeetings. We have entered into indemnification agreements, a form of which hasbeen attached as an exhibit to our original filing of this Annual Report on Form 10-K,with each of our directors.

 

Our directors are also eligible to participate in our 1994 Plan, whichis administered by our Compensation Committee under authority delegated by ourboard of directors. The terms and conditions of option and stock bonus grantsto our non-employee directors under our 1994 Plan are determined in thediscretion of our Compensation Committee, and must be consistent with the termsof the 1994 Plan, which is filed as an exhibit to our original filing of thisAnnual Report on Form 10-K.

 

On July 31, 2008, our Compensation Committee approved and granted,under the 1994 Plan, the award of 4,000 shares of restricted stock to each ofour non-employee members of the board for a total award of 12,000 shares ofrestricted stock. The restricted stock awards each vest quarterly in equalamounts over a one year period from the date of grant. We valued the restrictedstock award at fair value in accordance with SFAS 123R as of the grant date.See footnotes 1 and 2 in the table above for more information on restrictedstock awards.

 

**COMPENSATIONCOMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**

 

Mr. Reck and Mr. Heeschen served as members of ourCompensation Committee during the fiscal year ended December 31, 2008.There are no Compensation Committee interlocks between us and other entitiesinvolving our executive officers and board members who serve as executiveofficers of such companies.

 

14

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**COMPENSATIONCOMMITTEE REPORT**

 

The Compensation Committee of the Board has reviewed and discussed theCompensation Discussion and Analysis with management. Based on its review anddiscussions with management, the Committee recommended to our Board that theCompensation Discussion and Analysis be included in our Form 10-K for theyear ended December 31, 2008 and our Proxy Statement for the 2009 AnnualMeeting of Stockholders.

 

The Compensation Committee

 

Ronald B. Reck(Chair)

Paul C.Heeschen

 
| **ITEM 12.** | **SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT****AND RELATED STOCKHOLDER MATTERS** |
|-------------------|-------------------------------------------------------------------------------------------------------|

 

The following table sets forth certain information regarding thebeneficial ownership of our common stock as of April 23, 2009 by: (i) eachof the named executive officers; (ii) each director; (iii) all of ourcurrent directors and executive officers as a group; and (iv) each personknown to us to be the beneficial owner of more than 5% of the outstandingshares of our common stock. Percentage ownership is based on an aggregate of12,253,426 shares of our common stock outstanding on April 23, 2009.The table is based upon information provided by officers, directors andprincipal stockholders, as well as upon information contained in Schedules 13Dand 13G filed with the SEC. Except as otherwise indicated, and subject toapplicable community property laws, the persons named in the table have solevoting and investment power with respect to all of the shares of our commonstock beneficially owned by them. Unless otherwise indicated, the address foreach person is: c/o PC Mall, Inc., 2555 W. 190th Street,Suite 201, Torrance, California 90504.

 
| **Name of Beneficial Owner**                               | ** ** | **Number of Shares  Beneficially Owned** | ** ** | **Percentage of  Shares Beneficially  Owned** | ** ** |
|---------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|---------------------------------------------------------|------------|
| *5% or Greater Stockholders:*                                             | * *   | * *                                                | * *   | * *                                                | * *   |
| Jonathan L. Kimerling(1)                                                  |       | 1,000,100                                               |       | 8.2                                                     | %          |
| NorthPointe Capital, LLC(2)                                               |       | 804,987                                                 |       | 6.6                                                     |       |
| Amre A. Youness (3)                                                       |       | 622,000                                                 |       | 5.1                                                     |       |
|                                                                      |       |                                                    |       |                                                    |       |
| *Directors and Executive Officers:*                                       | * *   | * *                                                | * *   | * *                                                | * *   |
| Frank F. Khulusi                                                          |       | 2,254,056                                               | (4)        | 18.1                                                    |       |
| Brandon H. LaVerne                                                        |       | 51,076                                                  | (5)        | *                                                       |       |
| Kristin M. Rogers                                                         |       | 191,250                                                 | (6)        | 1.5                                                     |       |
| Daniel J. DeVries                                                         |       | 150,149                                                 | (7)        | 1.2                                                     |       |
| Robert I. Newton                                                          |       | 116,250                                                 | (8)        | *                                                       |       |
| Thomas A. Maloof                                                          |       | 63,000                                                  | (9)        | *                                                       |       |
| Ronald B. Reck                                                            |       | 42,000                                                  | (10)       | *                                                       |       |
| Paul C. Heeschen                                                          |       | 30,727                                                  | (11)       | *                                                       |       |
| All current directors and executive  officers as a group (9 persons) |       | 2,925,696                                               | (12)       | 22.4                                                    | %          |

 

----

| *   | Less than 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Based on  information contained in Schedule 13D/A filed on March 17, 2008 by  Jonathan L. Kimerling and Four Leaf Management, LLC, Jonathan L.  Kimerling has sole voting and dispositive power with respect to  1,000,100 shares of our common stock (includes all shares held by  Mr. Kimerling in an investment retirement account and shares held as  custodian on behalf of Joel Kimerling) and Four Leaf Management, LLC has sole  voting and dispositive power with respect to 960,100 shares of our  common stock. Mr. Kimerling is the sole managing member of Four Leaf  Management LLC. The address for Mr. Kimerling and Four Leaf Management  LLC is c/o Jonathan L. Kimerling, 2968 Cherokee Road, Birmingham,  Alabama 35223. |
| (2) | Based on  information contained in Schedule 13G filed on February 13, 2009 by  NorthPointe Capital, LLC (“NorthPointe”), a registered investment adviser.  The securities reported in this Schedule 13G by NorthPointe Capital are  beneficially owned by one or more open end investment companies or other  managed accounts which are advised by NorthPoint. NorthPoint has sole voting  power with respect to 373,226 shares and sole dispositive power with  respect to 804,987 shares of our common stock. The address for  NorthPoint is 101 W. Big Beaver, Suite 745, Troy, Michigan 48084.                                                                                                                                                    |
| (3) | The address for  Mr. Youness is 310 North Lake Avenue, Pasadena, California 91101.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

 

15

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| (4)  | Consists of  1,645,306 shares held by the Khulusi Family Revocable Trust dated  November 3, 1993, 400,000 shares held by Frank F. Khulusi, and  208,750 shares underlying options which are presently vested or will  vest within 60 days of April 23, 2009. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5)  | Includes  50,876 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                                  |
| (6)  | Consists of  191,250 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                              |
| (7)  | Includes  142,049 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                                 |
| (8)  | Consists of  116,250 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                              |
| (9)  | Includes of  56,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                               |
| (10) | Includes  10,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                                  |
| (11) | Includes  20,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 23, 2009.                                                                                                                                  |
| (12) | This figure  includes an aggregate of 822,363 shares issuable upon exercise of stock  options which are presently vested or will vest within 60 days of  April 23, 2009.                                                                                                    |

 

**EquityCompensation Plan Information**

 

The following table sets forth information about shares of our commonstock that may be issued upon exercise of options and warrants under all of ourequity compensation plans as of December 31, 2008:

 
| **Plan Category**                                  | ** ** | **Number of  Securities to be  Issued Upon  Exercise of  Outstanding  Options,Warrants  and Rights** | ** ** | **Weighted-Average  Exercise Price of  Outstanding  Options, Warrants  and Rights** | ** ** | **Number of  Securities  Remaining Available  for Future Issuance  Under Equity  Compensation Plans** | ** ** |
|---------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity Compensation Plans Approved by  Security Holders |       | 2,490,090                                                                                                                          |       | $                                                                                                       | 5.66       |                                                                                                                                | 1,177,510  | (1) |
|                                                         |            |                                                                                                                                    |            |                                                                                                         |            |                                                                                                                                     |            |  |

 

----

| (1) | Represents  shares available for issuance under our 1994 Stock Incentive Plan, as  amended, as of December 31, 2008. The 1994 Stock Incentive Plan, as  amended, contains an evergreen provision pursuant to which on January 1  of each year, the aggregate number of shares reserved for issuance under the  1994 Stock Incentive Plan, as amended, will increase by a number of shares  equal to 3% of the outstanding shares on December 31 of the preceding  year. On January 1, 2009, an additional 380,439 shares became  available under the plan pursuant to the evergreen provision. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**ITEM 13.  CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR****INDEPENDENCE**

 

**Review,Approval or Ratification of Transactions with Related Persons**

 

We have a written policy covering the review and approval oftransactions with related persons, which policy requires that we comply withthe Nasdaq continued listing standards. Our general counsel reviews andmonitors the terms and conditions of all related party transactions and anindependent committee of the board of directors approves all related partytransactions.

 

**CertainRelationships and Related Transactions**

 

We have entered into indemnification agreements with each of ourcurrent directors and executive officers that provide the maximum indemnityavailable to directors and officers under Section 145 of the DelawareGeneral Corporation Law and our amended and restated certificate ofincorporation, as well as certain procedural protections. We have also enteredinto transactions with certain of our directors and officers, as describedunder the section “Executive Compensation.”

 

Sam U. Khulusi, the brother of Frank F. Khulusi, was employed as aSenior Vice President of AF Services, LLC, a wholly-owned subsidiary of PCMall, in fiscal year 2008 and earned compensation in the amount of $212,782.Sam U. Khulusi did not earn any bonus during 2008. Sam U. Khulusi is eligibleto participate in our employee benefit plans that are generally available tosimilarly situated employees. Sam U. Khulusi was granted options to purchase5,000 shares of our common stock on November 7, 2008 at an exercise priceof $4.01. The options vest quarterly over a four year period from the grantdate.

 

16

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In February 2009, we entered into a Software License andMaintenance and Support Agreement with Eruces, Inc., a Delawarecorporation, pursuant to which Eruces licensed data security technology to ourcompany. Dr. Bassam Khulusi and Sam U. Khulusi, each of whom is a brotherof our Chairman and Chief Executive Officer Frank Khulusi, togetherbeneficially own a majority of the outstanding voting stock of Eruces. RonaldReck, a member of our Board of Directors and the Audit Committee and thechairman of our Compensation Committee, is a minority stockholder in Eruces.The Eruces technology licensed under the agreement is proprietary encryptionsoftware that was independently identified by our Director of Security as thebest solution for certain of our data security needs. The transactionscontemplated by the agreement were approved by the independent members of ourBoard of Directors and Audit Committee in accordance with our Audit CommitteeCharter and our policy for approval of related party transactions. Theagreement provides for a one-time license fee of $270,300 in consideration fora worldwide, non-exclusive, perpetual and irrevocable license to use thesoftware, a one-time $23,625 installation and integration fee and annualsupport fees in the initial amount of $40,545.

 

Simon M. Abuyounes, the brother-in-law of Frank F. Khulusi, wasemployed as the President of AF Services, LLC in fiscal year 2008 and earnedcompensation in the amount of $404,016, which includes quarterly bonusestotaling $103,415, and company matched 401(k) contribution totaling$2,239. Mr. Abuyounes is entitled to six months severance based on hisbase salary in the event his employment is terminated by us without cause. Mr. Abuyounesis also eligible to participate in our employee benefit plans that aregenerally available to similarly situated employees. Mr. Abuyounes wasgranted options to purchase 20,000 and 30,000 shares of our common stock on July 31,2008 and November 7, 2008 at exercise prices of $8.92 and $4.01,respectively. The options vest quarterly over a four year period from therespective grant dates.

 

**DirectorIndependence**

 

Nasdaq listing standards require that a majority of the members of alisted company’s board of directors qualify as “independent,” as affirmativelydetermined by the board of directors. After review of all of the relevanttransactions or relationships between each director (and his family members)and us, our senior management and our independent registered public accountingfirm, our board of directors has affirmatively determined that each of Mr. Maloof,Mr. Heeschen and Mr. Reck is “independent” within the meaning of theapplicable Nasdaq listing standards.

 

Each member of our board of directors serving on our audit andcompensation committees is “independent” within the meaning of the applicableNasdaq listing standards. The board of directors does not have a nominatingcommittee. As permitted by the Nasdaq listing standards, in lieu of anominating committee, nominations for director candidates are presented to thefull board of directors for consideration and approval upon the recommendationof no less than a majority of the independent members of the board of directorsas defined in Rule 5605(a)(2) of the Nasdaq listing standards.

 

**ITEM 14.  PRINCIPAL ACCOUNTINGFEES AND SERVICES**

 

**AuditFees**

 

The aggregate fees PricewaterhouseCoopers LLP billed us in each of thelast two fiscal years for professional services it rendered to us for the auditof our annual financial statements included in our annual reports on Form 10-Kand review of our financial statements included in our quarterly reports on Form 10-Q,as well as for services that are normally provided by PricewaterhouseCoopersLLP in connection with statutory and regulatory filings or engagements forthose years, was $1,263,900 in 2008 and $1,032,900 in 2007. Fiscal year 2008and 2007 also include services rendered and billed relating to the audit of ourinternal control over financial reporting and the related attestation report onthe effectiveness of internal control over financial reporting as required by Section 404of the Sarbanes-Oxley Act of 2002.

 

**Audit-RelatedFees**

 

Theaggregate fees PricewaterhouseCoopers LLP billed us in fiscal year 2007 forassurance or related services regarding the performance of its audit orreview of our financial statements, other than those reported above under thecaption “Audit Fees” was $40,100. For fiscal 2007, the fees were primarilyrelated to services performed in connection with our acquisition of SARCOM.

 

17

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**TaxFees**

 

The aggregate fees PricewaterhouseCoopers LLP billed us in fiscal years2008 and 2007 for professional services rendered for tax compliance, tax adviceor tax planning was $40,598 and $71,254, respectively.

 

**AllOther Fees**

 

PricewaterhouseCoopers LLP did not provide us, or bill us for, anyproducts or services in the last two fiscal years, other than the servicesperformed in connection with the fees reported under the captions “Audit Fees,”“Audit-Related Fees” and “Tax Fees” above.

 

**AuditCommittee Pre-Approval Policy**

 

The audit committee of our board of directors has adopted a policyrequiring that all services provided to us by our approved independentregistered accounting firm be pre-approved by the audit committee. The policypre-approves specific types of services that the independent registeredaccounting firm may provide us if the types of services do not exceed specifiedcost limits. Any type of service that is not clearly described in the policy,as well as any type of described service that would exceed the pre-approvedcost limit set forth in the policy, must be explicitly approved by our auditcommittee prior to any engagement with respect to that type of service. Ouraudit committee reviews the pre-approval policy and establishes fee limitsannually, and may revise the list of pre-approved services from time to time.

 

Additionally, our audit committee delegated to its chairman theauthority to explicitly pre-approve engagements with our independent registeredaccounting firm, provided that any pre-approval decisions must be reported toour audit committee at its next scheduled meeting. If explicit pre-approval isrequired for any service, our Chief Financial Officer and our independentregistered accounting firm must submit a joint request to the audit committee,or its authorized delegate, describing in detail the specific services proposedand the anticipated costs of those services, as well as a statement as towhether and why, in their view, providing those services will be consistentwith the SEC’s rules regarding auditor independence.

 

**PART IV**

 

**ITEM 15.  EXHIBITS ANDFINANCIAL STATEMENT SCHEDULES**

 

(a)          Thefollowing documents are filed as part of this report:

 

(1)          Financial Statements — See Part II,Item 8 — Financial Statements of our original filing of this Form 10-K.

 

(2)          Financial Statement Schedule II —Valuation and Qualifying Accounts — See Part IV, Item 15 — Exhibitsand Financial Statement Schedules of our original filing of this Form 10-K.

 

(3)          Exhibits — The following exhibits arefiled or incorporated herein by reference as part of this report:

 
| **Exhibit   Number** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.1                       |       | Agreement and Plan of  Merger, dated as of August 17, 2007, by and among PC Mall, Inc.,  Mall Acquisition 2, Inc., Sarcom, Inc., Zohar CDO 2003-1, Limited,  Zohar II 2005-1, Limited, Charles E. Sweet, Robert F. Angart &  Company, John R. Strauss, Daniel A. Schneider and Howard Schapiro  (incorporated herein by reference to Exhibit 2.1 to the Current Report  on Form 8-K of PC Mall, Inc. (File no. 0-25790) filed with the  Securities and Exchange Commission (the “Commission”) on September 18,  2007) |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 3.1                       |       | Amended and Restated  Certificate of Incorporation of PC Mall, Inc. (incorporated herein by  reference to Exhibit 3.1(C) to the Quarterly Report on Form 10-Q  of PC Mall, Inc. for the quarter ended September 30, 2003 (File  No. 0-25790) filed with the Commission on November 14, 2002)                                                                                                                                                                                                                                             |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 3.2                       |       | Amended and Restated  Bylaws of PC Mall, Inc. (incorporated herein by reference to  Exhibit 3.2 to the Annual Report on Form 10-K of PC Mall, Inc.  for the year ended December 31, 2000 (File No. 0-25790) filed with  the Commission on April 2, 2001 (the “2000 Form 10-K”))                                                                                                                                                                                                                                                |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.1*                     |       | Amended and Restated 1994  Stock Incentive Plan (amended as of June 19, 2002) (incorporated herein  by reference to Annex A to the Definitive Proxy Statement of PC  Mall, Inc. (File No. 0-25790) filed with the Commission on  June 24, 2002)                                                                                                                                                                                                                                                                                                              |

 

18

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| **Exhibit   Number** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.2*                     |       | Employment Agreement,  dated January 1, 1995, between Creative Computers, Inc. and Frank  F. Khulusi (incorporated herein by reference to the Registration Statement on  Form S-1 of PC Mall, Inc. (File No. 33-89572), declared  effective on April 4, 1995 (the “1995 Form S-1”))                                                                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.3*                     |       | Amendment to Employment  Agreement made and entered into as of December 28, 2005, by and between  PC Mall, Inc. and Frank F. Khulusi (incorporated herein by reference to  Exhibit 10.32 to the Annual Report on Form 10-K of PC Mall, Inc.  for the year ended December 31, 2005 (File No. 0-25790) filed with  the Commission on March 31, 2006 (the “December 31, 2005  Form 10-K)) |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.4*                     |       | Second Amendment to  Employment Agreement made and entered into as of December 28, 2005, by  and between PC Mall, Inc. and Frank F. Khulusi (incorporated herein by  reference to Exhibit 10.33 to the December 31, 2005 Form 10-K)                                                                                                                                                                                  |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.5*                     |       | Employment Agreement,  dated January 20, 2000, between PC Mall, Inc. and Kristin M. Rogers  (incorporated herein by reference to Exhibit 10.45 to the Annual Report  on Form 10-K of PC Mall, Inc., for the year ended December 31,  2001 (File No. 0-25790) filed with the Commission on April 1, 2002)                                                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.6*                     |       | Employment Agreement,  dated January 1, 1994, between Creative Computers, Inc. and Daniel  J. DeVries (incorporated herein by reference to the 1995 Form S-1)                                                                                                                                                                                                                                                                  |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.7*                     |       | Severance Agreement, dated  January 31, 2006, between PC Mall Inc. and Daniel J. DeVries  (incorporated herein by reference to Exhibit 10.1 to the Current Report  on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the  Commission on February 3, 2006)                                                                                                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.8*                     |       | Employment Agreement,  dated June 8, 2004, between PC Mall, Inc. and Rob Newton  (incorporated herein by reference to Exhibit 10.54 to the Quarterly  Report on Form 10-Q of PC Mall, Inc. for the quarter ended  June 30, 2004 (File No. 0-25790) filed with the Commission on  August 11, 2004 (the “June 30, 2004 Form 10-Q”))                                                 |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.9*                     |       | Amendment to Employment  Agreement, dated March 22, 2005, between PC Mall, Inc. and Rob Newton  (incorporated herein by reference to Exhibit 10.2 to the Current Report  on form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the  commission on March 25, 2005)                                                                                                                                          |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.10*                    |       | Severance Agreement  between AF Services, LLC and Brandon LaVerne (incorporated herein by  reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of  PC Mall, Inc. for the quarter ended September 30, 2007 (File  No. 0-25790) filed with the Commission on November 14, 2007 (the  “September 30, 2007 Form 10-Q”))                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11*                    |       | Form of Executive  Non-Qualified Stock Option Agreement (full acceleration upon change in  control) (incorporated herein by reference to Exhibit 10.61 to the  Quarterly Report on Form 10-Q of PC Mall, Inc. for the quarter  ended September 30, 2004 (File No. 0-25790) filed with the  Commission on November 15, 2004 (the “September 30, 2004  Form 10-Q”))                      |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12*                    |       | Form of Executive  Non-Qualified Stock Option Agreement (partial acceleration upon change in  control) (incorporated herein by reference to Exhibit 10.62 to the  September 30, 2004 Form 10-Q)                                                                                                                                                                                                                           |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.13*                    |       | Directors’ Non-Qualified  Stock Option Plan, amended and restated as of May 18, 1999 (incorporated  herein by reference to Exhibit 10.2 to the Quarterly Report on  Form 10-Q of PC Mall, Inc. for the quarter ended June 30, 1999  (File No. 0-25790) filed with the Commission on August 16, 1999)                                                                                                  |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14*                    |       | Form of  Indemnification Agreement between PC Mall, Inc. and each of its  directors and executive officers (incorporated herein by reference to  Exhibit 10.48 to the Annual Report on Form 10-K of PC  Mall, Inc. for the year ended December 31, 2002 (File  No. 0-25790) filed with the Commission on March 31, 2003)                                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.15*                    |       | Form of Director  Restricted Stock Bonus Award Agreement (incorporated herein by reference to  Exhibit 10.3 to the September 30, 2007 Form 10-Q)                                                                                                                                                                                                                                                                          |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.16                     |       | Master Separation and  Distribution Agreement, dated September 1, 2004, between PC  Mall, Inc. and eCOST.com, Inc. (incorporated herein by reference to  Exhibit 10.56 to the Current Report on Form 8-K of PC  Mall, Inc. (File No. 0-25790) filed with the Commission on  September 8, 2004 (the “September 8, 2004 Form 8-K”))                                                 |

 

19

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| **Exhibit   Number** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.17                     |       | Tax Allocation and  Indemnification Agreement, dated September 1, 2004, between PC  Mall, Inc. and eCOST.com, Inc. (incorporated herein by reference to  Exhibit 10.57 to the September 8, 2004 Form 8-K)                                                                                                                                                                                                                                         |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.18                     |       | Employee Benefit Matters  Agreement, dated September 1, 2004, between PC Mall, Inc. and  eCOST.com, Inc. (incorporated herein by reference to Exhibit 10.58  to the September 8, 2004 Form 8-K)                                                                                                                                                                                                                                                   |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.19                     |       | Office Lease by and  between St. Paul Properties, Inc., as Landlord, and PC Mall, Inc.,  as Tenant (incorporated herein by reference to Exhibit 10.1 to the  Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790)  filed with the Commission on June 21, 2007)                                                                                                                                                                     |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.20                     |       | Lease Agreement, dated  September 1, 2003, between PC Mall, Inc. and Anderson Tully Company  for the premises located at 4715 E. Shelby Drive, Memphis, TN (incorporated  herein by reference to Exhibit 10.63 to the Annual Report on  Form 10-K of PC Mall, Inc. for the year ended December 31,  2004 (File No. 0-25790) filed with the Commission on March 31, 2005  (the “December 31, 2004 Form 10-K”))       |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.21                     |       | Renewal Letter for lease  of property in Memphis, Tennessee, entered into on October 2, 2006  (incorporated herein by reference to Exhibit 10.1 to the Current Report  on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the  Commission on October 6, 2006)                                                                                                                                                                             |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.22                     |       | Lease Agreement, dated  June 11, 2003, among PC Mall, Inc., PC Mall Canada, Inc. and  Canaprev, Inc. for the premises located at 1100, University, 2nd Floor,  Montreal (Quebec) Canada (incorporated herein by reference to  Exhibit 10.64 to the December 31, 2004 Form 10-K)                                                                                                                                                              |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.23                     |       | Addendum to Lease  Agreement, dated January 26, 2004, between PC Mall, Inc., PC Mall  Canada, Inc. and Canaprev, Inc. for premises located at 1100  University, Montreal, Quebec, Canada, dated January 26, 2004  (incorporated herein by reference to Exhibit 10.70 to the  December 31, 2004 Form 10-K)                                                                                                                               |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.24                     |       | Lease Agreement, dated as  of July 1, 2001, by and between Sarcom Properties, Inc. and Sarcom  Desktop Solutions, Inc., as amended as of December 1, 2002 and as  of March 22, 2004 (incorporated herein by reference to Exhibit 10.8  to the September 30, 2007 Form 10-Q)                                                                                                                                                             |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.25                     |       | Addendum No. 2, by  and between Complexe Rue Universite S.E.C., PC Mall Canada, Inc. and PC  Mall, Inc., dated January 10, 2008 (incorporated herein by  reference to Exhibit 10.1 to the Current Report on Form 8-K of PC  Mall, Inc. (File No. 0-25790) filed with the Commission on  January 15, 2008)                                                                                                                          |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.26                     |       | Amended and Restated Loan  and Security Agreement, dated as of August 1, 2005, by and among PC  Mall, Inc., certain subsidiaries of PC Mall, Inc., Wachovia Capital  Finance Corporation (Western) and certain other financial institutions  (incorporated herein by reference to Exhibit 10.1 to the Current Report  on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the  Commission on September 8, 2005)                  |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.27                     |       | Second Amendment to  Amended and Restated Loan and Security Agreement, dated as of June 11,  2007, by and among the Registrant, certain subsidiaries of the Registrant,  Wachovia Capital Finance Corporation (Western) and certain other financial  institutions (incorporated herein by reference to Exhibit 10.1 to the  Current Report on Form 8-K of PC Mall, Inc. (File No. 0-25790)  filed with the Commission on June 15, 2007)           |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.28                     |       | Third Amendment to Amended  and Restated Loan and Security Agreement, dated as of September 17,  2007, by and among PC Mall, Inc., certain subsidiaries of PC  Mall, Inc., Wachovia Capital Finance Corporation (Western) and certain  other financial institutions (incorporated by reference to Exhibit 10.1  to the Current Report on Form 8-K of PC Mall, Inc. (File  No. 0-25790) filed with the Commission on September 18, 2007) |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.29                     |       | Fourth Amendment to  Amended and Restated Loan and Security Agreement, dated as of November 5,  2007, by and among PC Mall, Inc, certain of its subsidiaries, Wachovia  Capital Finance Corporation (Western) and certain other financial  institutions (incorporated by reference to Exhibit 10.1 to the Current  Report on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed  with the Commission on November 6, 2007)                         |

 

20

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| **Exhibit   Number** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.30                     |       | Asset Purchase Agreement,  dated as of September 7, 2006, by and among a wholly-owned subsidiary of  PC Mall Gov, Inc. GMRI and the shareholders of GMRI (incorporated herein  by reference to Exhibit 10.1 to the Current Report on Form 8-K of  PC Mall, Inc. (File No. 0-25790) filed with the Commission on  September 12, 2006)                                                                                                    |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.31                     |       | Joint Stipulation of  Settlement and Release made and entered into by and between Plaintiff Nicole  Atkins, Class Representative and Defendants PC Mall, Inc. and PC  Mall Sales, Inc. (incorporated herein by reference to Exhibit 10.1  to the Quarterly Report on Form 10-Q of PC Mall, Inc. (File  No. 0-25790) for the period ended March 31, 2007 filed with the  Commission on May 15, 2007)                           |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.32                     |       | Registration Rights  Agreement, dated as of September 17, 2007, by and among PC  Mall, Inc., Zohar CDO 2003-1, Limited, Zohar II 2005-1, Limited, Charles  E. Sweet, Robert F. Angart & Company, John R. Strauss, Daniel A.  Schneider and Howard Schapiro (incorporated by reference to Exhibit 10.2  to the Current Report on Form 8-K of PC Mall, Inc. (File  No. 0-25790) filed with the Commission on September 18, 2007) |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.33*                    |       | Summary of Executive Bonus  Plan (incorporated herein by reference to Exhibit 10.2 to the Quarterly  Report on Form 10-Q of PC Mall, Inc. (File No. 0-25790) for  the period ended June 30, 2008 filed with the Commission on August 5,  2008)                                                                                                                                                                                               |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.34*†              |       | Summary of Executive  Salary and Bonus Arrangements                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.35*†              |       | Summary of Director  Compensation Arrangements                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.36*                    |       | Employment Agreement, by  and between PC Mall, Inc. and Joseph B. Hayek, dated March 17, 2008  (incorporated herein by reference to Exhibit 10.1 to the Current Report  on Form 8-K of PC Mall, Inc. (File No. 0-25790) filed with the  Commission on March 19, 2008).                                                                                                                                                                  |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.37*†              |       | Amendment to Employment  Agreement made and entered into as of December 30, 2008, by and between  PC Mall, Inc. and Frank F. Khulusi.                                                                                                                                                                                                                                                                                                                            |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 21.1†                |       | Subsidiaries of PC  Mall, Inc. as of December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                           |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 23.1†                |       | Consent of  PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.1†                |       | Certification of the Chief  Executive Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a)                                                                                                                                                                                                                                                                                                                                                           |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.2†                |       | Certification of the Chief  Financial Officer of PC Mall, Inc. pursuant to Exchange Act  Rule 13a-14(a)                                                                                                                                                                                                                                                                                                                                                          |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.3                      |       | Certification of the Chief  Executive Officer of PC Mall, Inc. pursuant to Exchange Act  Rule 13a-14(a), required to be filed as an exhibit to this Amendment  No. 1                                                                                                                                                                                                                                                                                        |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.4                      |       | Certification of the Chief  Financial Officer of PC Mall, Inc. pursuant to Exchange Act  Rule 13a-14(a), required to be filed as an exhibit to this Amendment  No. 1                                                                                                                                                                                                                                                                                        |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 32.1†                |       | Certification of the Chief  Executive Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as  adopted by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                          |
|                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 32.2†                |       | Certification of the Chief  Financial Officer of PC Mall, Inc. pursuant to 18 U.S.C. 1350, as  adopted by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                          |

 

----

| *      | Management  contract, or compensatory plan or arrangement.                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| † | Previously  filed as an exhibit to the Registrant’s Form 10-K for the year ended  December 31, 2008 (File No. 0-25790) filed with the Commission  on March 16, 2009. |

 

* * *

 

21

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the Registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|                       | PC MALL,  INC. |
|----------------------------|----------------|
|                       | (Registrant)   |
|                       |           |
| Date:  April 30, 2009 | By:            | /s/  FRANK  F. KHULUSI |
|                       |           | Frank F.  Khulusi |
|                       |           | Chairman of  the Board, President and |
|                       |           | Chief  Executive Officer |

 

22

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**PC MALL, INC.**

** **

**EXHIBIT INDEX**

 
| **Exhibit Number** | ** ** | **Description**                                                                                                                                                                 |
|--------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |       |                                                                                                                                                                            |
| 31.3               |       | Certification of the Chief Executive Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a), required to be filed as exhibit to this Amendment No. 1   |
|               |       |                                                                                                                                                                            |
| 31.4               |       | Certification of the Chief Financial  Officer of PC Mall, Inc. pursuant to Exchange Act Rule 13a-14(a),  required to be filed as exhibit to this Amendment No. 1 |

 

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