**UNITEDSTATES********SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.20549**

 

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**Form 10-K/A**

**AmendmentNo. 1**

 

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**x****     ****ANNUAL REPORT PURSUANT TOSECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the fiscal year ended December 31, 2009**

 

**o****        ****TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

** **

**For the transition period from          to           **

 

**CommissionFile Number: 0-25790**

 

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**PCMALL, 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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Securities registered pursuant to Section 12(b) ofthe Act:

 

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

 

Securities registered pursuant to Section 12(g) ofthe 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 statements incorporatedby reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate bycheck mark whether the registrant is a large accelerated filer, an acceleratedfiler, a non-accelerated filer, or a smaller reporting company. See the definitionsof “large accelerated filer,” “accelerated filer” and “smaller reportingcompany” 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, 2009, the aggregate marketvalue of the Common Stock held by non-affiliates of the registrant wasapproximately $69.7 million, based upon the closing sales price of theregistrant’s Common Stock on such date, as reported on the Nasdaq GlobalMarket. Shares of Common Stock held by each executive officer, director andeach person owning more than 10% of the outstanding Common Stock of theregistrant have been excluded in that such persons may be deemed to beaffiliates of the registrant. This determination of affiliate status is notnecessarily a conclusive determination for other purposes.

 

As of April 22,2010, the registrant had 12,318,402 shares of common stock outstanding.

 

 

 

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**EXPLANATORY NOTE**

 

PC Mall, Inc. (“PCMall,” “we” or “us”) is filing this Amendment No. 1 to its Annual Reporton Form 10-K for the year ended December 31, 2009 filed with theSecurities and Exchange Commission on March 16, 2010 solely for thepurpose of providing certain information required by Part III of Form 10-Kand to reflect exhibits filed with this Amendment No. 1. Unless otherwiseexpressly stated, this Amendment No. 1 does not reflect events occurringafter the filing of the original Form 10-K, or modify or update in any waydisclosures 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                                                                          |       | 3          |
| Item 12.     |       | Security Ownership of  Certain Beneficial Owners and Management and Related Stockholder Matters |       | 18         |
| Item 13.     |       | Certain Relationships and  Related Transactions, and Director Independence                      |       | 19         |
| Item 14.     |       | Principal Accounting Fees  and Services                                                         |       | 21         |
| **PART IV**  | ** ** | ** **                                                                                      | ** ** | ** ** |
| Item 15.     |       | Exhibits and Financial  Statement Schedules                                                     |       | 21         |
| Signatures        |       |                                                                                            |       | 26         |

 

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**PC MALL, INC.**

 

**PART III**

 

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

 

**InformationRegarding Our Board of Directors**

 

Our board of directorscurrently consists of four directors. At each annual meeting of stockholders,directors are elected to hold office until our next annual meeting ofstockholders or until his successor is elected and qualified.

 

Our board seeks directorswith established strong professional reputations and experience in areasrelevant to the strategy and operations of our business, particularly theindustries, end-markets and growth segments that our company serves. Each ofour directors holds or has held senior executive positions in complexorganizations and has operating experience that meets this objective, asdescribed below. In these positions, they have also gained experience in coremanagement skills, such as strategic and financial planning, public companyfinancial reporting, compliance, risk management, executive compensation, humanresources and leadership development. A majority of our non-employee directorshas experience serving on boards of directors and board committees of otherpublic companies and, each of our directors has an understanding of corporategovernance practices and trends. The board also believes that each of ourdirectors has other key attributes that are important to an effective board:integrity, candor, analytical skills, the willingness to engage management andeach other in a constructive and collaborative fashion, diversity ofexperience, qualifications, skills and backgrounds, and the ability andcommitment to devote significant time and energy to service on the board andits committees. In addition to the above, our board of directors has alsoconsidered the specific experience described in the biographical details thatfollow in determining that such individuals should serve as a member of ourboard of directors.

 

Set forth below are the name, age and the positionsand offices held by each of our directors as of April 30, 2010, hisprincipal occupation, business experience and public company board serviceduring the past five years, and the experience, qualifications, attributes orskills that qualify such person to serve as a director of our company.

 
| **Name**                | ** ** | **Age** | ** ** | **Position**                                                  | ** ** | **Director  Since** |
|-------------------------|------------|---------|------------|---------------------------------------------------------------|------------|---------------------|
| Frank  F. Khulusi       |       | 43      |       | Chairman  of the Board, President and Chief Executive Officer |       | 1987                |
| Thomas  A. Maloof(2)    |       | 58      |       | Director                                                      |       | 1998                |
| Ronald  B. Reck(1)(2)   |       | 61      |       | Director                                                      |       | 1999                |
| Paul  C. Heeschen(1)(2) |       | 53      |       | Director                                                      |       | 2006                |

 

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(1)          Member of our compensationcommittee.

(2)          Member of our auditcommittee.

 

*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. From July 1999 to September 1999, Mr. Khulusiserved as President of Toytime, Inc., an online retailer of toys. In July 2000,a petition for involuntary bankruptcy was filed against Toytime under Chapter11 of the United States Bankruptcy Code, which was dismissed by a federalbankruptcy court in November 2000. Mr. Khulusi attended theUniversity of Southern California. Mr. Khulusi’s areas of relevantexperience, qualifications, attributes or skills include extensive knowledge ofthe IT direct marketing and solutions industries, over 20 years of experiencein leadership and growth of our company, extensive operations and financialexperience, and experience with public company corporate governance.

 

*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. (Nasdaq: ECST). Mr. Maloof also serves asa director for Farmer Brothers Coffee (Nasdaq: FARM) and The Ensign Group(Nasdaq: ENSG). Mr. Maloof’s areas of relevant experience, qualifications,attributes or skills include extensive knowledge of the IT direct marketing andsolutions industries; outside board experience with Farmer Brothers and The EnsignGroup (including service on the audit committees of both entities); publicaccounting and auditing experience; and public company corporate governance,finance and financial reporting experience.

 

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*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. Mr. Reck’s areas of relevantexperience, qualifications, attributes or skills include extensive knowledge ofthe IT direct marketing and solutions industries; extensive experience as aprivate investor; senior leadership roles with operations experience in complexpublic and private companies; and public company corporate governance andfinancial reporting experience.

 

*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. (Nasdaq: DDRX) since January 1996, was elected to serveas its chairman in February 2001 and was appointed as its executivechairman effective February 1, 2010. Since 1995, Mr. Heeschen hasbeen a principal of Heeschen & Associates, a private investment firm. Mr. Heeschen’sareas of relevant experience, qualifications, attributes or skills includeextensive knowledge of the IT direct marketing and solutions industries;extensive experience as a private investor; senior leadership roles withoperations experience in complex public and private companies; and publiccompany corporate governance, finance and financial reporting experience.

 

**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 separately designatedstanding audit committee established in accordance with the Securities ExchangeAct of 1934. The members of our audit committee are Thomas A. Maloof (Chair),Paul C. Heeschen and Ronald B. Reck. Our board of directors has determined thateach of the members of our audit committee is “independent” as that term isdefined in Rule 10A-3(b)(1) promulgated under the Exchange Act and isan “independent director” as defined in Rule 5605(a)(2) of the Nasdaqlisting standards. Our board of directors has determined that each of Mr. Maloofand Mr. Heeschen is an “audit committee financial expert” as that term isdefined by regulations of the Securities and Exchange Commission and that eachof them has accounting and related financial management expertise within themeaning of the applicable rules of Nasdaq.

 

**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, 2009, all Section 16(a) filingrequirements applicable to our officers, directors and ten percent stockholderswere complied with.

 

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**ITEM 11.  EXECUTIVECOMPENSATION**

 

**COMPENSATION DISCUSSION ANDANALYSIS**

 

**Executive Compensation 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 executive compensation to the creation ofstockholder value;

 

·         reward contributions of executive officers thatenhance our specific business goals; and

 

·         attract, retain and motivate high qualityindividuals.

 

Ourexecutive compensation programs have been designed and adopted by theCompensation Committee in an effort to implement the above principles. The keyelements of our executive compensation program include base salary, quarterlybonuses, stock incentive awards, health and welfare benefits, and otherperquisites. The discussion below describes each of the key elements of ourexecutive compensation for the fiscal year ended December 31, 2009.

 

**Executive Compensation Process**

 

Inestablishing compensation, our Compensation Committee, among other things:

 

·         reviews the performance of our executive officersand each of the components of their compensation;

 

·         evaluates the effectiveness of our overall executivecompensation program on a periodic basis; and

 

·         administers our stock and bonus plans and, withinthe terms of these plans, determines the terms and conditions of the awardsunder these plans.

 

Ourannual process of determining overall compensation for named executive officers(other than our Chief Executive Officer) begins with recommendations made byour Chief Executive Officer to our Compensation Committee. In making hisrecommendation, our Chief Executive Officer considers a number of factors,including the seniority of the individual, the functional role of the position,the level of the individual’s responsibility, the individual’s long-termcommitment to our company, the demand and scarcity of individuals with similarskills, knowledge and industry expertise, and his understandings and beliefs ofretention and motivational requirements for each such executive. Afterconsidering the input and recommendations of our Chief Executive Officer andthe input of the independent compensation consultant engaged by the Committee,our Compensation Committee makes the final determination of compensation forour named executive officers.

 

Inaddition, our Compensation Committee annually reviews and approves ourcorporate goals and objectives relative to our Chief Executive Officer’scompensation, evaluates his compensation in light of such goals and objectives,as well as the input of an independent compensation consultant, and sets theChief Executive Officer’s compensation based on this evaluation. While ourChief Executive Officer submits recommendations to the Compensation Committeeregarding his own proposed compensation levels, the Committee retains the soleauthority to determine the compensation of our Chief Executive Officer based onits evaluation of the factors described below under “Total Compensation forExecutive Officers.”

 

OurCompensation Committee uses its judgment and experience and works closely withour named executive officers to determine the appropriate mix of compensationfor each individual. Our Compensation Committee historically has not used tallysheets, internal pay equity studies, accumulated wealth analyses, equityretention policies, benchmarking or similar tools in assisting withcompensation determinations for our named executive officers. The Committeeuses its judgment and discretion in determining the amount of base salary forexecutive officers and does not target a particular benchmark in relation tosalary ranges at other companies. Instead, base salary is used to recognize the experience, skills, knowledgeand responsibilities required of our named executive officers, taking intoaccount competitive market compensation paid by other companies for similarpositions. The Compensation Committee believes that long-term performance isachieved through the use of stock-based awards and has historically awardedstock options to our named executive officers.

 

Beginningin April 2007, the Compensation Committee engaged Towers Watson (formerlyTowers Perrin), a nationally recognized compensation consulting firm, to advisethe Committee on our executive compensation programs and to conduct anindependent competitive assessment of our director and executive officercompensation in an effort to ensure that such compensation levels and 

 

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practices satisfy ourcompensation philosophies and principles and are established in part based uponconsideration of objective market compensation data. The object of TowersWatson’s engagement was to ensure that our compensation levels and practicesare designed to support long-term growth and success, reflect best practicesand address the needs of our company, employees and stockholders. In connectionwith its engagement by the Committee, Towers Watson was instructed to performthe following assignments:

 

·         providean assessment of our total direct compensation (base salary, short-termincentive and long-term incentive) for executive level positions;

 

·         provideadvice on competitive compensation practices and executive compensation issuesand trends;

 

·         provideindependent recommendations to the Committee on Chief Executive Officercompensation; and

 

·         providea review and assessment of the Company’s overall compensation program design,including short-term and long-term incentive practices.

 

Towers Watson presented itsrecommendations with respect to our Chief Executive Officer directly to theCompensation Committee, without the participation of the Chief ExecutiveOfficer. The other recommendations of Towers Watson were provided to theCompensation Committee and our Chief Executive Officer with input from ourhuman resources personnel, who worked directly with Towers Watson on theassignment. The reports were 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, and the Committeecontinued the use of such components of executive compensation for fiscal year2009.

 

**Total Compensation of Executive Officers**

 

Our executive compensationprograms consist primarily of (i) base salary, (ii) short-termincentive compensation in the form of quarterly or annual 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 an independent compensation consultant engaged bythe Compensation Committee and, for executives other than the Chief ExecutiveOfficer, based in part on qualitative input and recommendations made to theCompensation Committee by our Chief Executive Officer. For the 2009 fiscalyear, each of our executive officers received cash compensation in the form ofan annual base salary and cash bonuses, and each also received long-termincentive compensation in the form of stock option grants. The CompensationCommittee has not adopted any formal or informal policies or guidelines forallocating compensation between long-term and short-term compensation, betweencash and non-cash compensation, or among different forms of non-cashcompensation other than its determination that the total compensation and eachcomponent of compensation to be provided to each executive officer in 2009 waswithin the range of total compensation and the range of each component ofcompensation paid to similarly situated executive officers in the revieweddata.

 

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 2009 fiscal year.

 

In assessing thecompetitiveness of our executive compensation, our Compensation Committeereviewed reports from Towers Watson, 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., 

 

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Plantronics, Inc. andPolycom, 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 Watson’s 2006Retail/Wholesale Industry Executive Compensation Database (updated to July 2007)and were organized by job title and scope of responsibility for each of ournamed executive officers. “Predicted” pay levels were then determined by usingregression analysis to adjust both survey and proxy data based on annualrevenues of $1 billion for our company for the relevant period.

 

The Compensation Committeeused the reports provided by Towers Watson to confirm that the totalcompensation and each component of compensation provided to our named executiveofficers was within the range of total compensation and each component ofcompensation paid to similarly situated officers in the peer group. While theCompensation Committee utilized this peer group and other data (including thebase salary survey data discussed below under “Base Salaries”) as a generalguideline, it does not specifically benchmark total compensation or anycompensation component against the companies included in the surveys.

 

In setting the totalcompensation levels and each component of our executive compensation programfor 2009, the Compensation Committee reviewed and considered the comparativepeer group data collected from previous years as described above, as well asthe qualitative input from the Chief Executive Officer regarding retention andincentive requirements (for executive officers other than the Chief ExecutiveOfficer). The Committee determined that the total compensation and eachcomponent of compensation to be provided to each executive officer in 2009 waswithin the range of total compensation and the range of each component ofcompensation paid to similarly situated executive officers in the revieweddata. However, the Compensation Committee did not establish any specific peergroup comparative percentile targets or relative percentages of totalcompensation that any component of compensation should represent for any of ourexecutives.

 

**Base Salaries**

 

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 set at levels which the Compensation Committee believes arecompetitive with base salaries paid to executive officers of the peer companiesdescribed above and with the Los Angeles market for executives of publiclytraded companies having approximately similar revenues and number of employeesto those of PC Mall. The Committee used this market survey data for generalbackground purposes to determine whether our executive compensation levels weresubstantially higher or lower than those of companies within the geographicmarket in which we compete for qualified executives. However, as describedabove, the Compensation Committee does not specifically benchmark base salariesof our executive officers against those of the companies included in thesurveys. For executive officers other than our Chief Executive Officer, basesalaries also were established in part after consideration of qualitative inputfrom our Chief Executive Officer about retention and incentive considerationsafter his discussions 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 andincentive considerations and other qualitative factors. In addition toadjustments made for competitive, retention and incentive reasons, the Committeehas periodically adjusted executive officer base salaries based on itsassessment of each executive’s performance and history with us and our overallbudgetary considerations for salary increases. In 2008, the CompensationCommittee approved small increases in the base salaries of each of ourexecutive officers to offset the discontinuation of certain subsidized medicaland dental benefits previously offered to them by our company. Based in part onthe reports provided to the Committee by the independent compensationconsulting firm, no changes were made for fiscal year 2009 to the base salaryrates (that is, the bi-weekly base salary rates) in effect for our namedexecutive officers at the end of fiscal year 2008. During 2009, each of thenamed executive officers participated in a mandatory two week long furlough(leave without pay) as one of the company’s cost reduction measures for 2009.

 

**Short-Term Incentive Compensation**

 

Each of our named executiveofficers other than our General Counsel and our Executive Vice President ofCorporate Development and Investor Relations 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. In August 2009, the Compensation Committee adopted a new executivebonus plan effective for the third and fourth quarters of 2009. The plans weredesigned to award quarterly or annual cash bonuses to eligible officers only inthe event we achieved short-term financial goals. The plans are intended toreward and motivate our executives and to align the interests of managementwith our stated objectives to focus on our profitability and increaseshareholder value.

 

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For the first two quartersof 2009, the financial goals consisted of year-over-year quarterly and annualimprovements in our consolidated adjusted pre-tax income. Under this version ofthe bonus plan, each of our participating executive officers was eligible to receivea maximum aggregate quarterly cash bonus amount equal to a fixed percentage ofany amount by which our consolidated adjusted pre-tax income for each quarterexceeds our consolidated adjusted pre-tax income for the same quarter of theprior year and an additional maximum aggregate annual bonus amount equal to afixed percentage of any amount by which our consolidated adjusted pre-taxincome for such fiscal year exceeds our consolidated adjusted pre-tax incomefor the prior fiscal year.

 

Under the new executivebonus plan (effective for the third and fourth quarter of 2009), each of ourparticipating executive officers was eligible to receive (i) a quarterlycash bonus equal to a fixed percentage of our consolidated adjusted pre-taxincome (as described below) for such quarter, subject to such consolidatedadjusted pre-tax income being equal to or greater than a pre-determinedtargeted adjusted pre-tax income for such quarter (“Target 1”) and (ii) anadditional quarterly cash bonus in the amounts set forth in the table below ifour quarterly adjusted pre-tax income for each of the bonus periods discussedabove was greater than a pre-determined targeted adjusted pre-tax income forsuch quarter (“Target 2”). The annual bonus portion of the plan in effectivefor the first and second quarters of 2009 was cancelled and replaced with thequarterly awards available under the new executive bonus plan adopted for thethird and fourth quarters of 2009.

 

For purposes of theexecutive bonus plans, “adjusted pre-tax income” is defined as our consolidatedpre-tax income for the applicable period less certain costs that are excludedfrom the calculation on a periodic basis by the Compensation Committee in itssole discretion and, solely for purposes of the new executive bonus plan forthe third and fourth quarters of 2009, excluding executive bonus accruals, ifany. Such adjustments were intended to allow the Committee to exclude expensesthat it may determine do not allow for a fair comparison of performance in theapplicable period or expenses which it may determine are not in the control ofthe eligible executives. The Compensation Committee retains discretion to awardless than the full amount of the bonuses permitted under the executive bonusplan as well as discretion as to the items to be excluded in the calculation of“adjusted income.” Historically, these excluded items have included stock-basedcompensation expense, litigation settlement charges and goodwill impairmentcharges. In determining bonus amounts payable for the 2009 fiscal year, theCommittee excluded a litigation settlement charge of $790,000 for the secondquarter of 2008. For the third quarter of 2009, the excluded executive bonusaccrual amount was approximately $296,000 and there was no exclusion for thefourth quarter of 2009.

 

The following table showsthe year-over-year improvement in our consolidated adjusted pre-tax income forour executive bonus plan effective for the first and second quarters of 2009(over the corresponding quarters of the 2008 fiscal year), together with the100% payout for each of our named executive officers participating in theexecutive bonus plan for such periods and the actual bonus amounts awarded forsuch periods:

 
| **Bonus Payments under Executive Bonus Plan — Q1 and Q2 2009** | ** ** |
|---------------------------------------------------------------------|------------|
| **Plan  Participant**                                               | ** ** | **100% of  Quarterly  Improvement  (Q1/Q2 Bonus  Plan)** | ** ** | **Improvement  of Company’s  Adjusted Pre-  Tax Income  (Q1 2009 vs.  Q1 2008)** | ** ** | **Q1 2009  Awarded  Bonus** | ** ** | **Improvement  of Company’s  Adjusted Pre-  Tax Income  (Q2 2009 vs.  Q2 2008)** | ** ** | **Q2 2009  Awarded  Bonus** | ** ** |
| Frank F. Khulusi                                                    |       | 2.85 | % | $ | 0 |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |
| Brandon H. LaVerne                                                  |       | 0.9 | % | 0 |   | 0 |   | 0 |   | 0 |   |
| Kristin M. Rogers                                                   |       | 0.9 | % | 0 |   | 0 |   | 0 |   | 0 |   |
|                                                                     |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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Thefollowing table shows the 100% payout targets for each component of our newexecutive bonus plan effective for the third and fourth quarters of 2009 foreach of our named executive officers participating in the executive bonus planfor such periods, together with the actual bonus amounts awarded for suchperiods:

 
| **Bonus Payments under New Executive Bonus Plan — Q3 and Q4 2009** | ** ** |
|-------------------------------------------------------------------------|------------|
| ** **                                                              | ** ** | ** ** | ** ** | **Target 1** | ** ** | **Target 2** | ** ** | **Total  Target 1  and  Target 2** | ** ** |
| **Plan  Participant**                                                   | ** ** | **PC Mall  Adjusted  Pre-Tax  Income** | ** ** | **100% of  Achieved  Income  Bonus** | ** ** | **Adjusted  Pre-Tax  Income  Target** | ** ** | **Awarded  Quarter  Bonus** | ** ** | **Maximum  Additional  Quarterly  Bonus** | ** ** | **Adjusted  Pre-Tax  Income  Target** | ** ** | **Awarded  Quarter  Bonus** | ** ** | **Total  Awarded  Quarter  Bonus** | ** ** |
| **Q3 2009**                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Frank F. Khulusi                                                        |       | $ | 2,939,000 |   | 3.8 | % | $ | 2,133,333 |   | $ | 111,682 |   | $ | 95,000 |   | $ | 3,200,000 |   | $ | 0 |   | $ | 111,682 |   |
| Brandon H. LaVerne                                                      |       | 2,939,000 |   | 1.2 | % | 2,133,333 |   | 35,268 |   | 30,000 |   | 3,200,000 |   | 0 |   | 35,268 |   |
| Kristin M. Rogers                                                       |       | 2,939,000 |   | 1.2 | % | 2,133,333 |   | 35,268 |   | 30,000 |   | 3,200,000 |   | 0 |   | 35,268 |   |
|                                                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Q4 2009**                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Frank F. Khulusi                                                        |       | $ | 203,000 |   | 3.8 | % | $ | 2,733,333 |   | $ | 0 |   | $ | 95,000 |   | $ | 4,100,000 |   | $ | 0 |   | $ | 0 |   |
| Brandon H. LaVerne                                                      |       | 203,000 |   | 1.2 | % | 2,733,333 |   | 0 |   | 30,000 |   | 4,100,000 |   | 0 |   | 0 |   |
| Kristin M. Rogers                                                       |       | 203,000 |   | 1.2 | % | 2,733,333 |   | 0 |   | 30,000 |   | 4,100,000 |   | 0 |   | 0 |   |

 

TheCommittee allocates available amounts under the plan to eligible executiveofficers based on maximum quarterly fixed percentages for each officer. TheCompensation Committee may amend the percentage participation and additionalcash bonus amounts from time to time in its sole discretion. In addition, theCompensation Committee may in its sole discretion reduce the amounts that wouldotherwise be payable to any participant for any period (including a completeelimination of all amounts identified under the tables above for the period).Any such reduction may be based on quantitative or qualitative factorsdetermined in the discretion of the Compensation Committee. Reductions in themaximum amounts paid to individual named executive officers have generally beenmade based on qualitative recommendations from our Chief Executive Officer (forexecutives other than the Chief Executive Officer).

 

Inestablishing the prior executive bonus plan and the new bonus plan effectivefor the second half of 2009, 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 2009 wouldallow for a total cash compensation for each such officer within the peer grouprange for total cash compensation.

 

Thebonuses paid to our General Counsel, Mr. Newton and Executive VicePresident of Corporate Development and Investor Relations, Mr. Hayek, werepaid in accordance with their employment agreements, as such amounts have beenincreased from time to time by the Compensation Committee in its discretion.The total amount of bonus paid to Mr. Newton and Mr. Hayek was basedin part upon the Committee’s review of the total cash compensation datarelative to the peer group provided in the reports to the CompensationCommittee from the independent compensation consulting firm and in part uponthe recommendation of our Chief Executive Officer after a qualitativeevaluation of Mr. Newton’s and Mr. Hayek’s contributions to ourcompany.

 

7

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**Long-Term Incentive Compensation**

 

Ourlong-term incentive compensation has historically consisted only of stockoption grants, which are provided under our 1994 Stock Incentive Plan andadministered by the Compensation Committee. We have made periodic grants ofstock options to executives for the purpose of aligning their long-termmotivations with the interests of our stockholders and in consideration of thefact that we offer no other significant long-term, deferred or retirementcompensation to our executive officers.

 

TheCompensation Committee is not tied to any particular process or formula todetermine the size of the long-term incentive awards granted to our namedexecutive officers. Consequently, the Committee uses its discretion to grantequity awards and may consider the various factors discussed below. In fiscal2009, to determine the size of the equity awards for our named executive officers,the Committee first reviewed our Chief Executive Officer’s recommendations foroptions to be granted during fiscal 2009 to our executive officers other thanthe Chief Executive Officer. In each case, the Committee then madedeterminations of the specific amounts and terms of options to be granted toeach executive officer, including our Chief Executive Officer, based on itssubjective consideration of the recommendations of the Chief Executive Officer,historical grant information, the Committee’s views of comparative compensationdata provided to the Committee by Towers Watson, retention and motivationalfactors, corporate performance, individual performance, the executive’s levelof responsibility, the potential impact that the executive could have on ouroperations and financial condition and the market price of our common stock.

 

Stockoptions have historically generally been granted to our executive officersbased on a subjective and market-based evaluation by the Compensation Committee(based in part upon recommendations from our Chief Executive Officer withrespect to executive officers other than the Chief Executive Officer) of arecipient’s contributions and continuing value to us and the performance of hisor her respective 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.

 

Indetermining what long-term incentive programs to offer our executive officers,the Compensation Committee considers the impact of our adoption ofSFAS 123R “Share-Based Payment,” which requires us to expense thecompensation costs related to stock option awards ratably over their vestingperiods.

 

Fromtime to time, our Compensation Committee evaluates the structure of ourlong-term incentive programs and may make modifications to these programs toreflect our changing needs and our need to attract, retain and motivate ourexecutive officers. These changes may be based, in part, on market conditionsand the compensation programs of our competitors. As new long-term incentiveinstruments are developed and the tax and accounting treatment of various instrumentsare subject 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.

 

Thecompensation reports provided to the Compensation Committee in December 2007and 2008 by the independent compensation consulting firm included long-term,non-cash incentive compensation market competitive data and analysis which wasreviewed and considered by the Committee in determining the 2009 stock optiongrants to executives. This data and analysis contemplated the annualizedexpected value of option grants ultimately provided to our executive officersin 2009 relative to long-term, non-cash incentive compensation provided to peergroup executives. The value of each grant also was analyzed for its effect ontotal compensation, representing the long-term, non-cash component of ourexecutive compensation. The Committee determined that the level of each grantin 2009 to each of our executive officers was within the range of annuallong-term, non-cash incentive compensation relative to the considered peergroups for each executive officer and further determined that the level of eachgrant in 2009 to each executive officer when considered together with the totalcash compensation for 2009 placed the level of 2009 total compensation for eachexecutive officer within the market range.

 

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

 

Wehave generally considered option grants to our executive officers at regularlyscheduled meetings of the Compensation Committee. Formal approval of stockoption grants is obtained on the date of grant. We do not have, and do notintend to have, any program, plan or practice to time the grant of stock optionsin coordination with the release of material non-public information. We also donot have, and do not intend to have, any program, plan or practice to time therelease of material non-public information for the purpose of affecting thevalue to executive compensation. The exercise price for stock options we havegranted equals the closing price of our common stock on the grant date. We havegranted fixed-price stock options that generally vest in equal quarterlyinstallments usually over a three to five year period. Our option grants havenot 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 been intendedas an important feature of each option designed to motivate our executiveofficers to enhance our stockholders’ value over a long-term period.

 

8

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**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 increased by our Compensation Committee, effective March 1,2006, from $600,000 to $800,000. Mr. Khulusi is currently entitled to anannual base salary of $807,919. Previously, in May 2005, Mr. Khulusivoluntarily elected to reduce his annual base salary from $800,000 to $600,000.Mr. Khulusi is eligible to participate in our employee benefit plans thatare generally available to similarly situated employees.

 

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’s employment is terminated bythe Company without cause (which may occur at any time upon 90 days’advance written notice to Mr. Khulusi), the Company will pay him hissalary through the end of the notice period and, in addition, a lump sum amountequal to two times the total salary and bonus compensation paid to him for thetwelve months immediately preceding the notice of termination, in each casesubject to the December 2008 amendment of Mr. Khulusi’s employmentagreement which amended the agreement to clarify that the agreement is intendedto comply with Section 409A of the United States Internal Revenue Code andrelated regulations in all instances and that any payments which would causenon-compliance will be delayed in a manner necessary for compliance;

 

·         If Mr. Khulusi’s employment is terminated byhim for good reason (which may occur upon 30 days’ advance written noticeto the Company), including as a result of the Company notifying him of itsdecision to not renew the employment agreement for an additional period asdescribed above, the Company will pay him a lump sum upon such terminationequal to two times the total salary and bonus compensation paid to him for thetwelve months immediately preceding the notice of termination; and

 

·         In the event of a change of control of the Company,upon consummation of the change of control, Mr. Khulusi’s employmentagreement will terminate and he will receive a lump sum payment equal to twotimes the total salary and bonus compensation paid to him for the twelve monthsimmediately 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.

 

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) any consolidation ormerger of the Company in which the Company is not the continuing or survivingcorporation or pursuant to which shares of the Company’s common stock would beconverted into cash, securities or other property, other than a merger of theCompany in which the holders of the Company’s common stock immediately prior tothe merger have the same proportionate ownership of common stock of thesurviving corporation immediately after the merger, (ii) any reverse mergerin which the Company is the continuing or surviving corporation but in whichsecurities possessing more than 50% of the total combined voting power of theCompany’s outstanding securities are transferred to a person or personsdifferent from those who hold such securities immediately prior to the merger,or (iii) any sale, lease, exchange or other transfer (in one or morerelated transactions) of all, or substantially all, of the assets of theCompany;

 

·         our stockholders approve a plan or proposal for theliquidation or dissolution of us;

 

·         any person other than Mr. Khulusi or certain ofhis relatives or affiliates become the direct or indirect beneficial owners of20% or more of our common stock (other than as a result of purchases by suchperson directly from us); or

 

·         during any 12-month period, individuals who at thebeginning of the period constitute our entire Board of Directors cease for anyreason to constitute a majority thereof unless the election, or the nominationfor election by our stockholders, of each new director was approved by a voteof at least a majority of the directors then still in office who were directorsat the beginning of the period.

 

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

 

9

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BrandonH. LaVerne, our Chief Financial Officer, is an “at will” employee and is currentlyentitled to an annual base salary of $279,413. Mr. LaVerne is eligible toparticipate in our executive bonus plan in the discretion of our CompensationCommittee, and may receive discretionary bonuses from time to time in thediscretion of our Compensation Committee with the input of our Chief ExecutiveOfficer. In January 2007, we entered into a severance agreement with Mr. LaVerne,pursuant to which Mr. LaVerne is entitled to severance pay equal to sixmonths of his annual base salary in the event his employment is terminatedwithout cause within a twelve month period following a change-in-control of ourcompany. The severance payments would be made in equal installments over sixmonths and are contingent upon his execution of a satisfactory severance andrelease agreement. Mr. LaVerne is eligible to participate in our employeebenefit plans that are generally available to similarly situated employees.

 

InJanuary 2000, we entered into an employment agreement with Kristin M.Rogers, our Executive Vice President, Sales and Marketing. 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 Executive Vice President, General Counsel and Secretary. Mr. Newton’semployment agreement was amended in February 2005. Pursuant to the termsof our agreement with Mr. Newton, he is an “at will” employee and iscurrently entitled to an annual base salary of $304,413. Mr. Newton iscurrently eligible to receive an annual bonus of up to $120,000, as well asadditional discretionary bonuses as determined from time to time by theCompensation Committee, and is entitled to severance pay equal to six months ofhis annual base salary in the event his employment is terminated without cause.The severance payments would be made in equal installments over six months andare contingent upon his execution of a satisfactory severance and releaseagreement. Mr. Newton is eligible to participate in our employee benefitplans that are generally available to similarly situated employees.

 

In March 2008, weentered into an employment agreement with Joseph B. Hayek, our Executive VicePresident of Corporate Development and Investor Relations. Pursuant to theterms of our agreement with Mr. Hayek, he is an “at will” employee and iscurrently entitled to an annual base salary of $255,193. Mr. Hayek iscurrently eligible to receive an annual discretionary bonus in the initialtargeted annual amount of $50,000, which will be paid annually in accordancewith a to be established bonus program, and is entitled to severance pay equalto six months of his annual base salary in the event his employment isterminated without cause. The severance payments would be made in equalinstallments over six months, unless otherwise decided by the Company, and arecontingent upon his execution of a satisfactory severance and releaseagreement. Mr. Hayek is eligible to participate in our employee benefitplans that are generally available to similarly situated employees.

 

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, Executive Vice President andGeneral Counsel and Executive Vice President of Corporate Development andInvestor Relations will become fully vested and exercisable, subject to certainexceptions and limitations and a portion of the unvested stock options of ourother executive officers will become vested and exercisable, subject to certainexceptions 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 2009.

 

10

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Copiesof each of the above-referenced employment agreements, as well as summaries ofour executive bonus plans, are filed as exhibits to our periodic reports filedwith the Securities and Exchange Commission.

 

**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. Through the end of 2008, our executiveofficers received health care benefits in the form of subsidized health careinsurance premium payments we made on behalf of our executives and their familymembers. Ms. Rogers receives a monthly car allowance. 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 2009, our executives didnot receive compensation subject to Section 162(m) at a level thatexceeds the $1.0 million limit. However, the Compensation Committeebelieves that in certain circumstances factors other than tax deductibilitytake precedence when determining the forms and levels of executive compensationmost appropriate and in the best interests of us and our stockholders. Givenour changing industry and business, as well as the competitive market foroutstanding executives, the Compensation Committee believes that it isimportant to retain the flexibility to design compensation programs consistentwith its overall executive compensation philosophy even if some executivecompensation is not fully deductible. Accordingly, the Compensation Committeemay from time to time deem it appropriate to approve elements of compensationfor certain officers that are not fully deductible.

 

11

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**EXECUTIVEAND DIRECTOR COMPENSATION**

 

**SummaryCompensation Table**

 

The following table setsforth the cash and non-cash compensation for fiscal years 2009, 2008 and 2007awarded to or earned by our Chief Executive Officer, our Chief FinancialOfficer and each of our other three most highly compensated executive officerswhose total compensation exceeded $100,000. The individuals listed in thefollowing table are sometimes referred to as the “named executive officers.”

 
| **Name and Principal Position**                            | ** ** | **Year**   | ** ** | **Salary  ($)(1)** | ** ** | **Bonus  ($)** | ** ** | **Option  Awards  ($)(2)** | ** ** | **All Other  Compensation  ($)** | ** ** | **Total  ($)** | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|--------------------|------------|----------------|------------|----------------------------|------------|---------------------------------------|------------|----------------|------------|
| ** **                                                                | ** ** | ** ** | ** ** | ** **         | ** ** | ** **     | ** ** | ** **                 | ** ** | ** **                            | ** ** | ** **     | ** ** |
| Frank F. Khulusi                                                          |       | 2009       |       | $                  | 776,845    |           | $          | 111,682                    |       | $                                     | 599,720    |           | $          | 4,333 | (3) | $ | 1,492,580 |   |
| *President and CEO*                                                       |       | 2008       |       | 806,982            |       | 113,671        |       | 693,609                    |       | 11,093                                | (4)        | 1,625,355      |       |
| * *                                                                  |       | 2007       |       | 800,000            |       | 355,491        |       | 579,424                    |       | 9,512                                 | (4)        | 1,744,427      |       |
|                                                                      |       |       |       |               |       |           |       |                       |       |                                  |       |           |       |
| Brandon H. LaVerne(7)                                                     |       | 2009       |       | 268,667            |       | 35,268         |       | 136,300                    |       | 3,093                                 | (3)        | 443,328        |       |
| *Chief Financial Officer*                                                 |       | 2008       |       | 241,875            |       | 28,000         |       | 281,989                    |       | 6,685                                 | (4)        | 558,549        |       |
| * *                                                                  |       | 2007       |       | 194,604            |       | 53,350         |       | 115,729                    |       | 5,232                                 | (4)        | 368,915        |       |
|                                                                      |       |       |       |               |       |           |       |                       |       |                                  |       |           |       |
| Kristin M. Rogers                                                         |       | 2009       |       | 326,360            |       | 35,268         |       | 136,300                    |       | 10,042                                | (5)        | 507,970        |       |
| *Executive Vice President-**Sales and Marketing*                          |       | 2008       |       | 338,042            |       | 22,689         |       | 194,495                    |       | 13,890                                | (6)        | 569,116        |       |
| * *                                                                  |       | 2007       |       | 312,865            |       | 125,468        |       | 154,306                    |       | 16,971                                | (6)        | 609,610        |       |
|                                                                      |       |       |       |               |       |           |       |                       |       |                                  |       |           |       |
| Robert I. Newton                                                          |       | 2009       |       | 292,705            |       | 97,500         |       | 136,300                    |       | 2,106                                 | (3)        | 528,611        |       |
| *Executive Vice President,**General Counsel and Secretary*                |       | 2008       |       | 302,773            |       | 120,000        |       | 194,495                    |       | 6,936                                 | (4)        | 624,204        |       |
| * *                                                                  |       | 2007       |       | 267,692            |       | 135,000        |       | 154,306                    |       | 6,784                                 | (4)        | 563,782        |       |
|                                                                      |       |       |       |               |       |           |       |                       |       |                                  |       |           |       |
| Joseph B. Hayek(8)                                                        |       | 2009       |       | 245,377            |       | 40,625         |       | 136,300                    |       | 2,388                                 | (3)        | 424,690        |       |
| *Executive Vice President-**Corporate Development and Investor Relations* |       |       |       |               |       |           |       |                       |       |                                  |       |           |       |
|                                                                           |            |            |            |                    |            |                |            |                            |            |                                       |            |                |            |  |  |  |  |  |

 

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(1)                        The amountsunder the “Salary” column for 2009 include a reduction related to two weeks ofunpaid leave associated with a furlough program in place during 2009. Basesalary amounts for the named executive officers in place for 2009 (without thefurlough reduction) was as follows: Mr. Khulusi - $807,919; Mr. LaVerne- $279,413; Ms. Rogers - $339,414; Mr. Newton - $304,413; and Mr. Hayek- $255,193. 

(2)                        Represents theaggregate grant date fair value of options, valued in accordance with FASB ASC718 (formerly SFAS 123R),   awardedto each of the named executive officers for each respective year. For adetailed discussion of the assumptions made in the valuation of stock optionawards, please see Notes 2 and 3 of our Notes to the ConsolidatedFinancial Statements included in our original filing of this Annual Report on Form 10-Kfor the year ended December 31, 2009. 

(3)                        Includescompany matched 401(k) contributions on behalf of the executive which theCompany began matching as of July 1, 2007.

(4)                        Includesmedical and dental insurance premiums we subsidized through November 2008on behalf of the executive above and beyond pricing that is available to thegeneral employee population, and company matched 401(k) contributions onbehalf of the executive which the Company began matching as of July 1,2007.

(5)                        Includescompany matched 401(k) contributions on behalf of the executive which theCompany began matching as of July 1, 2007 and car allowances.

(6)                        Includesmedical and dental insurance premiums we subsidized through November 2008on behalf of the executive above and beyond pricing that is available to thegeneral employee population, company matched 401(k) contributions onbehalf of the executive which the Company began matching as of July 1,2007, and car allowances.

(7)                        On June 7,2007, our board of directors appointed Mr. LaVerne as Interim ChiefFinancial Officer effective upon the departure of our former Chief FinancialOfficer on June 30, 2007. In July 2008, Mr. LaVerne was promotedfrom the position of Interim Chief Financial Officer to Chief FinancialOfficer.

(8)                        Mr. Hayekjoined our company in March 2008.

 

12

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**Grants ofPlan-Based Awards (2009)**

 
| **Name**           | ** ** | **Grant  Date** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying  Options (#)(1)** | ** ** | **Exercise  or Base  Price of  Option  Awards  ($/sh)** | ** ** | **Grant Date  Fair  Value of  Option  Awards (2)** | ** ** |
|--------------------|------------|-----------------|------------|--------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|
| Frank F. Khulusi   |       | 08/21/2009      |       | 110,000                                                                                          |       | $                                                                 | 7.99       |                                                              | $          | 599,720 |   |
| Brandon H. LaVerne |       | 08/21/2009      |       | 25,000                                                                                           |       | 7.99                                                              |       | 136,300                                                           |       |
| Kristin M. Rogers  |       | 08/21/2009      |       | 25,000                                                                                           |       | 7.99                                                              |       | 136,300                                                           |       |
| Robert I. Newton   |       | 08/21/2009      |       | 25,000                                                                                           |       | 7.99                                                              |       | 136,300                                                           |       |
| Joseph B. Hayek    |       | 08/21/2009      |       | 25,000                                                                                           |       | 7.99                                                              |       | 136,300                                                           |       |
|                    |            |                 |            |                                                                                                  |            |                                                                   |            |                                                                   |            |  |  |

 

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(1)                        These optionsvest quarterly in equal installments over four years, with full vesting on August 21,2013, and have a term of ten years.

(2)                        The grant datefair values of the stock options granted were computed in accordance with ASC718 (formerly SFAS No. 123R). For a detailed discussion of the assumptionsmade in the valuation of stock option awards, please see Notes 2 and 3 ofour Notes to the Consolidated Financial Statements included in our originalfiling of this Annual Report on Form 10-K for the year ended December 31,2009.

 

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**OutstandingEquity Awards at Fiscal Year-End (2009)**

 

The following table setsforth information regarding unexercised options for each of our named executiveofficers outstanding as of December 31, 2009.

 
| ** **         | ** ** | **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   |       | 100,000                                                                                |       | — |   | $ | 6.23 |   | 10/28/2014 |   |
|               |       | 45,000                                                                                 |       | 45,000 | (1) | 10.50 |   | 12/14/2017 |   |
|               |       | 28,125                                                                                 |       | 61,875 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | 16,250                                                                                 |       | 48,750 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       | 6,875                                                                                  |       | 103,125 | (5) | 7.99 |   | 08/21/2019 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Brandon H. LaVerne |       | 7,000                                                                                  |       | — |   | 5.02 |   | 11/21/2013 |   |
|               |       | 20,000                                                                                 |       | — |   | 6.36 |   | 05/24/2014 |   |
|               |       | 7,000                                                                                  |       | — |   | 4.49 |   | 06/29/2015 |   |
|               |       | 8,438                                                                                  |       | 6,562 | (4) | 12.27 |   | 08/31/2017 |   |
|               |       | 10,938                                                                                 |       | 24,062 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | 7,500                                                                                  |       | 22,500 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       | 1,563                                                                                  |       | 23,437 | (5) | 7.99 |   | 08/21/2019 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Kristin M. Rogers  |       | 11,500                                                                                 |       | — |   | 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 |   |
|               |       | 11,250                                                                                 |       | 8,750 | (4) | 12.27 |   | 08/31/2017 |   |
|               |       | 6,250                                                                                  |       | 13,750 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | 7,500                                                                                  |       | 22,500 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       | 1,563                                                                                  |       | 23,437 | (5) | 7.99 |   | 08/21/2019 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Robert I. Newton   |       | 50,000                                                                                 |       | — |   | 6.92 |   | 06/08/2014 |   |
|               |       | 50,000                                                                                 |       | — |   | 4.41 |   | 06/28/2015 |   |
|               |       | 11,250                                                                                 |       | 8,750 | (4) | 12.27 |   | 08/31/2017 |   |
|               |       | 6,250                                                                                  |       | 13,750 | (2) | 8.92 |   | 07/31/2018 |   |
|               |       | 7,500                                                                                  |       | 22,500 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       | 1,563                                                                                  |       | 23,437 | (5) | 7.99 |   | 08/21/2019 |   |
|               |       |                                                                                   |       |   |   |   |   |   |   |
| Joseph B. Hayek    |       | 32,813                                                                                 |       | 42,187 | (6) | 7.06 |   | 03/17/2018 |   |
|               |       | 7,500                                                                                  |       | 22,500 | (3) | 4.01 |   | 11/07/2018 |   |
|               |       | 1,563                                                                                  |       | 23,437 | (5) | 7.99 |   | 08/21/2019 |   |
|                    |            |                                                                                        |            |  |  |  |  |  |  |  |

 

----

(1)                        These optionswere granted on December 14, 2007 and vest quarterly in equal installmentsover 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 optionswere granted on August 31, 2007 and vest quarterly in equal installmentsover four years, with full vesting on August 31, 2011.

(5)                        These optionswere granted on August 21, 2009 and vest quarterly in equal installmentsover four years, with full vesting on August 21, 2013.

(6)                        These optionswere granted on March 17, 2008 and vest quarterly in equal installments overfour years, with full vesting on March 17, 2012.

 

14

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**OptionExercises and Stock Vested (2009)**

 

The following table providesinformation regarding each exercise of stock option awards for each of ournamed executive officers during the fiscal year ended December 31, 2009.

 
| ** **         | ** ** | **Option Awards**                                             | ** ** |
|--------------------|------------|--------------------------------------------------------------------|------------|
| **Name**           | ** ** | **Number of Shares  Acquired on Exercise (#)** | ** ** | **Value Realized  on Exercise  ($)(1)** | ** ** |
| Frank F. Khulusi   |       | 50,000                                                             |       | $ | 220,500 |   |
| Brandon H. LaVerne |       | —                                                             |       | — |   |
| Kristin M. Rogers  |       | 6,000                                                              |       | 16,868 |   |
| Robert I. Newton   |       | —                                                             |       | — |   |
| Joseph B. Hayek    |       | —                                                             |       | — |   |
|                    |            |                                                                    |            |  |  |  |

 

----

| (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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**PotentialPayments Upon Termination or Change in Control (2009)**

 

Provisions of our employmentand change of control arrangements with the named executive officers and ourequity incentive plan or individual award agreements thereunder provide forcertain payments to our named executive officers at, following or in connectionwith a termination of their employment or a change of control of PC Mall. See “EmploymentAgreements and Severance and Change-in-Control Arrangements” in ourCompensation Discussion and Analysis section above for a discussion of thespecific circumstances that would trigger payments under the employmentagreements with our named executive officers

 

The agreements pursuant towhich we granted stock options to Mr. Khulusi, Mr. LaVerne, Mr. Newtonand Mr. Hayek provide for full acceleration of vesting of their unvestedoptions in the event of a change of control of our company. The agreementspursuant to which our other named executive officer received stock optionsprovide that, in the event of a change of control, a portion of the unvestedoptions then outstanding will become fully vested and exercisable if:

 

·         the option is not assumed or replaced (by an optionor comparable cash incentive) by the successor entity as part of suchtransaction; or

 

·         the option is assumed or replaced, but such officer’semployment is terminated by the successor entity without cause or by theexecutive for “good reason” within twelve (12) months of the change ofcontrol.

 

Under our stock incentiveplan, a change of control is deemed to occur upon:

 

·         the direct or indirect acquisition by any person orrelated group of persons of more than 50% of the total voting power ouroutstanding stock;

 

·         a change in the composition of our board over aperiod of 36 months or less such that a majority of our continuingdirectors cease to be members of our board;

 

·         a merger or consolidation in which we are not thesurviving entity or in which we survive as an entity but in which more than 50%of the voting power of our outstanding securities are transferred to personsdifferent from those who held such securities immediately prior to such merger; or

 

·         the sale, transfer or other disposition of all orsubstantially all of our assets or our liquidation or dissolution.

 

The table below sets forththe estimated payments that would be made to each of our named executiveofficers upon voluntary termination, involuntary termination, a change ofcontrol, and death or permanent disability. The actual amounts to be paid outcan only be determined at the time of such named executive officer’s separationfrom PC Mall. The information set forth in the table assumes, as necessary:

 

·         The termination and/or the qualified change incontrol event occurred on December 31, 2009 (the last business day of ourlast completed fiscal year);

 

·         The price per share of our common stock on the dateof termination is $5.22 (the closing market price of our common stock on theNasdaq Global Market on December 31, 2009); and

 

·         With respect to unvestedstock options, the options are not assumed or replaced as described above.

 

15

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| **Name**                         | ** ** | **Voluntary  Termination** | ** ** | **Death or  Permanent  Disability** | ** ** | **Change of  Control** | ** ** | **Involuntary  Termination** | ** ** |
|----------------------------------|------------|----------------------------|------------|------------------------------------------|------------|-----------------------------|------------|------------------------------|------------|
| Frank F. Khulusi                 |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement             |       | $                          | 1,839,201  | (1)(2)                                   | See        | (7)                         | $          | 1,839,201                    | (2)(3)     | $ | 1,839,201 | (2)(4) |
| Acceleration of Unvested Options |       | —                     |       | —                                   |       | 58,988                      | (8)        | —                       |       |
| Total:                           |       | $                          | 1,839,201  |                                     | —     |                        | $          | 1,898,189                    |       | $ | 1,839,201 |   |
|                             |       |                       |       |                                     |       |                        |       |                         |       |
| Brandon H. LaVerne               |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement             |       | —                     |       | —                                   |       | —                      |       | $                            | 139,707    | (4)(5) |
| Acceleration of Unvested Options |       | —                     |       | —                                   |       | $                           | 27,225     | (8)                          | —     |   |
| Total:                           |       | —                     |       | —                                   |       | $                           | 27,225     |                         | $          | 139,707 |   |
|                             |       |                       |       |                                     |       |                        |       |                         |       |
| Kristin M. Rogers                |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement             |       | —                     |       | —                                   |       | —                      |       | $                            | 174,646    | (4)(6) |
| Acceleration of Unvested Options |       | —                     |       | —                                   |       | $                           | 10,588     | (8)                          | —     |   |
| Total:                           |       | —                     |       | —                                   |       | $                           | 10,588     |                         | $          | 174,646 |   |
|                             |       |                       |       |                                     |       |                        |       |                         |       |
| Robert I. Newton                 |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement             |       | —                     |       | —                                   |       | —                      |       | $                            | 152,207    | (4)(5) |
| Acceleration of Unvested Options |       | —                     |       | —                                   |       | $                           | 27,225     | (8)                          | —     |   |
| Total:                           |       | —                     |       | —                                   |       | $                           | 27,225     |                         | $          | 152,207 |   |
|                             |       |                       |       |                                     |       |                        |       |                         |       |
| Joseph B. Hayek                  |       |                       |       |                                     |       |                        |       |                         |       |
| Employment Agreement             |       | —                     |       | —                                   |       | —                      |       | $                            | 127,597    | (4)(5) |
| Acceleration of Unvested Options |       | —                     |       | —                                   |       | $                           | 27,225     | (8)                          | —     |   |
| Total:                           |       | —                     |       | —                                   |       | $                           | 27,225     |                         | $          | 127,597 |   |

 

----

| (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 $4,939 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.                                                                                                                                                                                        |
| (8) | Represents  the value of outstanding stock options as of December 31, 2009 that would  vest upon consummation of a change in control. Assumes that the vested  options are immediately exercised and the shares received upon exercise are  immediately resold at the assumed per share price on the date of termination.  The option agreements of Mr. Khulusi, Mr. LaVerne, Mr. Newton  and Mr. Hayek provide for the full acceleration of vesting upon a change  of control. The option agreements of our other named executive officer  provide for partial acceleration of vesting upon a change of control if  certain additional conditions occur, as described above. The amounts  indicated in the table for the other named executive officer assume that the  additional conditions occurred at or following a change of control. |

 

16

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**Director Compensation (2009)**

 

The following table providesinformation regarding the compensation earned for services performed for us asa director by each member of our board of directors, other than directors whoare also named executive officers, during the fiscal year ended December 31,2009.

 
| **Name**         | ** ** | **Fees Earned or  Paid in Cash** | ** ** | **Stock  Awards  (1)(2)** | ** ** | **Option  Awards  (1)(3)** | ** ** | **All Other  Compensation** | ** ** | **Total** | ** ** |
|------------------|------------|------------------------------------------------------|------------|---------------------------|------------|----------------------------|------------|----------------------------------|------------|-----------|------------|
| Thomas A. Maloof |       | $                                                    | 57,500     |                      | $          | 59,925                     |       | —                           |       | —    |       | $ | 117,425 |   |
| Ronald B. Reck   |       | 54,000                                               |       | 59,925                    |       | —                     |       | $                                | 1,318      |      | 113,925    |   |
| Paul C. Heeschen |       | 49,000                                               |       | 59,925                    |       | —                     |       | —                           |       | 108,925   |       |
|                  |            |                                                      |            |                           |            |                            |            |                                  |            |           |            |  |  |  |  |

 

----

| (1) | Represents the aggregate  grant date fair value of stock and option awards, valued in accordance with  FASB ASC 718 (formerly SFAS 123R), awarded to each of the directors  during the 2009 fiscal year. For a detailed discussion of the assumptions  made in the valuation of stock and 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, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | As of December 31,  2009, each of our directors had the following aggregate number of unvested  restricted stock awards outstanding: Mr. Maloof — 5,625,  Mr. Reck — 5,625 and Mr. Heeschen — 5,625.                                                                                                                                                                                                                                                                  |
| (3) | No option awards were  granted to our directors in the 2009 fiscal year. As of December 31,  2009, 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 2009, we paid eachdirector who is not employed by us or any of our affiliates a quarterlyretainer of $7,000, plus $2,500 for each regular board meeting attended inperson or telephonically, $1,000 for each special board meeting attended inperson or telephonically, and $1,000 for each committee meeting attended inperson or telephonically. We also paid the chairperson of the Audit Committeeof our Board of Directors an additional quarterly retainer of $3,125 forserving in such capacity. We also paid the chairperson of the CompensationCommittee of our Board of Directors an additional quarterly retainer of $1,250for serving in such capacity. Directors who are employed by us or any of ouraffiliates are not paid any additional compensation for their service on ourboard of directors. We reimburse each of our directors for reasonableout-of-pocket expenses that they incur in connection with attending board orcommittee meetings. We have entered into indemnification agreements with eachof our directors, a form of which has been filed as an exhibit to our periodicreports filed with the Securities and Exchange Commission.

 

Our directors are alsoeligible to participate in our 1994 Plan, which is administered by ourCompensation Committee under authority delegated by our board of directors. Theterms and conditions of option and stock bonus grants to our non-employeedirectors under our 1994 Plan are determined in the discretion of ourCompensation Committee, and must be consistent with the terms of the 1994 Plan,which is filed as an exhibit to our original filing of this Annual Report on Form 10-K.

 

On August 21, 2009, ourCompensation Committee approved and granted, under our 1994 Plan, the award of7,500 shares of restricted stock to each of our non-employee members of the boardfor a total award of 22,500 shares of restricted stock. The restricted stockawards each vest quarterly in equal amounts over a one year period from thedate of grant. We valued the restricted stock award at fair value in accordancewith ASC 718 as of the grant date. See footnotes 1 and 2 in the table above formore information on restricted stock awards.

 

**COMPENSATIONCOMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**

 

Mr. Reck and Mr. Heeschenserved as members of our Compensation Committee during the fiscal year ended December 31,2009. There are no Compensation Committee interlocks between us and otherentities involving our executive officers and board members who serve asexecutive officers of such companies.

 

17

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**COMPENSATIONCOMMITTEE REPORT**

 

The Compensation Committeeof the Board has reviewed and discussed the Compensation Discussion andAnalysis with management. Based on its review and discussions with management,the Committee recommended to our Board that the Compensation Discussion andAnalysis be included in our Form 10-K for the year ended December 31,2009 and our Proxy Statement for the 2010 Annual Meeting 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 setsforth certain information regarding the beneficial ownership of our commonstock as of April 22, 2010 by: (i) each of the named executive officers; (ii) eachdirector; (iii) all of our current directors and executive officers as agroup; and (iv) each person known to us to be the beneficial owner of more than5% of the outstanding shares of our common stock. Percentage ownership is basedon an aggregate of 12,318,402 shares of our common stock outstanding on April 22,2010. 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, California90504.

 
| **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                                               |       | 8.1                                                     | %          |
| Dimensional Fund Advisors LP(2)                                           |       | 746,084                                                 |       | 6.1                                                     |       |
| Amre A. Youness(3)                                                        |       | 622,000                                                 |       | 5.0                                                     |       |
|                                                                      |       |                                                    |       |                                                    |       |
| *Directors and Executive  Officers:*                                      |       |                                                    |       |                                                    |       |
| Frank F. Khulusi                                                          |       | 2,291,431                                               | (4)        | 18.2                                                    |       |
| Brandon H. LaVerne                                                        |       | 77,014                                                  | (5)        | *                                                       |       |
| Kristin M. Rogers                                                         |       | 197,188                                                 | (6)        | 1.6                                                     |       |
| Robert I. Newton                                                          |       | 139,688                                                 | (7)        | 1.1                                                     |       |
| Joseph B. Hayek                                                           |       | 59,376                                                  | (8)        | *                                                       |       |
| Thomas A. Maloof                                                          |       | 70,500                                                  | (9)        | *                                                       |       |
| Ronald B. Reck                                                            |       | 49,500                                                  | (10)       | *                                                       |       |
| Paul C. Heeschen                                                          |       | 38,227                                                  | (11)       | *                                                       |       |
| All current directors and executive officers as a  group (9 persons) |       | 3,072,930                                               | (12)       | 23.2                                                    | %          |

 

----

| *   |   | 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 8, 2010 by Dimensional Fund  Advisors LP. Dimensional Fund Advisors LP has sole voting power with respect  to 723,523 shares of our common stock and sole dispositive power with respect  to 746,084 shares of our common stock. According to the Schedule 13G,  Dimensional Fund Advisors LP furnishes investment advice to four registered  investment companies and serves as investment manager to certain other  commingled group trusts and separate accounts, collectively known as the  “Funds.” In its role as investment advisor, sub-adviser and/or manager,  neither Dimensional Fund Advisors LP nor its subsidiaries (collectively,  “Dimensional”) possess voting and/or investment power over the securities of  the Issuer that are owned by the Funds, and may be deemed to be the  beneficial owner of the shares of the Issuer held by the Funds. However, all  securities reported in this schedule are owned by the Funds. Dimensional  disclaims beneficial ownership of such securities. The address for  Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave  Road, Austin, Texas, 78746. |

 

18

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| (3)  |   | The address for Mr. Youness is 310 North Lake  Avenue, Pasadena, California 91101.                                                                                                                                                                                                    |
|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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  246,125 shares underlying options which are presently vested or will  vest within 60 days of April 22, 2010. |
| (5)  |   | Includes  76,814 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                                  |
| (6)  |   | Consists of  197,188 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                              |
| (7)  |   | Consists of  139,688 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                              |
| (8)  |   | Consists of  59,376 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                               |
| (9)  |   | Includes of  56,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                               |
| (10) |   | Includes  10,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                                  |
| (11) |   | Includes  20,000 shares issuable upon exercise of stock options which are  presently vested or will vest within 60 days of April 22, 2010.                                                                                                                                  |
| (12) |   | This figure includes an  aggregate of 947,097 shares issuable upon exercise of stock options  which are presently vested or will vest within 60 days of April 22,  2010.                                                                                                    |

 

**EquityCompensation Plan Information**

 

The following table setsforth information about shares of our common stock that may be issued uponexercise of options and warrants under all of our equity compensation plans asof December 31, 2009:

 
| **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 |       | 2,687,718                                                                                                                          |       | $                                                                                                       | 5.68       |                                                                                                                                      | 1,141,690  | (1) |
|                                                        |            |                                                                                                                                    |            |                                                                                                         |            |                                                                                                                                           |            |  |

 

----

| (1) | Represents shares  available for issuance under our 1994 Stock Incentive Plan, as amended, as of  December 31, 2009. 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, 2010, an additional 368,719 shares became available  under the plan pursuant to the evergreen provision. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**ITEM 13.  CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS, AND DIRECTOR****INDEPENDENCE**

 

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

 

As required by the rules ofthe Nasdaq Stock Market and pursuant to our Audit Committee Charter, we conductan appropriate review of all related party transactions for potential conflictof interest situations on an ongoing basis and all such transactions must beapproved by the Audit Committee or another independent body of the board. Forpurposes of this review, “related party transactions” include all transactionsthat are required to be disclosed pursuant to SEC regulations. As a part ofthis process, our general counsel reviews and monitors the terms and conditionsof all related party transactions and informs the Audit Committee of anyproposed transaction that is deemed a related party transaction. In cases inwhich a proposed transaction has been identified as a related partytransaction, management presents information regarding the proposed relatedparty transaction to the Audit Committee or another body of independentdirectors for consideration and approval. In considering related party transactions,the Audit Committee takes into account the fairness of the proposed transactionto the Company and whether the terms of such transaction are at least as favorableto our company as we would receive or be likely to receive from an unrelatedthird party in a comparable or substantially comparable transaction.

 

19

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**CertainRelationships and Related Transactions**

 

We have entered intoindemnification agreements with each of our current directors and executiveofficers that provide the maximum indemnity available to directors and officersunder Section 145 of the Delaware General Corporation Law and our amendedand restated certificate of incorporation, as well as certain proceduralprotections. We have also entered into transactions with certain of ourdirectors and officers, as described under the section “Executive Compensation.”

 

SamU. Khulusi, the brother of Frank F. Khulusi, was employed as a Senior VicePresident of AF Services, LLC, a wholly-owned subsidiary of PC Mall, in fiscalyear 2009 and earned compensation in the amount of $220,000. Sam U. Khulusi didnot earn any bonus during 2009. Sam U. Khulusi is eligible to participate inour employee benefit plans that are generally available to similarly situatedemployees.

 

In February 2009, weentered into a Software License and Maintenance and Support Agreement withEruces, Inc., a Delaware corporation, pursuant to which Eruces licenseddata security technology to our company. Dr. Bassam Khulusi and Sam U.Khulusi, each of whom is a brother of our Chairman and Chief Executive OfficerFrank Khulusi, together beneficially own a majority of the outstanding votingstock of Eruces. Ronald Reck, a member of our Board of Directors and the AuditCommittee and the chairman of our Compensation Committee, is a minoritystockholder in Eruces. The Eruces technology licensed under the agreement isproprietary encryption software that was independently identified by ourDirector of Security as the best solution for certain of our data securityneeds. The transactions contemplated by the agreement were approved by theindependent members of our Board of Directors and Audit Committee in accordancewith our Audit Committee Charter and our policy for approval of related partytransactions. The agreement provides for a one-time license fee of $270,300 inconsideration for a worldwide, non-exclusive, perpetual and irrevocable licenseto use the software, a one-time $23,625 installation and integration fee andannual support fees in the initial amount of $40,545.

 

SimonM. Abuyounes, the brother-in-law of Frank F. Khulusi, was employed as thePresident of AF Services, LLC in fiscal year 2009 and earned compensation inthe amount of $343,087, which includes quarterly bonuses totaling $35,268, andcompany matched 401(k) contribution totaling $1,717. Mr. Abuyounes isentitled to six months severance based on his base salary in the event hisemployment is terminated by us without cause. Mr. Abuyounes is alsoeligible to participate in our employee benefit plans that are generallyavailable to similarly situated employees. Mr. Abuyounes was grantedoptions to purchase 25,000 shares of our common stock on August 21, 2009at exercise price of $7.99. The options vest quarterly over a four year periodfrom the grant date.

 

Webelieve that each of the transactions and agreements described above containcomparable terms to those we could have obtained from unaffiliated thirdparties.

 

**DirectorIndependence**

 

Nasdaq listing standardsrequire that a majority of the members of a listed company’s board of directorsqualify as “independent,” as affirmatively determined by the board ofdirectors. After review of all of the relevant transactions or relationshipsbetween each director (and his family members) and us, our senior managementand our independent registered public accounting firm, our board of directorshas affirmatively determined that each of Mr. Maloof, Mr. Heeschenand Mr. Reck is “independent” within the meaning of the applicable Nasdaqlisting standards.

 

Each member of our board ofdirectors serving on our audit and compensation committees is “independent”within the meaning of the applicable Nasdaq listing standards. The board ofdirectors does not have a nominating committee. As permitted by the Nasdaqlisting standards, in lieu of a nominating committee, nominations for directorcandidates are presented to the full board of directors for consideration andapproval upon the recommendation of no less than a majority of the independentmembers of the board of directors as defined in Rule 5605(a)(2) ofthe Nasdaq listing standards.

 

20

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**ITEM 14.  PRINCIPALACCOUNTING FEES AND SERVICES**

 

**Audit Fees**

 

The aggregate feesPricewaterhouseCoopers LLP billed us in each of the last two fiscal years forprofessional services it rendered to us for the audit of our annual financialstatements included in our annual reports on Form 10-K and review of ourfinancial statements included in our quarterly reports on Form 10-Q, aswell as for services that are normally provided by PricewaterhouseCoopers LLPin connection with statutory and regulatory filings or engagements for thoseyears, was $1,007,049 in 2009 and $1,263,900 in 2008. These amounts includeservices rendered and billed relating to the audit of our internal control overfinancial reporting and the related attestation report on the effectiveness ofinternal control over financial reporting as required by Section 404 ofthe Sarbanes-Oxley Act of 2002.

 

**Audit-RelatedFees**

 

There were no fees is fiscal 2009 or 2008 relating toassurance or related services regarding the performance ofPricewaterhouseCoopers LLP’s audit or review of our financial statements, otherthan those reported above under the caption “Audit Fees.”

 

**Tax Fees**

 

The aggregate feesPricewaterhouseCoopers LLP billed us in fiscal years 2009 and 2008 forprofessional services rendered for tax compliance, tax advice or tax planningwas $169,811 and $40,598, respectively.

 

**All OtherFees**

 

PricewaterhouseCoopers LLPdid not provide us, or bill us for, any products or services in the last twofiscal years, other than the services performed in connection with the feesreported under the captions “Audit Fees,” “Audit-Related Fees” and “Tax Fees”above.

 

**AuditCommittee Pre-Approval Policy**

 

The audit committee of ourboard of directors has adopted a policy requiring that all services provided tous by our approved independent registered accounting firm be pre-approved bythe audit committee. The policy pre-approves specific types of services thatthe independent registered accounting firm may provide us if the types ofservices do not exceed specified cost limits. Any type of service that is notclearly described in the policy, as well as any type of described service thatwould exceed the pre-approved cost limit set forth in the policy, must beexplicitly approved by our audit committee prior to any engagement with respectto that type of service. Our audit committee reviews the pre-approval policyand establishes fee limits annually, and may revise the list of pre-approvedservices from time to time.

 

Additionally, our auditcommittee delegated to its chairman the authority to explicitly pre-approveengagements with our independent registered accounting firm, provided that anypre-approval decisions must be reported to our audit committee at its nextscheduled meeting. If explicit pre-approval is required for any service, ourChief Financial Officer and our independent registered accounting firm mustsubmit a joint request to the audit committee, or its authorized delegate,describing in detail the specific services proposed and the anticipated costsof those services, as well as a statement as to whether and why, in their view,providing those services will be consistent with the SEC’s rules regardingauditor independence.

 

**PART IV**

 

**ITEM 15.  EXHIBITS ANDFINANCIAL STATEMENT SCHEDULES**

 

(a) The followingdocuments are filed as part of this report:

 

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

 

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

 

(3)               Exhibits — Thefollowing exhibits are filed or incorporated herein by reference as part ofthis report:

 

21

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| **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)                                                                                                                                                                                                                                                                                                               |
|                |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 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”))                                                                                                                                                                                                  |

 

22

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| 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”))                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 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)                                                                                                                     |

 

23

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| 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                                                                                                                                                                                                                     |
|---------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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)                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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 10.3 to the Quarterly Report on Form 10-Q  of PC Mall, Inc. (File No. 0-25790) for the period ended  September 30, 2009 filed with the Commission on November 9, 2009)                                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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 (incorporated herein by reference to Exhibit 10.37 to  the Annual Report on Form 10-K of PC Mall, Inc. (File  No. 0-25790) filed with the Commission on March 16, 2009)                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.38               |   | Lease Agreement, Executed By and Between SARCOM  Properties, Inc. and AF Services, LLC, effective January 1, 2010  (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 26, 2010)                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.39               |   | Renewal Letter, by and between WNI/Tennessee, L.P.  and AF Services, LLC, dated September 30, 2009 (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, 2009)                                                                                                                                                                       |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 21.1 ††   |   | Subsidiaries of PC Mall, Inc. as of  December 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                |

 

24

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| 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.                                                                                                                                           |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| +            |   | Confidential portions omitted and filed separately  with the U.S. Securities and Exchange Commission pursuant to Rule 24b-2  promulgated under the Securities Exchange Act of 1934, as amended. |
| †† |   | Previously filed as an  exhibit to the Registrant’s Form 10-K for the year ended  December 31, 2009 (File No. 0-25790) filed with the Commission  on March 16, 2010.   |

 

* * *

 

25

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**SIGNATURES**

** **

Pursuant to the requirementsof Section 13 or 15(d) of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|                      | PC MALL, INC. |
|---------------------------|---------------|
|                      | (Registrant)  |
|                      |          |
| Date: April 30, 2010 | By:           | /s/ FRANK F. KHULUSI |
|                      |          | Frank F. Khulusi |
|                      |          | Chairman of the Board,  President and |
|                      |          | Chief Executive Officer |

 

26

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**PCMALL, 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 |

 

27

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