REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for the
approval and administration of compensation programs for the Company's executive
The Compensation Committee endeavors to ensure that the compensation
programs for the Company's executive officers are effective in attracting and
retaining key executives responsible for the success of the Company and are
administered in an appropriate fashion in the long-term best interests of the
Company and its stockholders. The Compensation Committee seeks to align total
compensation for the Company's executive officers with the performance of the
Company and the individual performance of each executive officer in assisting
the Company in accomplishing its goals. The Company's compensation program
consists of (1) an annual component, which includes base salary and an annual
incentive bonus, and (2) a long-term component consisting of stock options,
stock appreciation rights, stock awards and cash awards. The Compensation
Committee takes into consideration the recommendations of management in awarding
compensation and setting compensation levels. The following is a report of the
Compensation Committee with respect to compensation policies and determinations
relating to 2001.
The Compensation Committee's policy with respect to 2001 base salaries for
executive officers was generally to keep them at appropriate levels in light of
a compensation survey in which the Company participated in 2000. The 2000
compensation survey was conducted for purposes of determining general
competitive compensation levels, and variations in performance between the
Company and companies included in the survey were not specifically evaluated.
The companies included in the survey are not the same as those included in the
Dow Jones Industrial Diversified Index referred to under "Stockholder Return
The determination of the base salaries for all the executive officers
during 2001 was based on the Compensation Committee's subjective evaluation and
did not involve application of objective measures of performance.
ANNUAL INCENTIVE BONUS
Bonuses were paid to executive officers for 2001 based on the subjective
evaluation of the performance of the Company and each executive.
COMPENSATION OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
The compensation policies described above apply to the compensation of the
Chairman of the Board and President and Chief Executive Officer. The
Compensation Committee is directly responsible for determining the salary level,
annual bonuses and all awards and grants to the Chairman of the Board and the
Chief Executive Officer. The Compensation Committee also gives consideration to
its assessment of past performance and its expectations of future contributions.
In the Compensation Committee's opinion, the salaries and bonuses of Mr. M.
Glazer and Mr. A. Glazer reflect their positions, duties, responsibilities with,
and contributions to the Company.
The Compensation Committee has considered the potential impact of Section
162(m) of the Code adopted under the Federal Revenue Reconciliation Act of 1993.
The Section disallows a tax deduction for any publicly-held corporation for
individual compensation exceeding $1 million in any taxable year for any of the
named executive officers, other than compensation that is performance-based. At
present, the Committee has not adopted an overall policy with respect to Section
162(m) because only an immaterial portion of the cash compensation of the
Chairman of the Board is above the $1 million threshold and the Company believes
that any options granted under the 1996 Long-Term Incentive Plan will meet the
requirement of being