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equity awards that have extended vesting periods. The purpose of these awards is to serve as both a retention tool
and incentive mechanism that will encourage recipients to remain with us and create value for both the award
recipient and our stockholders.
In the first quarter of fiscal 2011, our Compensation Committee considered the following factors in
establishing the base salary and long-term equity incentive compensation of our Named Executive Officers for
fiscal 2011:
Our overall operating performance during fiscal 2010 and the achievements of the Named Executive
Officers with respect to: (a) our overall performance; (b) the results of each division and whether such
division achieved its sales and/or expense goals; and (c) the results of each division as compared to the
budget for that division.
Individual performance appraisals of the Named Executive Officers and their contributions in
furtherance of our performance goals in fiscal 2010 and other objectives as established by our CEO and
the Compensation Committee, including a subjective evaluation of each Named Executive Officer's
(a) vision and strategic direction with respect to his or her individual business responsibilities;
(b) ability to inspire and influence others; (c) development of subordinates; (d) execution of assigned
tasks; and (e) ability to perform above and beyond the required scope and responsibilities of his or her
enumerated role.
The compensation packages for executives who have similar positions and levels of responsibility at
other companies in our industry peer group and relevant market benchmarking data.
Compensation Decision-Making
The Compensation Committee
The Compensation Committee is appointed by the Board to exercise the Board's authority to compensate
the executive management team and administer our stock-based and incentive compensation plans. The
Compensation Committee typically meets in separate sessions at least on a quarterly basis. In addition, the
Compensation Committee sometimes schedules special meetings or non-meeting "work sessions," either by
telephone or in person, as necessary to fulfill its duties. Meeting agendas are established by the chairperson after
consultation with other members of the Compensation Committee and Mr. Kartsotis, our CEO. The current
members of the Compensation Committee are Ms. Agather, who serves as chairperson, Ms. Neal, Ms. Ragusa
and Mr. Steinberg. Each of these Compensation Committee members served on the Compensation Committee
during all of fiscal 2011, other than Ms. Neal who was appointed to the committee in February 2012. The
Compensation Committee's full responsibilities with respect to our compensation practices are set forth in its
charter and described in more detail above under "Board Committees and Meetings--Compensation
Committee."
In late 2010, the Compensation Committee again engaged FWC to assist the Compensation Committee and
management in reviewing and determining appropriate, competitive compensation for our executive officers for
fiscal 2011. FWC also reviewed the design and competitiveness of the Company's non-employee director
compensation program. FWC has continued to provide to us, at our request, benchmarking, best practices and
other data relevant to our compensation programs and changes thereto. FWC did not provide any other services
to us in fiscal years 2010 or 2011.
Role of Executives in Establishing Compensation
Our CEO, other members of management (particularly the Head of HR), and Compensation Committee
members regularly discuss our compensation issues and the performance and retention of our Named Executive
Officers. Mr. Kartsotis with the assistance of the Head of HR typically recommends to the Compensation
Committee for its review, modification and approval the annual base salary, bonus and equity awards (if any) for
the other members of the executive management team.
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