COMPENSATION COMMITTEE REPORT 2005

Report of the Compensation Committee on Executive Compensation

        This Compensation Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporated this information by reference, and shall not otherwise be deemed filed under such Acts.

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        The Compensation Committee is currently comprised of Messrs. Butler, Knight and Subotky. The Compensation Committee reviews the recommendations of the Chief Executive Officer on the compensation levels of all other officers, reviews and approves changes to our compensation policies and practices and administers the Incentive Plan.

Compensation Philosophy and Review

        Our general compensation philosophy serves three principal purposes:

1.

to attract and retain qualified executives who will add to our long-term success;



2.

to link executive compensation to the achievement of our operational and strategic objectives; and



3.

to link executive compensation with each executive's performance, level of responsibility and overall contribution to our success.

        Base Salary.    In 2004, the Compensation Committee recommended to the Board, and the Board approved, an increase in the base salaries for Messrs. Coon, Bethers, McCallum, Mullis and Zeidner. Mr. Bethers joined the Company in July 2003, and Mr. Mullis joined the Company in December 2002. The previous base salaries for such executives (other than Messrs. Bethers and Mullis) were established in 2003 when the Compensation Committee recommended to increase their salaries from the previous base salary set in 2002. See "Executive Compensation and Other Matters—Employment Agreements." The total of base salary and bonus for each of these executive officers was increased in order to bring such compensation arrangements in line with market conditions and to reward such executives for their continued strong performance. Overall, Messrs. Coon, Bethers, McCallum, Mullis and Zeidner received an increase in total cash compensation in 2004 of approximately 1.0%, 37.8%, 9.5%, 8.3%, and 16.1%, respectively, as compared to 2004.

        Annual Bonus.    Messrs. Coon, Bethers, McCallum, Mullis and Zeidner are entitled to receive an annual bonus based on our achievement of certain targeted operating results, which are established by the full Board. The amount of bonus that such executive officer is eligible to earn is also established by the Board, which is subject to increase based on achievement beyond targeted levels. In general, the targeted operating results are determined based upon net sales and operating income. For the most part, executive officers achieved their individual performance objectives and were awarded bonuses accordingly.

        Long-Term Equity Incentives.    The long-term equity incentive currently utilized by the Committee is stock option and restricted stock grants. The Committee believes that stock option awards and restrictive stock grants are an effective incentive for our management to create value for our stockholders since the ultimate value of the stock options and restrictive stock bear direct relationship to the market price of the common stock. Executive officers are generally granted stock options and/or restrictive stock on an annual basis. The overall level of grants made to the executive officers is based on an assessment of their impact on our operating results. For fiscal 2004, the Committee recommended, and the full Board approved, the grant to the executive officers of options to purchase an aggregate of 34,054 shares of common stock, or 23.6% of the options granted in 2004 as part of our annual option grant program. As of April 2, 2005, 27,549 shares of restricted stock and options to purchase an aggregate of 1,254,940 shares of common stock were outstanding under the Incentive Plan

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and options to purchase an aggregate of 143,611 shares of common stock were outstanding from options granted prior to the establishment of the Incentive Plan.

        The foregoing report has been approved by all members of the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

        The Compensation Committee is composed of three directors appointed by the Board, each of whom is independent under applicable NASD listing rules. No member of the Compensation Committee: (i) was, during our last fiscal year, an officer or employee of the Company or any of its subsidiaries; (ii) was formerly an officer of the Company or any of its subsidiaries; or (iii) had any relationship requiring disclosure under Item 404 of Regulation S-K. The Compensation Committee operates under a written charter adopted by the Board in fiscal 2001 and amended and restated in fiscal 2003.

-- Proxy Statement April 2005