During the past year, we focused on enriching our brand portfolio and product lines. To this end, we embarked on a number of critical strategic investments, including our acquisitions of Thomas Plant (Birmingham) Limited (trading as KitchenCraft), one of the largest kitchenware companies in the United Kingdom; Empire Silver Company, a manufacturer of sterling silver and pewter giftware; La Cafetière, a designer and distributor of products to brew and serve coffees and teas; and Built NY, a designer and distributor of neoprene products,

including bags, totes, cases and sleeves. In March 2014, we launched Reo™, a proprietary kitchenware brand specializing in stylish, easy-to-use kitchen tools. We also significantly expanded the product line of Savora™, our design-oriented brand that has won awards in the design critique community. Going forward, we are poised to take advantage of our investments in these and other trusted brands, and expect that our strategic initiatives will enhance stockholder value.

Jeffrey Siegel serves as Chairman of our Board of Directors and our Chief Executive Officer. Mr. Siegel has served the Company in various capacities and has been one of our directors since 1967 and is our largest individual stockholder. Mr. Siegel provides effective leadership and guidance as our Chairman of the Board in the development and pursuit of our strategic goals, recognition of business opportunities that present themselves and our risk profile.

John Koegel serves as the lead independent director. The duties of the lead independent director include:

Our Board of Directors is composed of ten directors, seven of whom are independent of the Company. Our independent directors, and our governance practices, provide effective and independent oversight of management. The independent directors meet in periodic executive sessions, the results of which are discussed by the lead independent director with the Chief Executive Officer.

STOCK OWNERSHIP GUIDELINES

Effective July 31, 2012, our Board adopted stock ownership guidelines applicable to our directors. Under these guidelines, a director must, on or prior to the compliance deadline, own shares of our stock with a value in an amount equal to or in excess of three times the non-employee director annual cash retainer, with such value determined at the time of the receipt of the stock based on the amount paid or contributed by the director for the stock. The compliance deadline is five years after the director’s election to our Board. For purpose of the stock ownership guidelines, unexercised stock options are not considered in calculating stock ownership but restricted shares are included at the time the restriction lapses. All our directors are in compliance with the stock ownership guidelines.

BOARD OVERSIGHT OF RISK

Our Board of Directors bears the responsibility for maintaining oversight over our exposure to risk. Our Board, itself and through its committees, meets with various members of management regularly and discusses our material risk exposures, the potential impact on us and the efforts of management it deems appropriate to deal with the risks that are identified. The Audit Committee considers our risk assessment and risk management practices including those relating to regulatory risks, financial liquidity and accounting risk exposure, reserves and our internal controls. The Nominating and Governance Committee considers the risks associated with our corporate governance principles and procedures with the guidance of corporate and outside counsel. Our Compensation Committee, in connection with the performance of its duties, considers risks associated with our compensation programs.

CODE OF ETHICS

We have adopted a Code of Ethics, as supplemented by a Code of Conduct, which applies to all of our directors, officers (including our Chief Executive Officer, Chief Financial

Officer and Controller) and employees.

A copy of our Code of Ethics can be found on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.

BOARD AND COMMITTEE MEETINGS; ATTENDANCE

All directors who served as directors at the time attended our 2014 Annual Meeting of Stockholders. Directors are expected, but not required, to attend the Annual Meeting of Stockholders. Our Board holds meetings on at least a quarterly basis and more often, if necessary, to fulfill its responsibilities. Our Board held six regularly scheduled meetings and one special meeting, or a total of seven meetings, during the fiscal year ended December 31, 2014. During the 2014 fiscal year, each director attended a minimum of 75% of the meetings of the Board and committees on which the director served.

STOCKHOLDER COMMUNICATION WITH DIRECTORS

Stockholders who wish to communicate with members of our Board, including the independent directors, individually or as a group, may send correspondence to them care of the Secretary at our principal office, 1000 Stewart Avenue, Garden City, New York 11530. Alternatively, the directors may be contacted via e-mail at BoardofDirectors@lifetimebrands.com.

BOARD NOMINATION PROCESS

Our Board of Directors nominates candidates to serve as directors based on recommendations of the Board’s Nominating and Governance Committee.

Our Nominating and Governance Committee’s procedures for identifying and evaluating candidates include requests for candidate recommendations from within the housewares industry and from outside independent professional advisors, as the case may be. In selecting a director nominee, our Nominating and Governance Committee focuses on skills, expertise and background that would complement those of the existing members of our Board, recognizing the nature of our business.

Directors are elected annually by our stockholders and serve until the next annual meeting of the stockholders and until their successors have been elected and qualified or until their earlier resignation or removal.

Our Board has adopted, as a governance principle, a majority voting standard for uncontested director elections and a plurality voting standard for contested elections. Therefore, when the number of director nominees exceeds the number of board seats, a plurality voting standard shall apply. Any director elected by a plurality voting standard, as provided for in our By-laws, at an annual meeting of our stockholders in an uncontested election that does not receive a majority of the votes cast at such annual meeting shall submit his or her resignation to our Board. Our Board shall then, in its sole judgment and discretion, within 90 days from submission of such director’s resignation, determine whether to accept or

reject such director’s resignation. If our Board rejects the director’s resignation, then we shall prepare and file a Form 8-K to explain our Board’s rationale for rejecting such director’s resignation.

NOMINATING AND GOVERNANCE COMMITTEE

Our Nominating and Governance Committee is composed of all seven of our independent directors: John Koegel (Chair), David E. R. Dangoor, Michael J. Jeary, Cherrie Nanninga, Dennis E. Reaves, Michael J. Regan and William U. Westerfield. The Nominating and Governance Committee held four meetings in 2014.

Our Nominating and Governance Committee has the following responsibilities:

Our Nominating and Governance Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.

STOCKHOLDER NOMINATION PROCESS

Although our Nominating and Governance Committee has not adopted a policy on stockholder nominations of director candidates, under our By-laws, any stockholder of record (both as of the time notice of such nomination is given and as of the record date) of the Company who is entitled to vote at a meeting may nominate candidates for election as directors. Any such stockholder who seeks to make such a nomination, or its representative, must be present in person

at the meeting. Notice of nomination must be given in writing to our Secretary, which must be received by us not less than 90 calendar days nor more than 120 calendar days prior to the anniversary of the prior year’s annual meeting. The form of the notice must include the requirements in Section 2.9 of our By-laws.

There are no differences in the manner in which our Nominating and Governance Committee evaluates a candidate for director, whether an individual is recommended by a stockholder or otherwise.

BOARD DIVERSITY

Our diversity policy provides that, while diversity and the variety of experiences and viewpoints represented on our Board should always be considered, a director nominee should not be chosen nor excluded because of race, color, gender, national origin or sexual orientation or identity. Our Nominating and Governance Committee assesses the effectiveness of the diversity policy by periodically reviewing the skills, expertise and background of each of the existing members of our Board to determine whether it may be appropriate to add individuals with different backgrounds or skill sets from those existing members of our Board.

AUDIT COMMITTEE

Our Audit Committee is composed of four directors, each of whom is independent, as required by the Audit Committee charter, the Securities Exchange Act of 1934 and the listing requirements for The NASDAQ Stock Market, LLC and the SEC rules. The current members are William U. Westerfield (Chair), David E. R. Dangoor, Cherrie Nanninga and Michael J. Regan. Our Board has determined that William U. Westerfield and Michael J. Regan are “Audit Committee Financial Experts,” as defined by the SEC rules. The Audit Committee held four meetings during 2014.

Our Audit Committee, among other things:

Our Audit Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.

STRATEGIC PLANNING COMMITTEE

Our Strategic Planning Committee is composed of five directors. The current members are Michael J. Jeary (Chair), John Koegel, David E. R. Dangoor, Dennis E. Reaves and Jeffrey Siegel. Our Strategic Planning Committee held two meetings in 2014.

Our Strategic Planning Committee, among other things, provides assistance to our Board in fulfilling its responsibilities to our stockholders with respect to the following:

Our Strategic Planning Committee regularly receives updates from the Chairman of our Board and Chief Executive Officer and, from time to time, meets with our Division Presidents.

Our Strategic Planning Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.

COMPENSATION COMMITTEE

Our Compensation Committee is composed of three directors, each of whom is independent. The current members are Cherrie Nanninga (Chair), John Koegel and Michael J. Jeary. Our Compensation Committee held eight meetings during 2014.

Our Compensation Committee advises our Board with

respect to our compensation practices and administers our 2000 Incentive Bonus Compensation Plan and our 2000 Long-Term Incentive Plan.

The principal duties and responsibilities of our Compensation Committee include:

Our Compensation Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.

EXECUTIVE SESSIONS

The independent directors meet at regularly scheduled executive sessions without members of management present.

COMPENSATION PHILOSOPHY AND OBJECTIVES

Our compensation program has historically been designed to attract, reward and retain capable executives and to provide incentives for the attainment of short-term performance objectives and strategic long-term performance goals. A number of key principles guide management and our Compensation Committee in determining compensation for hiring, motivating, rewarding and retaining executive officers who create both short- and long-term stockholder value for us, including:

In an effort to balance the need to retain executive talent

yet motivate executives to achieve superior performance, we have adopted a compensation philosophy that contains both fixed and variable elements of compensation. Our compensation philosophy is to reward executives with compensation aligned with our short-term and long-term financial goals and the establishment of performance targets that do not promote excessive risk-taking. The elements of our total executive compensation are base salary, cash bonus and stock incentives. The compensation program was designed to create a substantial percentage of variable compensation for executives, subject to increases or decreases based on the attainment of specified achievements and targets. Consistent with our goal of linking pay and performance, the performance-based compensation of our Chief Executive Officer and Chief Operating Officer amounted to 33% and 45%, respectively, of their total compensation for 2014.

Our Compensation Committee uses its judgment in allocating compensation between long- and short-term incentives and cash and non-cash components. Although long-term incentive is considered of great significance in aligning performance with stockholder interests, it has traditionally been a smaller component of aggregate compensation.

Our Compensation Committee has the authority to review and approve compensation principles that apply generally to our executive and senior employees. Our Compensation Committee reviews corporate goals and objectives relevant to the compensation of our Chief Executive Officer and our Chief Operating Officer, evaluates their performance in light of the established goals and objectives and approves their annual compensation. It also reviews the corporate goals and objectives established by our Chief Executive Officer and our Chief Operating Officer relevant to the compensation of all other executive officers and all direct reports of the Chief Executive Officer and Chief Operating Officer. Based primarily on the evaluations and recommendations of our Chief Executive Officer and our Chief Operating Officer of the performance of such executive officers and direct reports in light of the established goals and objectives, our Compensation Committee approves their annual compensation. It also reviews the evaluation process and compensation structure for the other members of our senior management and provides oversight regarding management’s decisions concerning the performance and compensation of such members of senior management. Our Compensation Committee relies on reports of its independent compensation consultant, Pearl Meyer & Partners, as to the elements of compensation among our peer group of companies (discussed under Role of Compensation Consultant) and the proportion of each component relative to the total compensation.

Our named executive officers (“NEOs”) are:

ROLE OF COMPENSATION CONSULTANT

Our Compensation Committee has engaged Pearl Meyer & Partners as its independent outside compensation consultant to provide services related to executive and non-employee director compensation. Pearl Meyer & Partners does not provide us with other services unless approved by our Compensation Committee.

Pearl Meyer & Partners assists our Compensation Committee in its evaluation of our compensation philosophy and with the development of relevant metrics used by our Compensation Committee to assure internal equity and market parity. It also provides compensation benchmark data and information relative to our peer group. Pearl Meyer & Partners developed a peer group of companies with characteristics generally comparable to our revenue and market capitalization for review and approval by our Compensation

Committee. The peer group companies used in the analysis are:

Our Compensation Committee believes that the companies included in the peer group are the most comparable public companies; however, most of our direct competitors are either smaller, international or privately-held. Our Compensation Committee considers the competitive data compiled by Pearl Meyer & Partners as reference points, but does not “benchmark” to specific pay levels when establishing goals and objectives relevant to our compensation policy. In 2014, Pearl Meyer & Partners provided competitive data and a market analysis, which was used by our Compensation Committee in evaluating executive compensation.

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, our Compensation Committee analyzed whether the services of Pearl Meyer & Partners could result in any conflicts of interest, giving consideration to the following factors:

Our Compensation Committee has determined, based on its own analysis, that the services of Pearl Meyer & Partners, including the individual compensation advisors employed by it, have not created any conflicts of interest. On an annual basis, our Compensation Committee will continue to monitor the independence of its compensation consultant.

ELEMENTS OF NEO COMPENSATION

Salary

Salary is intended to compensate the executive for performance of core job responsibilities and duties.

The salaries of Jeffrey Siegel and Ronald Shiftan are fixed by employment agreements that were negotiated between Messrs. Siegel and Shiftan, respectively, and our Compensation Committee. The amount and components of aggregate compensation for comparable positions in our peer group of companies as well as the preferences of Messrs. Siegel and Shiftan were taken into account by our Compensation Committee in determining their compensation.

In determining Mr. Siegel’s compensation, our Compensation Committee took into account Mr. Siegel’s long-standing executive role with us, his extensive knowledge of and experience in the housewares industry and his role in directing our growth. Our Compensation Committee views Mr. Siegel as one of the most experienced and successful executives in the housewares industry. Our Compensation Committee also reviewed the amount and composition of compensation being paid to other chief executive officers among our peer group of companies (discussed under Role of Compensation Consultant) having the depth of experience, knowledge and industry awareness possessed by Mr. Siegel.

In determining Mr. Shiftan’s compensation, our Compensation Committee took into account his significant role in developing, structuring and implementing our growth and acquisition strategies. Our Compensation Committee also considered Mr. Shiftan’s role in assisting Mr. Siegel in various aspects of our business.

The salaries of Daniel Siegel, Craig Phillips and Laurence Winoker are set forth in their employment agreements with us. The employment agreements were negotiated between Messrs. Siegel, Phillips and Winoker, respectively, with the Chief Executive Officer and the Chief Operating Officer, in consultation with our Compensation Committee. The salaries set forth in their employment agreements were determined by the Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, taking into consideration their roles and responsibilities within the Company, as well as the amount and components of aggregate compensation for comparable positions in our peer group of companies.

Non-Equity Incentive Plan Compensation

Non-equity incentive plan compensation is intended to compensate an executive for achievement of specific performance goals for a specified performance period.

Jeffrey Siegel and Ronald Shiftan receive cash bonuses based on certain targets established pursuant to their respective employment agreements that are based on earnings before interest and taxes adjusted for certain items, and individual goals as more fully described below. Cash bonuses were awarded to Messrs. Jeffrey Siegel, Shiftan,

Daniel Siegel, Phillips and Winoker pursuant to the Company’s Amended 2000 Incentive Bonus Compensation Plan (the “Amended 2000 Bonus Plan”).

The purpose of the Amended 2000 Bonus Plan is: (i) to retain and motivate our key executives who have been designated as participants in this plan for a given performance period by providing them with the opportunity to earn bonus awards that are based on specified performance goals for the specified performance period and (ii) to structure bonus opportunities in a way that will qualify the awards as “performance-based” for purposes of Section 162(m) of the Internal Revenue Code (the “Code”) so that we will be entitled to a tax deduction for the payment of such incentive bonus awards to the designated participants.

Our Compensation Committee has determined that Adjusted IBIT best measures the efforts and productivity of Messrs. Jeffrey Siegel, Shiftan, Daniel Siegel and Winoker, and that EPS is a meaningful measure of the performance of Mr. Phillips. The term “Adjusted IBIT,” as it applies to any particular year, means that amount for such year equal to the Company’s income before income taxes and equity in earnings, as reported in our Form 10-K, subject to such adjustments as are set forth in the Adjusted IBIT Performance Bonus Table for such year. The term “EPS” means basic reported earnings per share.

In determining to use Adjusted IBIT and EPS as performance measures for the purpose of the Amended 2000 Bonus Plan, our Compensation Committee was also guided by the extent to which these measures are within the control of the respective named executive officer. For the purpose of establishing the target Adjusted IBIT or EPS for the named executive officers entitled to cash bonus incentive awards in a given year, our Compensation Committee relied on Pearl Meyer & Partners, our Compensation Committee’s independent outside compensation consultant, as to benchmarks among our peer group of companies. Our Compensation Committee also relied on our annual budget in establishing the threshold, target and maximum bonus tied to achievement of these targets for the Chief Executive Officer and Chief Operating Officer and for the other NEOs.

In addition to Adjusted IBIT, individual goals are established for Messrs. Jeffrey Siegel and Shiftan by our Compensation Committee. With respect to Messrs. Phillips, Winoker and Daniel Siegel, individual goals based on financial and performance objectives are established by the Chief Executive Officer and Chief Operating Officer in consultation with our Compensation Committee. The individual goals of each of the NEOs for 2014 are discussed below. At the end of the fiscal year, Messrs. Jeffrey Siegel and Shiftan prepare written materials for our Compensation Committee with their respective assessments of whether their individual goals have been achieved during the year. Our Compensation Committee reviews these materials and assesses independently the extent to which their individual goals were achieved.

As permitted by our 2000 Long-Term Incentive Plan, approximately 60% of the cash incentive compensation payable to

Messrs. Jeffrey Siegel, Shiftan, Daniel Siegel and Winoker in respect of fiscal year 2014 was paid in the form of shares of our common stock at the closing price therefor on the date of grant.

As set forth in detail in the table below, the target performance metric for the 2014 fiscal year for Adjusted IBIT was $29.07 million and $1.33 for EPS. We achieved an Adjusted IBIT of $17.9 million and an EPS of $0.11 for the 2014 fiscal year.

Jeffrey Siegel

Jeffrey Siegel’s employment agreement entitles him to receive (a) an Annual Adjusted IBIT Performance Bonus at a target of 100% of salary based on an Adjusted IBIT Performance Bonus Table prepared by our Compensation Committee and the annual budget reviewed and approved by our Board of Directors and (b) an Annual Individual Goal Bonus based on certain measurable objectives (discussed below for 2014). Pursuant to Mr. Siegel’s employment agreement, the threshold Adjusted IBIT for any such year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 200% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 200% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. The employment agreement also provides that the Adjusted IBIT Performance Bonus for any such year would be zero if the Adjusted IBIT we achieved for such year was less than the threshold Adjusted IBIT for such year.

Mr. Siegel’s employment agreement further entitles him to receive an Annual Individual Goal Bonus equal to 25% of his salary for such year based on meeting individual measurable performance objectives set by our Compensation Committee in consultation with Mr. Siegel. If Mr. Siegel satisfies at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to 12.5% of his salary for such year. If Mr. Siegel meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus for such year.

Mr. Siegel’s individual goals included: the expansion of our international focus; development of a comprehensive plan to grow market share in certain of our product lines by growing outside the U.S. and in under-penetrated retailers within the U.S.; integration of the Built NY business (which we acquired March 2014) into the Company; expansion of certain existing brands; update of our succession plan, given the

expansion in our international business; and the reduction of the loss of the Home Décor business. Our Compensation Committee evaluated Mr. Siegel’s achievement of his individual performance objectives and determined that the objectives were met at target.

For 2014, Mr. Siegel was awarded a total bonus of $865,757, based upon the attainment of the 2014 performance objectives. For the year ended December 31, 2014, the Adjusted IBIT amounted to $17.9 million, resulting in a 61.6% of target payment opportunity. The details of the full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.

Ronald Shiftan

Mr. Shiftan’s second amended and restated employment agreemententitles Mr. Shiftan to receive (a) an Annual Adjusted IBIT Performance Bonus at a target of 90% of salary based on an Adjusted IBIT Performance Bonus Table prepared by our Compensation Committee and the annual budget reviewed and approved by our Board of Directors and (b) an Annual Individual Goal Bonus based on certain measurable objectives (discussed below for 2014). Pursuant to the second amended and restated employment agreement, the threshold Adjusted IBIT for any such year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Shiftan to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 200% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Shiftan to receive 200% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. The second amended and restated employment agreement also provides that the Adjusted IBIT Performance Bonus for any such year would be zero if the Adjusted IBIT we achieved for such year was less than the threshold Adjusted IBIT for such year.

Mr. Shiftan’s second amended and restated employment agreement further entitles him to receive an Annual Individual Goal Bonus equal to 15% of his salary for such year based on meeting individual measurable objectives set by the Chief Executive Officer and monitored by our Compensation Committee. If Mr. Shiftan satisfies at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to at least 7.5% of his salary for such year. If Mr. Shiftan meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus for such year.

Mr. Shiftan’s individual goals included: identifying and pursuing opportunities to manufacture products in North America; driving our benchmarking project with the goal of reducing

Selling, General and Administrative expenses as a percentage of net sales; identifying new systems to reduce costs; consolidating the Company’s distribution centers in the United Kingdom; leading a “Future Stars” project to provide enhanced training and career development opportunities for our employees; upgrading our business operating system; relocating our customer call center and implementing new order management systems; expanding our in-house legal capacity; pursuing merger and acquisition opportunities for us; and monitoring and providing solutions to improve coordination and enhance profitability at our international affiliate and partner companies. Our Compensation Committee evaluated Mr. Shiftan’s achievement of his individual performance objectives and determined that the objectives were met at target.

For 2014, Mr. Shiftan was awarded a total bonus of $457,718, based on the attainment of the 2014 performance objectives. For the year ended December 31, 2014, Adjusted IBIT amounted to $17.9 million, resulting in a 61.6% of target payment opportunity. The details of the full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.

Daniel Siegel

Since Mr. Siegel entered into an employment agreement with us during the year, therefore, pursuant to Mr. Siegel’s employment agreement, dated as of November 29, 2014, as amended, Mr. Siegel was provided with two Adjusted IBIT Performance Bonus Tables from the effective date of his employment agreement through December 31, 2014. Under the First Adjusted IBIT Performance Bonus Table, Mr. Siegel would be entitled to an Annual Adjusted IBIT Performance Bonus at a target of 46.875% of his base salary of $450,000, which was in effect prior to the effective date of his employment agreement, as amended, based on the First Adjusted IBIT Performance Bonus Table. Under the First Adjusted IBIT Performance Bonus Table, the threshold Adjusted IBIT for the 2014 year was 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the First Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 150% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 200% of the target bonus for such year, consistent with the First Adjusted IBIT Performance Table for such year. Under the Second Adjusted IBIT Performance Bonus Table, Mr. Siegel would be entitled to an Annual Adjusted IBIT Performance Bonus at a target of 75% of his base salary of $475,000, which became effective as of the effective date of his employment agreement, as amended, based on the Second Adjusted IBIT Performance Bonus Table. Under the Second Adjusted

IBIT Performance Bonus Table, the threshold Adjusted IBIT for the 2014 year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the Second Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 150% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 150% of the target bonus for such year, consistent with the Second Adjusted IBIT Performance Table for such year. The employment agreement, as amended, also provides that Mr. Siegel is entitled to receive sliding scale percentages of the target bonus set forth in each of the First and the Second Adjusted IBIT Performance Tables based upon Adjusted IBIT being more than the threshold Adjusted IBIT but less than the target Adjusted IBIT, or more than the target Adjusted IBIT but less than the maximum Adjusted IBIT. Pursuant to Mr. Siegel’s employment agreement, as amended, for the year ending December 31, 2014, Mr. Siegel shall be entitled to receive an Adjusted IBIT Performance Bonus equal to the sum of the following amounts: (A) Seven-twelfths (7/12) of that amount equal to the Adjusted IBIT Performance Bonus that Mr. Siegel would be to entitled to receive if such bonus is calculated based solely on the First Adjusted IBIT Performance Bonus Table, plus (B) Five-twelfths (5/12) of that amount equal to the Adjusted IBIT Performance Bonus that Mr. Siegel would be entitled to receive if such bonus is calculated based solely on the Second Adjusted IBIT Performance Bonus Table.

Commencing with the year ending December 31, 2015 and thereafter, the employment agreement, as amended, provides for Mr. Siegel to be entitled to an Annual Adjusted IBIT Performance Bonus at a target of 75% of his base salary payable to Mr. Siegel for such year, based on the Adjusted IBIT Performance Bonus Table for such year as prepared by the Chief Executive Officer and Chief Operating Officer and delivered to Mr. Siegel. Pursuant to Mr. Siegel’s employment agreement, as amended, the threshold Adjusted IBIT for years 2015 and thereafter would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 150% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 150% of the target bonus for such year, consistent with the Adjusted IBIT Performance Table for such year. Mr. Siegel is entitled to receive sliding scale percentages of the target bonus set forth in the Adjusted IBIT Performance Table based upon Adjusted IBIT being more than the threshold Adjusted IBIT but less than the target Adjusted IBIT, or more than the target Adjusted IBIT but less than the maximum Adjusted IBIT.

Mr. Siegel’s employment agreement, as amended, also provides that the Adjusted IBIT Performance Bonus for 2014 under both the First Adjusted IBIT Performance Bonus Table and the Second Adjusted IBIT Performance Bonus Table inrespect of 2014 and the Adjusted IBIT Performance Bonus

for years 2015 and thereafter will be zero if the Adjusted IBIT achieved by the Company for any such year is less than the threshold Adjusted IBIT for such year, and in no event will an Adjusted IBIT Performance Bonus for any such year be more than the maximum target bonus for such year even if the Adjusted IBIT achieved by the Company for such year exceeds the maximum Adjusted IBIT for such year.

Mr. Siegel’s employment agreement, as amended, further entitles him to receive an Annual Individual Goal Bonus. For the year ending December 31, 2014, Mr. Siegel would be entitled to receive an Annual Individual Goal Bonus equal to the sum of the following amounts: (A) Seven-twelfths (7/12) of that amount equal to 31.25% of his base salary ($450,000) in effect for 2014 prior to the effective date of his employment agreement for such year, plus (B) Five-twelfths (5/12) of that amount equal to 37.5% of the base salary ($475,000) in effect for the last five months of 2014, which represents the period in 2014 after the effective date of his employment agreement, based on meeting individual measurable objectives set by the Chief Executive Officer and Chief Operating Officer in consultation with Mr. Siegel, as determined by the Chief Executive Officer and the Chief Operating Officer in their sole discretion; provided, however, if, in the sole discretion of the Chief Executive Officer and the Chief Operating Officer, (y) Mr. Siegel meets at least 50% of such objectives, he shall be entitled to an Annual Individual Goal Bonus equal to not less than 15.625% of his base salary (in regard to clause (A) above) and 18.75% of his base salary (in regard to clause (B) above), for such year, and (z) Mr. Siegel meets less than 50% of such objectives, he shall not be entitled to receive any Annual Individual Goal Bonus for such year.

Commencing with the year ending December 31, 2015, Mr. Siegel shall be entitled to receive an Annual Individual Goal Bonus equal to 37.5% of his Base Salary for such year based on meeting individual measurable objectives set by the Chief Executive Officer and the Chief Operating Officer in consultation with Mr. Siegel, as determined by the Chief Executive Officer and the Chief Operating Officer in their sole discretion; provided, however, if, in the sole discretion of the Chief Executive Officer and the Chief Operating Officer, (y) Mr. Siegel meets at least 50% of such objectives, he shall be entitled to an Annual Individual Goal Bonus equal to not less than 18.75% of his Base Salary for such year and (z) Mr. Siegel meets less than 50% of such objectives, he shall not be entitled to receive any Annual Individual Goal Bonus for such year.

Mr. Siegel’s individual goals included: fulfilling his oversight responsibility for development of innovation in all areas of the Company, including design, marketing and trends; fulfilling his responsibility for our trade shows and showrooms in order to enhance our strong position in the market; increasing our brand development; identifying strategic opportunities to achieve international growth; expanding our strategic plan; and increasing his involvement in human resources and sales. No cash bonus was to be payable to Mr. Siegel if we had less than $8 million in net income and the amount payable in connection with individual goals was subject to

adjustment if we earned less than $10 million. Our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, evaluated Mr. Siegel’s achievement of his individual performance objectives and determined that the objectives were met at target.

For 2014, Mr. Siegel was awarded a total bonus of $323,418, based upon the attainment of the 2014 performance objectives. For the year ended December 31, 2014, Adjusted IBIT amounted to $17.9 million, resulting in a 61.6% of target payment opportunity. The details of the full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.

Craig Phillips

Mr. Phillips retired and resigned as our Senior Vice-President – Distribution, effective January 2, 2015.

Mr. Phillips’ employment agreement provided for an annual bonus determined by our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee of our Board of Directors.

For 2014, Mr. Phillips was entitled to receive a performance bonus based on an earnings target and individual performance objectives that were established at the beginning of the year. The earnings target and performance objectives were determined by our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee.

For 2014, Mr. Phillips was entitled to receive an EPS bonus at a target of 10% of his salary for such year and at a maximum of 20% of his salary for such year, based on achievement of an earnings target and maximum for EPS. Mr. Phillips was also entitled to receive an individual bonus at a target of 15% of his salary for such year and at a maximum of 30% of his salary for such year, based on meeting individual measurable objectives set forth below.

Mr. Phillips’ individual goals included: the development of a new facility plan for the U.K. businesses that included combining operations and using one warehouse management system; negotiation of a renewal of our lease for our warehouse and distribution center in Robbinsville, New Jersey; and the upgrade of our distribution center systems. No cash bonus was to be payable to Mr. Phillips if we had less than $8 million in net income and the amount payable in connection with individual goals was subject to adjustment if we earned less than $10 million. Our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, evaluated Mr. Phillips’s achievement of his individual performance objectives and determined that the objectives had been met at target.

For 2014, Mr. Phillips was awarded a total bonus of $54,000, based upon the attainment of the 2014 individual performance objectives, established at the beginning of the year. For the year ended December 31, 2014, EPS amounted to $0.11 per share, which resulted in no bonus award paid to Mr. Phillips for EPS. The details of the full bonus payment oppurtunity (including the individual target bonus oppurtunity) are provided in the table below.

Laurence Winoker

Mr. Winoker’s employment agreement provides for a performance bonus based on performance objectives set forth in writing at the beginning of each calendar year during the term of his employment under the employment agreement.

For 2014, Mr. Winoker was entitled to receive a performance bonus based on an earnings target and individual performance objectives that were established at the beginning of the year. The earnings target and performance objectives were determined by our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee.

For 2014, Mr. Winoker was entitled to receive an Adjusted IBIT bonus at a target of 37.5% of his salary for such year and at a maximum of 75% of his salary for such year, based on achievement of an earnings target and maximum for Adjusted IBIT. Mr. Winoker was also entitled to receive an individual bonus at a target of 25% of his salary for such year and at a maximum of 25% of his salary for such year, based on meeting individual measurable objectives set forth below.

Mr. Winoker’s individual goals included: the improvement of our income tax rate and implementation of further tax savings strategies; increase of staffing positions, including strengthening the financing staff and succession planning; fulfillment of his responsibility in the financial reporting of KitchenCraft (acquired in January 2014) and La Cafetière (acquired in March 2014). No cash bonus was to be payable to Mr. Winoker if we had less than $8 million in net income and the amount payable in connection with individual goals was subject to adjustment if we earned less than $10 million. Our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, evaluated Mr. Winoker’s achievement of his individual performance objectives and determined that the objectives were met at target.

For 2014, Mr. Winoker was awarded a total bonus of $204,386, based upon the attainment of the 2014 performance objectives. For the year ended December 31, 2014, Adjusted IBIT amounted to $17.9 million, resulting in a 61.6% of target payment opportunity. The details of the full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.

Stock Options and Stock Awards

Stock option and stock award compensation are intended to incentivize employees and to promote a closer identity of interest between our employees and our stockholders. Additionally, stock options are also aimed at retention as the vesting period, generally ranges from three to five years. Restricted stock awards are also aimed at retention as the restrictions lapse over a period, generally, ranging from one to three years.

Our Compensation Committee granted stock options to Jeffrey Siegel, Ronald Shiftan and Laurence Winoker in connection with their entering into their respective employment agreements. Our Compensation Committee granted restricted shares to Daniel Siegel in connection with him entering into his employment agreement. In addition, each NEO generally receives stock options once a year in connection with annual performance reviews based on an assessment of such person’s individual performance and, where appropriate, the performance of such person’s business unit (division), as well as our overall performance and the dilutive effect of the stock options. Stock option awards to NEOs in 2014 were not based on any pre-established quantitative performance metrics. In determining the number of stock options to be granted to employees, our Chief Executive Officer and our Chief Operating Officer annually develop a list of employees who are paid a salary of more than $200,000 a year (excluding themselves). The entire number of stock options to be granted in a year, which is generally options to purchase in the range of 250,000 to 350,000 shares of our stock, are divided into tiers of share increments which are allocated based on the salary levels of the employees on the list. Certain high performing, high-potential employees who earn a salary of less than $200,000 a year are added to the list at the discretion of our management. Stock option share grants are then proposed for individual employees by our Chief Executive Officer and our Chief Operating Officer in consultation with our human resources department. The list of proposed stock option share grants is then submitted to our Compensation Committee, which reviews and discusses the list with management. Additionally, our Compensation Committee determines the number of stock option shares to be granted to our Chief Executive Officer and our Chief Operating Officer, in line with the number of stock option shares granted to other employees. The grant date fair value of annual option awards granted to the NEOs in 2014, 2013 and 2012 represented 5% to 16% of the NEOs’ total compensation.

Stock options and restricted shares granted in 2014, 2013 and 2012 were granted pursuant to our 2000 Long-Term Incentive Plan, as amended (the “2000 Plan”). Under the 2000

Plan, awards for up to 4,200,000 shares of our common stock may be granted by our Board of Directors, or a duly appointed committee thereof, to directors, officers, employees, consultants and other service providers to us and our affiliates in the form of stock options or other equity-based awards. At December 31, 2014, 296,362 shares of the total 4,200,000 shares authorized under the 2000 Plan were available for awards that could be granted. At the Annual Meeting, we will seek stockholder approval for the Amended and Restated 2000 Long-Term Incentive Plan, which, among other things, will increase this limit to 4,850,000 shares.

Subsequent to December 31, 2014, we cancelled options to purchase 35,000 shares of common stock, issued 117,154 shares of common stock and issued 1,471 shares of restricted common stock. As of April 30, 2015, 212,737 shares were available under the 2000 Plan.

Other Compensation

We maintain a defined contribution 401(k) plan for all employees, including the NEOs. We suspended our matching contributions effective January 1, 2009. We also offer perquisites that we believe are customary and reasonable, such as Company-paid automobile expenses, and with respect to Messrs. Jeffrey Siegel, Shiftan and Daniel Siegel reimbursement or payment of certain insurance and professional expenses.

The following chart shows each of the above elements of compensation as a percentage of total compensation received by the NEOs for 2014, 2013 and 2012:

COMPENSATION OF NEOs

Jeffrey Siegel

During 2014, Jeffrey Siegel was employed by us as Chairman of our Board of Directors, Chief Executive Officer and director pursuant to an employment agreement dated as of March 12, 2014.

Mr. Siegel’s employment agreement, which became effective as of January 1, 2014, extended the term of Mr. Siegel’s employment through December 31, 2016, with an automatic renewal for an additional one-year period unless his employment is terminated by either us or Mr. Siegel, and provides for an annual base salary of $1,000,000; Company-paid automobile expenses; reimbursement of certain legal, financial and other professional services up to $15,000 during any 12-month period; and reimbursement of insurance premiums up to $75,000 per year.

Pursuant to Mr. Siegel’s employment agreement, we granted him an option to purchase 100,000 shares of our common stock at a price per share equal to the closing stock price on March 12, 2014. Such stock option vests in three installments, the last of which becomes exercisable on December 31, 2016 and the option will expire ten years from the date of grant. The employment agreement also entitles Mr. Siegel to receive an Annual Adjusted IBIT Performance Bonus and an Annual Individual Goal Bonus as described under Non-Equity Incentive Plan Compensation.

Mr. Siegel’s employment agreement further provides for payments due to Mr. Siegel upon the termination of his employment as described under Potential Payments Upon Termination or Change in Control.

The complete text of Mr. Siegel’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 18, 2014. Mr. Siegel’s employment agreement is incorporated here by reference and the foregoing description of such agreement is qualified by the text of such agreement.

Ronald Shiftan

During 2014, Ronald Shiftan was employed by us as our Vice Chairman and Chief Operating Officer pursuant to an employment agreement dated August 10, 2009, as amended as of November 9, 2010 and as amended and restated as of December 20, 2012 (the “Shiftan Second Amended and Restated Employment Agreement”).

The Shiftan Second Amended and Restated Employment Agreement extended the term of Mr. Shiftan’s employment through December 31, 2015, with automatic renewal for additional one-year periods unless his employment is terminated by either us or Mr. Shiftan, and provides for an annual base salary of $650,000; Company-paid automobile expenses; reimbursement of certain legal, financial and other professional services up to $15,000 during any 12-month period; and reimbursement of insurance premiums up to $60,000 per year.

Pursuant to the Shiftan Second Amended and Restated Employment Agreement, we granted Mr. Shiftan an option to purchase 100,000 shares of our common stock at a price per share equal to the closing stock price on January 2, 2013. 20% of such stock option vested on each of December 31, 2013, June 30, 2014 and December 31, 2014, and the remaining will vest and become exercisable in two equal semi-annual installments on June 30, 2015 and December 31, 2015. The stock option will expire five years from the date of grant.

The Shiftan Second Amended and Restated Employment Agreement also entitles Mr. Shiftan to receive an Annual Adjusted IBIT Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described under Non-Equity Incentive Plan Compensation.

The Shiftan Second Amended and Restated Employment Agreement further provides for payments due to Mr. Shiftan upon the termination of his employment as described under Potential Payments Upon Termination or Change in Control.

The complete text of Mr. Shiftan’s Amended and Restated Employment Agreement dated August 10, 2009 was filed with the SEC as an exhibit to a Form 8-K dated August 12, 2009. The complete text of the amendment dated as of November 9, 2010 was filed with the SEC as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2010. The complete text of the Shiftan Second Amended and Restated Employment Agreement was filed with the SEC as an exhibit to a Form 8-K dated December 20, 2012. The Amended and Restated Employment Agreement dated August 10, 2009, the amendment dated November 9, 2010 and the Shiftan Second Amended and Restated Employment Agreement are incorporated here by reference and the foregoing descriptions of such agreements are qualified by the text of such agreements.

Daniel Siegel

During 2014, Daniel Siegel was employed by us as our President. Prior to the employment agreement dated November 28, 2014, effective as of August 1, 2014, and as amended as of April 27, 2015, Mr. Siegel did not have an employment agreement with us.

Mr. Siegel’s employment agreement, as amended, established the term of Mr. Siegel’s employment through December 31, 2017, with automatic renewal for additional one-year periods unless his employment is terminated by either us or Mr. Siegel, and provides for an annual base salary of $475,000 and certain perquisites including fringe benefits, Company-paid automobile expenses and a one-time reimbursement of certain legal professional services, up to $6,500. The employment agreement, as amended, also entitles Mr. Siegel to receive an Annual Adjusted IBIT Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described under Non-Equity Incentive Plan Compensation.

Pursuant to Mr. Siegel’s employment agreement, we granted

him 5,000 restricted shares of our common stock on November 28, 2014. The restrictions on one-third of the restricted shares shall terminate on each of August 1, 2015, 2016 and 2017.

Mr. Siegel’s employment agreement, as amended, further provides for payments due to Mr. Siegel upon the termination of his employment as described under Potential Payments Upon Termination or Change in Control.

The complete text of Mr. Siegel’s employment agreement, dated as of November 28, 2014, was filed with the SEC as an exhibit to a Form 8-K dated December 3, 2014. The complete text of Mr. Siegel’s amendment to his employment agreement was filed with the SEC as an exhibit to a Form 8-K dated April 29, 2015. Mr. Siegel’s employment agreement and amended employment agreement are incorporated here by reference and the foregoing description of such agreements are qualified by the text of such agreements.

Craig Phillips

During 2014 and until his retirement on January 2, 2015, Craig Phillips was employed by us as our Senior Vice President – Distribution pursuant to the amended and restated employment agreement dated as of March 8, 2010 and amended as of March 12, 2013. The employment agreement, as amended, provided for a base annual salary of $360,000 and an annual bonus determined by the Compensation Committee of our Board of Directors, upon recommendation of our Chief Executive Officer and Chief Operating Officer, based primarily upon the Chief Executive Officer’s and Chief Operating Officer’s evaluation of Mr. Phillips’s performance during such calendar year. Mr. Phillips’s employment agreement also provided for certain perquisites including fringe benefits and Company-paid automobile related expenses.

Mr. Phillips’s employment agreement further provided for payments to Mr. Phillips upon the termination of his employment as described under Potential Payments Upon Termination or Change in Control.

The complete text of Mr. Phillips’s amended and restated employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 10, 2010. The complete text

of the amendment to Mr. Phillips’s amended and restated employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 15, 2013. Mr. Phillips’s employment agreement, the amended and restated employment agreement and the amendment to his amended and restated employment agreement are incorporated here by reference and the foregoing descriptions of such agreements are qualified by the text of such agreements.

Laurence Winoker

During 2014, Laurence Winoker was employed by us as our Senior Vice-President — Finance, Treasurer and Chief Financial Officer pursuant to an employment agreement dated as of June 28, 2007, as amended as of March 8, 2010 and April 12, 2012.

Mr. Winoker’s employment agreement, as amended, provides for an annual base salary of $425,000 for 2014 and a performance bonus based on performance objectives established in writing at the beginning of each calendar year during the term of employment under Mr. Winoker’s employment agreement. Mr. Winoker’s employment agreement also provides for certain perquisites including fringe benefits and Company-paid automobile related expenses.

Mr. Winoker’s employment agreement further provides for payments to Mr. Winoker upon the termination of his employment as described under Potential Payments Upon Termination or Change in Control.

The complete text of Mr. Winoker’s employment agreement, dated as of June 28, 2007, was filed with the SEC as an exhibit to a Form 8-K dated July 3, 2007. The complete text of the first amendment to Mr. Winoker’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 10, 2010. The complete text of the second amendment to Mr. Winoker’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated April 16, 2012. Mr. Winoker’s employment agreement, first amendment to his employment agreement and second amendment to his employment agreement are incorporated here by reference and the foregoing descriptions of such agreements are qualified by the text of such agreements.

Jeffrey Siegel’s employment agreement contains the following provisions regarding termination of employment and change of control.

Termination for cause; resignation without good reason

If Mr. Siegel’s employment is terminated by us for cause or if Mr. Siegel resigns other than for good reason, Mr. Siegel shall be entitled to be paid the following amounts (collectively, the “Accrued Obligations”):

Notwithstanding anything to the contrary in his employment agreement, Mr. Siegel shall be entitled to exercise any then-outstanding stock options granted to Mr. Siegel that shall have vested on or prior to such termination or resignation of employment.

Involuntary Termination

If Mr. Siegel’s employment is terminated (i) by us for any reason other than cause, (ii) by Mr. Siegel for good reason, (iii) by us or Mr. Siegel due to Mr. Siegel’s disability or (iv) by reason of Mr. Siegel’s death (such a resignation or termination being hereinafter referred to as an “Involuntary Termination”), Mr. Siegel shall be entitled to payment of the Accrued Obligations.

In addition, in the event of Mr. Siegel’s Involuntary Termination, we shall pay to Mr. Siegel as severance (the “Severance Payments”) the following amounts:

Anything in his employment agreement to the contrary notwithstanding, no such Severance Payments shall be payable if Mr. Siegel’s employment with us ends at the expiration or non-renewal of the term of his employment under his employment agreement.

In addition, Mr. Siegel shall continue to participate, at our expense, in the Company’s health and medical plans and in any other benefits provided by us to Mr. Siegel at the time of such Involuntary Termination until the end of the term of his employment or until Mr. Siegel obtains other employment, whichever occurs first.

In addition, in the event of Mr. Siegel’s Involuntary Termination, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.

Involuntary Termination in connection with certain changes in control

If, during the term of his employment we undergo a change in control and either (i) Mr. Siegel’s employment is thereafter terminated under circumstances that would constitute an Involuntary Termination or (ii) Mr. Siegel undergoes an Involuntary Termination and within 90 days of the Involuntary Termination we execute a definitive agreement to enter into a transaction the consummation of which would result in a change in control and such transaction is actually consummated, then Mr. Siegel shall be entitled to all payments, benefits and stock-based compensation as outlined under the Involuntary Termination section above. We shall make the payments and provide the benefits to be paid and provided under his employment agreement. However, if all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shall reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision); and (ii) by reason of such reduction, the net after-tax benefit to Mr. Siegel shall exceed the net after-tax benefit if such reduction were not made.

Involuntary Termination due to disability

In the event of Mr. Siegel’s disability, either we or Mr. Siegel shall be entitled to terminate Mr. Siegel’s employment. In the event that Mr. Siegel elects to terminate his employment due to disability, such termination shall be deemed to be an Involuntary Termination and Mr. Siegel shall be entitled to payment of the Accrued Obligations, the Severance Payments and any disability benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Siegel at the time of his disability. In addition, in the event Mr. Siegel’s employment is terminated due to disability, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.

Death

Except in certain circumstances, no further salary or benefits shall be payable under the Employment Agreement following the date of Mr. Siegel’s death. In the event of Mr. Siegel’s death, the Accrued Obligations and the Severance Payments shall be paid to Mr. Siegel’s beneficiary. Mr. Siegel’s beneficiary shall also be entitled to any death benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Siegel at the time of death. In addition, in the event of Mr. Siegel’s death, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.

Continuation of life insurance

Notwithstanding the termination of Mr. Siegel’s employment (other than for cause or by reason of his death) we shall continue in force and pay the premiums on life insurance on the life of Mr. Siegel that we are required to maintain and pay the premiums on pursuant to the Employment Agreement.

Ronald Shiftan’s Amended and Restated Employment Agreement dated as of August 10, 2009, as amended as of November 9, 2010 and amended and restated as of December 20, 2012 contains the following provisions regarding termination of employment and change of control.

Termination for cause; resignation without good reason

If Mr. Shiftan’s employment is terminated by us for cause or if Mr. Shiftan resigns other than for good reason, Mr. Shiftan shall be entitled to be paid the following amounts (collectively, the “Accrued Obligations”):

Notwithstanding anything to the contrary in his employment agreement, Mr. Shiftan shall be entitled to exercise any then-outstanding stock options granted to Mr. Shiftan that shall have vested on or prior to such termination or resignation of employment.

Involuntary Termination

If Mr. Shiftan’s employment is terminated (i) by us for any reason other than cause, (ii) by Mr. Shiftan for good reason, (iii) by us or Mr. Shiftan due to Mr. Shiftan’s disability or (iv) by reason of Mr. Shiftan’s death (such a resignation or termination being hereinafter referred to as an “Involuntary Termination”), Mr. Shiftan shall be entitled to payment of the Accrued Obligations.

In addition, in the event of Mr. Shiftan’s Involuntary Termination, we shall pay to Mr. Shiftan as severance (the “Severance Payments”) the following amounts:

Anything in his employment agreement to the contrary notwithstanding, no such Severance Payments shall be payable if Mr. Shiftan’s employment with us ends at the expiration or non-renewal of the term of his employment under his employment agreement.

In addition, Mr. Shiftan shall continue to participate, at our expense, in our health and medical plans and in any other benefits provided by us to Mr. Shiftan at the time of such Involuntary Termination until the end of the term of his employment or until Mr. Shiftan obtains other employment, whichever occurs first. Furthermore, in the event of Mr. Shiftan’s Involuntary Termination, all of Mr. Shiftan’s then-outstanding stock options

shall be immediately vested and exercisable.

Involuntary Termination in connection with certain changes in control

If, during the term of his employment we undergo a change in control and either (i) Mr. Shiftan’s employment is thereafter terminated under circumstances that would constitute an Involuntary Termination or (ii) Mr. Shiftan undergoes an Involuntary Termination and within 90 days of the Involuntary Termination we execute a definitive agreement to enter into a transaction the consummation of which would result in a change in control and such transaction is actually consummated, then Mr. Shiftan shall be entitled to all payments, benefits and stock-based compensation as outlined under the Involuntary Termination section above. We shall make the payments and provide the benefits to be paid and provided under his employment agreement. However, if all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shall reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision) and (ii) by reason of such reduction, the net after-tax benefit to Mr. Shiftan shall exceed the net after-tax benefit if such reduction were not made.

Involuntary Termination due to disability

In the event of Mr. Shiftan’s disability, either we or Mr. Shiftan shall be entitled to terminate Mr. Shiftan’s employment. In the event that Mr. Shiftan elects to terminate his employment due to disability, such termination shall be deemed to be an Involuntary Termination and Mr. Shiftan shall be entitled to payment of the Accrued Obligations, the Severance Payments and any disability benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Shiftan at the time of his disability. In addition, in the event Mr. Shiftan’s employment is terminated due to disability, all of Mr. Shiftan’s then-outstanding stock options shall be immediately vested and exercisable.

Death

Except in certain circumstances, no further salary or benefits shall be payable under Mr. Shiftan’s employment agreement following the date of Mr. Shiftan’s death. In the event of Mr. Shiftan’s death, the Accrued Obligations and the Severance Payments shall be paid to Mr. Shiftan’s beneficiary. Mr. Shiftan’s beneficiary shall also be entitled to any death benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, generally applicable to Mr. Shiftan at the time of death. In addition, in the event of Mr. Shiftan’s death, all of Mr. Shiftan’s then-outstanding stock options shall be immediately vested and exercisable.

Termination upon expiration of term

If Mr. Shiftan’s employment is terminated by reason of the expiration of the Term, Mr. Shiftan is entitled to payment of the Accrued Obligations. In addition, in such event, we shall pay Mr. Shiftan as severance an amount equal to:

Daniel Siegel’s Employment Agreement dated as of November 28, 2014 and amended as of April 27, 2015, contains the following terms regarding termination of employment and change of control.

General

Without limiting the generality of the termination provisions contained in Mr. Siegel’s employment agreement, as amended, if Mr. Siegel’s employment is terminated during the term of his employment agreement for any reason, we shall pay Mr. Siegel the following amounts (collectively, “Accrued Obligations”):

Termination due to death

If Mr. Siegel’s employment is terminated by reason of Mr. Siegel’s death, then Mr. Siegel’s estate shall receive payment for amounts provided as Accrued Obligations.

Termination due to permanent disability

In the event that his employment is terminated due to total disability, in addition to the Accrued Obligations, Mr. Siegel shall receive an amount equal to his base salary for a period of six months from the date of termination.

Termination by Mr. Siegel voluntarily;

termination by the Company for cause

Upon any termination of Mr. Siegel’s employment either (i) voluntarily by Mr. Siegel (except if he is voluntarily terminating his employment due to a change of control or for good reason) or (ii) by us for cause, all payments, salary and other benefits thereunder shall cease at the date of termination, with the exception of Accrued Obligations.

Termination by the Company without cause;

termination by Mr. Siegel for good reason;

election not to offer new employment

In the event that (i) his employment is terminated by us without cause, or (ii) his employment agreement is terminated by Mr. Siegel for good reason or (iii) we choose not to offer further employment to Mr. Siegel beyond the initial term or any renewal term, if applicable, on terms and conditions that

are, in the aggregate, no less favorable to Mr. Siegel than the terms and conditions of his employment agreement, and a change of control has not occurred, then the following conditions shall apply.

If Mr. Siegel’s employment is terminated by us without cause, then Mr. Siegel shall be entitled to receive:

If Mr. Siegel’s employment is terminated by Mr. Siegel for good reason, then Mr. Siegel shall be entitled to receive:

If we do not offer employment to Mr. Siegel beyond the initial term or any renewal term, as applicable, on terms and conditions that are, in the aggregate, no less favorable to

Mr. Siegel than the terms and conditions of his employment agreement, as amended, then, subject to the provisions of his employment agreement, as amended, upon the normal expiration of the initial term or any renewal term of his employment, as applicable, Mr. Siegel shall be entitled to receive:

Termination by Mr. Siegel or the Company

due to a change of control

In the event that his employment is terminated by Mr. Siegel or us due to a change of control, Mr. Siegel shall be entitled to receive:

Craig Phillips retired and resigned as Senior Vice-President – Distribution, effective January 2, 2015. Mr. Phillips’s amended and restated Employment Agreement dated as of March 8, 2010 and as amended as of March 12, 2013 contains the following terms regarding termination and change of control.

General

If Mr. Phillips’ employment was terminated during the term of his employment agreement for any reason, we would pay to Mr. Phillips the following amounts (collectively, “Accrued Obligations”):

Termination due to death

If Mr. Phillips’ employment was terminated by reason of Mr. Phillips’ death, then, in addition to the Accrued Obligations, Mr. Phillips’ estate would receive payment of the Annual Bonus for the fiscal year in which the Termination Date occurs; provided, however, that the amount of the Annual Bonus woulds be subject to a pro-rata reduction for the portion of the fiscal year following the Termination Date (“Pro-Rated Annual Bonus”).

Termination due to permanent disability

If Mr. Phillips’ employment was terminated by reason of Mr.

Phillips’ total disability, then, in addition to the Accrued Obligations, Mr. Phillips would receive payment of the Pro-Rated Annual Bonus for the fiscal year in which the Termination Date occurs.

Termination for cause

If Mr. Phillips’ employment was terminated for cause, then, except as otherwise expressly provided in his employment agreement, we would have no obligation to make payments under his employment agreement for any period after the Termination Date.

Termination due to resignation

If Mr. Phillips’ employment was terminated by Mr. Phillips without good reason, then, except as otherwise expressly provided in his employment agreement, we would have no obligation to make payments under his employment agreement for any period after the Termination Date.

Termination by the Company without cause or

termination by Mr. Phillips for good reason

If Mr. Phillips’ employment was terminated by us without cause, or by Mr. Phillips for good reason, then, in addition to the Accrued Obligations, Mr. Phillips shall receive payment of the Pro-Rated Annual Bonus for the fiscal year in which the Termination Date occurs and we would continue to pay Mr. Phillips his base salary from the Termination Date until the date 12 months after the Termination Date (the “Severance Expiration Date”).

Failure of the Company to renew

Upon the expiration of the initial term or any additional term of Mr. Phillips’ employment agreement, if we had notified Mr. Phillips of our desire not to renew the term of his employment agreement for the next additional term of one (1)

year, and Mr. Phillips notifies us in writing that Mr. Phillips is ready, willing and able to renew the term of his employment agreement for the next additional term of one (1) year, and we at such time did not have grounds to terminate Mr. Phillips’ employment for cause then our notice not to renew would be treated in the same manner as a termination without cause and, in addition to the Accrued Obligations, Mr. Phillips would receive payment of the Pro-Rated Annual Bonus for the fiscal year in which the Termination Date occurs and we would continue to pay Mr. Phillips his base salary, at the rate in effect on the Termination Date, from the Termination Date until the Severance Expiration Date.

Termination by Mr. Phillips or the Company

due to a change in control

In the event that his employment was terminated by Mr. Phillips or us due to a change of control, Mr. Phillips would be entitled to receive:

Severance reduced by other compensation

Any payments by us of base salary for any period after the Termination Date and through the Severance Expiration Date (the “Severance Period”) are required to be made pursuant to Mr. Phillips’ employment agreement and shall be reduced and offset by any compensation Mr. Phillips receives that is attributable to services performed for other enterprises during such period.

Laurence Winoker’s Employment Agreement dated as of June 28, 2007, as amended as of March 8, 2010 and as amended as of April 12, 2012 contains the following terms regarding termination and change of control.

Termination due to permanent disability

In the event that his employment is terminated due to total disability, Mr. Winoker shall receive an amount equal to his base salary for a period of six months from the date of termination.

Termination by Mr. Winoker voluntarily;

termination by the Company for cause

Upon any termination of Mr. Winoker’s employment agreement either (i) voluntarily by Mr. Winoker (except if he is voluntarily terminating his employment due to a change of control or for good reason or (ii) by us for cause, all payments, salary and other benefits thereunder shall cease at the date of termination, with the exception of vested benefits and accrued but unused vacation time, if any, prorated to the date of Mr. Winoker’s termination and the reimbursement of proper expenses.

Termination by the Company without cause;

termination by Mr. Winoker for good reason;

election not to offer new employment

In the event that (i) his employment is terminated by us without cause, or (ii) his employment is terminated by Mr. Winoker for good reason or (iii) we choose not to offer further employment to Mr. Winoker beyond the initial term or any renewal term, if applicable, on terms and conditions that are, in the aggregate, no less favorable to Mr. Winoker than the terms and conditions of his employment agreement, and a change of control has not occurred, then the following conditions shall apply.

If Mr. Winoker’s employment is terminated by us without cause, then Mr. Winoker shall be entitled to receive:

If Mr. Winoker’s employment is terminated by Mr. Winoker for good reason, then Mr. Winoker shall be entitled to receive:

If we do not offer employment to Mr. Winoker beyond the initial term or any renewal term, as applicable, on terms and conditions that are, in the aggregate, no less favorable to Mr. Winoker than the terms and conditions of his employment agreement, then, subject to the provisions of his employment agreement, upon the normal expiration of the initial term or any renewal term of his employment, as applicable, Mr. Winoker shall be entitled to receive:

Termination by Mr. Winoker or the Company

due to a change of control

In the event that his employment is terminated by Mr. Winoker or us due to a change of control, Mr. Winoker shall be entitled to receive:

Audit fees are fees paid to Ernst & Young for the annual audit of our financial statements, the quarterly reviews of our financial statements included in our Forms 10-Q, fees related to our annual audit of internal controls over financial reporting, statutory audit fees and fees for regulatory filings.

Audit-related fees

Audit related fees are fees paid to Ernst & Young for assurance and related services that are related to the performance of the audit or review of the financial statements but not reported as audit fees as well as other audit and due diligence procedures in connection with acquisitions or dispositions.

Tax fees

Tax fees are billed for services rendered for tax compliance including the preparation of tax returns and tax advisory services.

All other fees

All other fees consist of fees paid to Ernst & Young for access to Ernst & Young’s online accounting research tool.

In making its appointment of Ernst & Young to audit our financial statements for the fiscal year ending December 31, 2015, our Audit Committee reviewed past audit, audit related and other non-audit services performed during 2014. In selecting Ernst & Young, our Audit Committee carefully considered their independence. Our Audit Committee has determined that the performance of such non-audit services did not impair the independence of Ernst & Young.

Ernst & Young has confirmed to our Audit Committee that it is in compliance with all rules, standards and policies of the Public Company Accounting Oversight Board and the SEC governing auditor independence.

If the stockholders do not ratify this appointment, our Audit Committee will reconsider the appointment.

Representatives of Ernst & Young are expected to be present at the Meeting and will have the opportunity to make a statement if they desire and to respond to appropriate questions of stockholders.

LIMITATION ON DIRECTORS AND OFFICERS LIABILITY

Our Second Restated Certificate of Incorporation contains a provision which eliminates the personal liability of a director for monetary damages other than for breaches of the director’s duty of loyalty to us or our stockholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or violations under Section 174 of the Delaware General Corporation Law or for any transaction from which the director derived an improper personal benefit.

We have entered into indemnification agreements with each of our officers and directors which provide that we will indemnify the indemnitee against expenses, including reasonable attorney’s fees, judgments, penalties, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with any civil or criminal action or administrative proceeding arising out of the performance of his or her duties as our director, officer, employee or agent. Such indemnification is available if the acts of the indemnitee were in good faith, if the indemnitee acted in a manner he or she reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, the indemnitee had no reasonable cause to believe his or her conduct was unlawful.

We maintain directors and officers liability insurance policies. The policies insure our directors and officers against loss arising from certain claims made against such directors or officers by reason of certain wrongful acts.

CERTAIN RELATIONSHIPS

Certain relatives of Jeffrey Siegel, the Chairman of our Board of Directors and our Chief Executive Officer, are employed by us, as follows:

As previously described, Jeffrey Siegel is also the father of Daniel Siegel, who is a NEO, and a cousin of Craig Phillips, who is a director, and, until his resignation on January 2, 2015, was a NEO.

RELATED-PARTY TRANSACTIONS

Our policies and procedures regarding transactions with

related persons are set forth in writing in our Code of Ethics, as supplemented by the Code of Conduct, which requires that our Audit Committee must review and approve any “related party” transaction, as defined in Item 404(a) of Regulation S-K before it is consummated. The Audit Committee of our Board of Directors is responsible for reviewing such policies and procedures pursuant to its charter, which states that the Audit Committee will “review and approve related-party transactions submitted by management after management’s evaluation of the terms of such transaction.” We also attempt to identify related party transactions each year by requiring directors and executive officers to complete a questionnaire that identifies such transactions.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of any of our equity securities. During 2014, the following persons failed to file a Form 4 on a timely basis:

To the best of our knowledge, with the exception of the persons named above, all required reports were filed on a timely basis. In making this statement, we have relied on the written representations of our directors and officers and copies of Forms 3, 4 and 5 provided to us.

Subject to stockholder approval, our Board of Directors has approved the Amended and Restated 2000 Long-Term Incentive Plan (the “A&R Plan”). The A&R Plan revises the terms and conditions of the 2000 Long-Term Incentive Plan (the “2000 Plan”) in order to:

Changes made pursuant to the A&R Plan will apply to awards granted on or after June 10, 2015, the effective date of the A&R Plan.

The proposed A&R Plan is set forth as Appendix A to this Proxy Statement. The discussion of the A&R Plan that follows is intended to provide only a summary of the principal features of the plan and is in all respects qualified by, and subject to, the actual terms and provisions of the attached A&R Plan.

INCREASE OF SHARES AVAILABLE FOR AWARD

In 2012, an amendment was made to the 2000 Plan to provide an aggregate limit on the number of shares of our common stock for which awards may be granted under the 2000 Plan equal to 4,200,000 shares of our common stock. Prior to this amendment, the 2000 Plan provided that no more than 3,500,000 shares of our common stock could be subject to outstanding awards at any given time. If approved, the A&R Plan will increase the number of shares of our common stock for which awards may be issued by 650,000 shares to 4,850,000 shares.

As of December 31, 2014, the number of shares available for which awards may be granted under the 2000 Plan was 296,362 shares. Subsequent to December 31, 2014, we cancelled options to purchase 35,000 shares of common stock, issued 117,154 shares of common stock and issued 1,471 shares of restricted common stock. As of April 30, 2015, 212,737 shares were available for awards granted under the 2000 Plan.

Our three-year average burn rate was approximately 3.23%, which is less than the Institutional Shareholder Services industry benchmark for companies in the Consumer Durables and Apparel Industry in the Russell 3000 index of 3.89% in 2015.

Approval of the A&R Plan would allow us to continue to use stock options (and other stock-based awards) as a means to attract, retain and motivate our key personnel.

GOVERNANCE ASPECTS OF THE A&R PLAN

The A&R Plan includes several provisions that promote good governance. These features include the following:

In addition, the changes to the 2000 Plan that will, subject to stockholder approval of the A&R Plan, be introduced by the A&R Plan include the following governance features:

Additionally, our Board is considering incorporating performance-based features for future grants. In this regard, the A&R Plan further clarifies the terms and conditions of performance awards.

APPROVAL OF MATERIAL TERMS OF PERFORMANCE GOALS

The A&R Plan includes updated performance metrics and other provisions relating to awards that are designated as performance-based compensation under Section 162(m) of the Code. Section 162(m) of the Code limits the deductions a publicly held company can claim for compensation in excess of $1 million in a given year that is paid to the chief executive officer or any of the other three highest-paid officers, other than the chief financial officer, in each case serving on the last day of the fiscal year. Performance-based compensation that meets certain requirements is not counted against the $1 million deductibility cap, and therefore remains fully deductible.

One of the Section 162(m) requirements is that the material terms of the performance goals must be approved by stockholders. For this purpose, the material terms include: (i) the employees eligible to receive the performance-based compensation; (ii) the business criteria on which the performance goals are based, and (iii) the limit on the amount of compensation that could be paid to any employee. The material terms of the performance goals applicable to awards granted under the 2000 Plan were last approved by stockholders in 2012. Stockholder re-approval must be obtained

at least every five years for plans, such as the A&R Plan, that have targets or goals that the Compensation Committee has the authority to change. Even though stockholder approval is therefore not required until 2017, the Company is seeking stockholder approval in connection with approval of the A&R Plan.

Even though we are seeking stockholder approval for purposes of Section 162(m) of the Code, awards may be granted under the A&R Plan that do not qualify for the performance-based compensation exemption under Section 162(m) of the Code, and the Compensation Committee retains full discretion to determine whether or not a particular award is intended to qualify as performance-based compensation under Section 162(m) of the Code.

THE A&R PLAN

The purpose of the A&R Plan is to provide a means to attract, retain, motivate and reward selected directors, officers, employees, consultants and certain service providers of the Company and its parent and subsidiaries and to increase their ownership interests in the Company. Such directors, officers and employees as well as persons who provide consulting or other services to the Company, its parent or any subsidiary deemed by the Compensation Committee to be of substantial value to the Company, its parent and or any subsidiary are eligible to be granted awards under the A&R Plan. Persons who have been offered employment by or have agreed to become a director of the Company, its parent or any subsidiary, and persons employed by any entity that the Compensation Committee reasonably expects to become a subsidiary of the Company are also eligible to be granted awards under the A&R Plan.

LIMITS UNDER THE A&R PLAN

As noted above, subject to stockholder approval, the A&R Plan will limit the aggregate number of shares of stock for which awards may be granted under the A&R Plan (including awards granted under the 2000 Plan) to 4,850,000, subject to certain adjustments as provided in the A&R Plan. Awards made under the A&R Plan which are forfeited, terminated, surrendered, cancelled or have expired, will be disregarded for purposes of this limit. Shares of stock will not again be available for award if such shares are surrendered or withheld as payment either of the exercise price of an option or SAR or of withholding taxes in respect of the exercise, settlement or payment of, or the lapse of restrictions with respect to, any award. Shares purchased in the open market with proceeds from option exercises shall not be available for award. The exercise or settlement of an SAR shall reduce the shares of stock available under the A&R Plan by the total number of shares to which the exercise or settlement of the SAR relates, not just the net amount of shares actually issued upon exercise or settlement. Awards settled solely in cash shall not reduce the number of shares of stock available for issuance under the A&R Plan. Any shares subject to an option (or portion thereof) that is cancelled upon exercise of a tandem SAR when settled wholly or partially in shares shall to the extent of such settlement in shares be treated as if the option itself had been exercised and such shares received in settlement of the SAR shall no longer be available for award.

During any calendar year, no participant may be granted awards that may be settled by delivery of more than 500,000 shares of stock, subject to certain adjustments as provided in the A&R Plan. With respect to awards that may be settled in cash (in whole or in part), no participant may be paid during any calendar year cash amounts relating to such awards that exceed the greater of the fair market value of 500,000 shares at the date of grant or the date of settlement of the award.

ADMINISTRATION OF THE PLAN; AMENDMENT AND TERMINATION

Unless otherwise determined by our Board of Directors, our Compensation Committee administers the A&R Plan and has the authority to:

Any action of the Compensation Committee with respect to the A&R Plan is final, conclusive and binding on all persons. Our Board will perform the functions of the Compensation Committee for purposes of granting awards to directors who serve on the Compensation Committee.

Unless the Board determines otherwise, the committee administering the A&R Plan shall be comprised of solely not less than two members who each qualify as (i) a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) an “independent director,” as determined in accordance with the independence standards established by NASDAQ.

The A&R Plan may be amended, altered, suspended, discontinued, or terminated by our Board without stockholder approval unless such approval is required by law or regulation or under the rules of any stock exchange or automated quotation system on which our common stock is then listed or quoted. Thus, stockholder approval will not necessarily be required for amendments which might increase the cost of the A&R Plan or broaden eligibility. Stockholder approval will not be deemed to be required under laws or regulations that condition favorable tax treatment on such approval, although our Board may, in its discretion, seek stockholder approval in any circumstances in which it deems such approval advisable. No such action by our Board may materially impair the rights of a participant under any outstanding award.

The Compensation Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any award previously granted. However, subject to the adjustment provisions of the A&R Plan, no such action may materially impair a participant’s rights without the participant’s consent.

TYPES OF AWARDS

Awards under the A&R Plan may take the form of:

Awards granted under the A&R Plan are generally not as

signable or transferable except by the laws of descent and distribution.

Options

The Compensation Committee is authorized to grant options to purchase stock. The Compensation Committee will determine the exercise price per share of stock purchasable under an option, the time and method of exercise, and the period during which options shall be exercisable following the termination of the participant’s employment or service relationship with the Company. The exercise price may not be less than 100% of the fair market value of such stock on the grant date of the option. The Compensation Committee may grant options that would afford the participant with favorable treatment under the applicable tax laws, including, but not limited to ISOs. ISOs may only be granted to employees of the Company or parent or subsidiary corporation of the Company (as defined by Section 422 of the Code).

Stock Appreciation Rights

The Compensation Committee is authorized to grant SARs. An SAR shall confer on the participant to whom it is granted a right to receive, upon exercise thereof, the excess of the fair market value of one share of stock on the date of exercise (or if the Compensation Committee so determines, the fair market value of one share at any time during a specified period before or after the date of exercise) over the exercise price of the SAR as determined by the Compensation Committee as of the grant date of the SAR, which, except with respect to tandem awards, shall not be less than the fair market value of one share on the grant date of the SAR. The Compensation Committee will determine the conditions to the exercisability of the SAR, including the times at which an SAR may be exercised in whole or in part, the method of exercise, method of settlement, form of consideration payable in settlement, method by which stock will be delivered or deemed to be delivered, whether or not an SAR shall be in tandem with any other award, and any other terms of any SAR.

Restricted Stock

The Compensation Committee is authorized to grant restricted stock. Restricted stock shall be subject to restrictions on transferability and any other restrictions that the Compensation Committee may impose. Except as restricted by the A&R Plan or any award agreement related to the restricted stock, a participant granted restricted stock shall have all the rights of a stockholder.

Except as otherwise determined by the Compensation Committee, restricted stock shall be forfeited and reacquired by us upon termination of employment or service during the applicable restriction period; provided, however, that the Compensation Committee may provide by rule or regulation, in an award agreement or determine in any individual case, that restrictions or forfeiture conditions related to restricted stock will be waived in whole or in part in the event of termination resulting from specific causes. Dividends paid on restricted stock shall be either paid at the dividend payment date in cash or in shares of unrestricted stock having

a fair market value equal to the amount of such dividends, or the payment of such dividends shall be deferred and/or the amount or value thereof automatically reinvested in additional restricted stock, other awards or other investment vehicles.

Deferred Stock

The Compensation Committee is authorized to grant units representing the right to receive stock at a future date. Such deferred stock shall be subject to restrictions, if any, that the Compensation Committee may impose. Except as otherwise determined by the Compensation Committee, upon termination of employment or service during the applicable deferral period or portion thereof to which forfeiture conditions apply, all deferred stock that is at the time subject to such forfeiture conditions shall be forfeited; provided, however, that the Compensation Committee may provide by rule or regulation or in an award agreement or determine in any individual case, that restrictions or forfeiture conditions related to deferred stock will be waived in whole or in part in the event of termination resulting from specific causes.

Bonus Stock and Awards in Lieu of Cash Obligations

The Compensation Committee is authorized to grant stock as a bonus, or to grant stock or other awards in lieu of our obligations to pay cash under other plans or compensatory arrangements.

Dividend Equivalents

The Compensation Committee is authorized to grant awards entitling the participant to receive cash, stock, other awards, or other property equal in value to dividends paid with respect to a specified number of shares of stock. Dividend Equivalents may be awarded on a free standing basis or in connection with another award. The Compensation Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional stock, awards or other investment vehicles, and subject to any restrictions on transferability and risks of forfeiture, as the Compensation Committee may specify.

Other Stock-Based Awards

Subject to applicable law and the terms of the A&R Plan, the Compensation Committee is authorized to grant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, stock and factors that may influence the value of the stock, as deemed by the Compensation Committee to be consistent with the purposes of the A&R Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into stock, purchase rights for stock, awards with value and payment contingent upon performance of the Company or any other factors designated by the Compensation Committee and awards valued by reference to the book value of stock or the value of securities of or the performance of specified subsidiaries of the Company. The Compensation Committee shall determine the terms and conditions of such awards. Cash awards, as an element of, or supplement to any other award

under the A&R Plan may be granted.

Performance-Based Awards

The Compensation Committee may, in its discretion, determine that an award granted to an employee will be considered “qualified performance-based compensation” under Section 162(m) of the Code. Other than certain stock options and SARs which otherwise satisfy the requirements for qualified performance-based compensation, such awards (“Performance Awards”) will be contingent upon achievement of pre-established performance objectives. The performance objectives for Performance Awards will consist of one or more business criteria and a targeted level or levels of performance with respect to such criteria, as specified by the Compensation Committee. The Compensation Committee may determine that Performance Awards will be granted, exercised, and/or settled upon achievement of any one performance objective or that two or more of the performance objectives must be achieved as a condition to grant, exercise, and/or settlement of such Performance Awards. Business criteria used by the Compensation Committee in establishing performance objectives for Performance Awards will be selected from among the following, which may be applied to the Company, on a consolidated basis, and/or for specified subsidiaries, divisions, or other business units of the Company (where the criteria are applicable):