Executive Officer Compensation Decisions

Base Salary: Process

Base salaries for all NEOs are effective at the beginning of each fiscal year. For fiscal year 2008, the Compensation Committee approved salaries and other compensation components for executive officers other than the CEO, whose compensation was approved by the Board based upon the recommendation of the Committee. Position scope and complexity as well as external market factors are used to determine base salary ranges. As noted above, the Committee has established a target for executive officer compensation at the 50^th percentile, relative to the market, based on the benchmarking data described above. Salary increases, if any, are based on individual performance, position, current pay relative to the market, and future anticipated contribution. Assessment of individual performance follows a rigorous evaluation process, including self-evaluation and the establishment of annual goals for each officer and an assessment of the achievement thereof. For fiscal year 2009 compensation decisions, the Committee has the authority to approve salary increases for all NEOs, including the CEO. Information concerning 2009 compensation decisions is provided in the Fiscal Year 2009 Compensation Decisions section below.

Base Salary: Fiscal Year 2008

Based on the peer group and survey data and the criteria described above, the CEO presented his recommendations to the Committee for base salary increases for other executive officers in October 2007. After reviewing the CEO’s recommendations, the Committee approved salaries for the officers as set forth in the table below. Mr. Rembolt was appointed as Chief Financial Officer on April 30, 2008. Mr. Rembolt’s base salary was increased as of May 1, 2008 from $181,337 to $212,000 by action of the Compensation Committee on June 23, 2008 upon review of his salary relative to market and in recognition of his increased level of responsibility. In October 2007, the Board reviewed the Committee’s recommendation for the CEO’s base salary, and approved a 4.0% increase to $566,400, which was at the 75th percentile relative to market as evidenced by the data described in the Compensation Benchmarking section above. The performance of the CEO for fiscal year 2007 was measured against mutually agreed upon targets and goals around growth, innovation, leadership, earnings and customer relations. The Committee’s assessment was that a majority of key objectives were met, and that based on such performance, the Committee awarded a salary increase to the CEO that was neither the highest nor the lowest of executive salary increases.

The salary increases for fiscal year 2008 were considered by the Committee and the Board to be appropriate in light of market conditions as evidenced by the peer group and published survey data and the substantial achievement of individual performance goals by each of the executive officers as well as their individual contributions to overall Company performance. In reaching its decisions with respect to the base salary increases for the executive officers, the Committee considered the company-wide merit increase budget, individual and company performance in the areas of each officer’s area of responsibility and current levels of pay relative to the target range of compensation based on the peer group benchmarking data. Mr. Ridge’s relatively higher base salary compensation was considered by the Committee to be appropriate given his level of responsibility for overall Company performance.

Salary increase actions for fiscal year 2008 for the NEOs other than Mr. Rembolt were as follows:

1. Mr. Noble’s base salary for 2008 was converted to dollars based on an average annual exchange rate for fiscal year 2007 of $1.9603 per pound.

Performance Incentive Bonus

The Company uses its Performance Incentive program to tie NEO compensation to the Company’s financial performance. Incentive awards are based on corporate performance measures, including (i) the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) computed on a consolidated basis (referred to herein as the Company’s “Global EBITDA”); (ii) EBITDA computed for relevant financial reporting segments (“Segment EBITDA”); (iii) the Company’s gross margin determined for relevant financial reporting segments (“Gross Margin”); and (iv) a measure of return on invested capital (“ROIC”). The manner in which the Company calculates ROIC is provided in the Company’s press release with respect to the announcement of its annual earnings which, for fiscal year 2008, was filed on October 15, 2008 as Exhibit 99.1 to its report on Form 8-K. The selection of the performance measures applicable to each NEO is based upon the executive officer’s job classification. The same Performance Incentive program formulas are used for establishing bonus compensation for all employees of the Company and the formulas for some employees include the use of other performance measures relevant to their job classifications.

Depending upon performance results, the Performance Incentive bonus payout can range from 0–100% of base salary for the Chief Executive Officer, from 0–60% of base salaries for the other NEOs with the exception of Jay Rembolt whose Performance Incentive bonus payout can range from 0-50% of his base salary. The maximum bonus for each NEO is referred to herein as their “annual opportunity”. Maximum incentive bonus payouts require both achievement of specified Segment EBITDA and individual performance measure maximum amounts and Company performance that exceeds the maximum amount for Global EBITDA as described below. The maximum opportunity percentage for the CEO at 100% of his base salary as compared to the maximum opportunity percentage for the other NEOs at 50% or 60% of base salary was established by the Board of Directors in prior years in recognition of the higher level of responsibility of the CEO for overall Company performance, in reliance on benchmarking data supporting total potential CEO compensation at such levels and to establish a compensation package for the CEO having a higher percentage of potential compensation tied to Company performance.

At the beginning of each fiscal year, the Board approves specific performance measures for the upcoming year, along with associated weightings and an objective formula for calculation of the Performance Incentive bonus payouts for all NEOs. In October of the following year, and before payment, the Committee reviews the Company’s financial results and confirms calculation of the Incentive Performance bonus payouts for each of the executive officers.

For each employee, the Performance Incentive program provides three distinct performance measure levels for possible award of bonus compensation. The first level represents 30% of the annual opportunity, the second level represents 20% of the annual opportunity and the third level represents 50% of the annual opportunity.

The relevant performance measure for the first level is Segment EBITDA. For certain employees having more influence over global operations than operations within a specific operating segment, the performance measure for the first level is equally weighted among the Company’s three reporting segments, the Americas, Europe and Asia-Pacific. Otherwise, the applicable performance measure is the Segment EBITDA for the geographic region in which the employee is employed. For fiscal year 2008, the minimum and maximum amounts for the applicable Segment EBITDA were established by the Board in October 2007. The bonus payout for the first level is based on the relative achievement of the Segment EBITDA performance measure within the range of the minimum and maximum, up to 100% of the proportionate amount of the annual opportunity.

The performance measure for the second level is individually selected from among measures tied more closely to the employee’s area of responsibility. The minimum and maximum amounts for the applicable performance measure and the calculation of the bonus payout upon achievement of the applicable measure are established in the same manner as with the first level of the Performance Incentive program. In some instances, the second level performance measure will be a stretch target for the Segment EBITDA. In that case, no second level bonus payout will be earned unless the maximum bonus under the first level is earned for the Segment EBITDA. In other instances, the second level performance measure will be a non-EBITDA measure, such as Gross Margin or ROIC. In that case, second level bonus payout is limited to the percentage attainment of the first level performance.

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