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This excerpt taken from the RES DEF 14A filed Mar 31, 2005. Overview During the fiscal year 2004, the members of the
Compensation Committee of the Board of Directors held responsibility for determining the base salary and cash based incentive plans for the Named
Executive Officers. The Compensation Committee also administers the stock based incentives for all of the Named Executive Officers. The Compensation
Committee is comprised of outside directors who do not participate in the Company’s compensation plans.
The Company is engaged in a highly competitive
industry. The actions of the Named Executive Officers have a profound impact on the short-term and long-term profitability of the Company; therefore,
the designs of the Named Executive Officers’ compensation packages are very important. In order to retain key employees, the Company has an
executive compensation package that is determined by increase in shareholder value, the overall performance of the Company, and the individual
performance of the executive. The measures of the Company’s performance considered by the Compensation Committee in determining the 2004 Named
Executive Officers’ compensation were long-term growth in net income and stockholder value improvements in addition to individual performance. The
Committee subjectively weights these factors without any specific formula and adjusts the compensation of an executive based on individual performance
compared to Company expectations and performance. During fiscal 2004, the Company performance met or exceeded its expectations at the time it set
executive pay.
Pursuant to the above compensation philosophy, the
three main components of the executive compensation packages are base salary, cash based incentives, and stock based incentive plans.
The Company’s Named Executive Officers are also
executive officers of Marine Products and receive compensation directly from Marine Products. The members of the Company’s Compensation Committee
also constitute the Compensation Committee of Marine Products. In determining the compensation for the Named Executive Officers at the Company, the
Committee considers the dual responsibilities and sets compensation from the Company at such levels that the aggregate compensation received from both
Marine Products and the Company is reasonable in light of the responsibilities and the performance of each Company. A discussion of the Company’s
executive officers’ compensation at Marine Products is contained in its annual proxy statement filed with the U.S. Securities and Exchange
Commission.
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