Edgar Filing: CONCORD CAMERA CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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Concord Camera Corp.
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[LOGO]

Concord
THE INNOVATOR

CONCORD CAMERA CORP.
4000 Hollywood Boulevard
Presidential Circle-6th Floor, North Tower
Hollywood, Florida 33021

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 18, 2008

Notice is hereby given that an Annual Meeting of Shareholders of Concord Camera
Corp., a New Jersey corporation, (the "Company") will be held at the Marriott
Residence Inn at Aventura Mall, 19900 West Country Club Drive, Aventura, Florida
33180, on Thursday, December 18, 2008, beginning at 10:00 a.m., local time, for
the following purposes:

1. To approve the dissolution of the Company and the Plan of Dissolution,
substantially in the form attached hereto as Annex A;

2. To elect Ira B. Lampert, Ronald S. Cooper, Morris H. Gindi, William J.
O'Neill, Jr. and Roger J. Beit as directors for a term of office expiring at the
2009 Annual Meeting of Shareholders or until their respective successors are
duly elected and qualified;

3. To ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm of the Company for the fiscal year ending June
27, 2009; and

4. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.

Only holders of record of the Company's common stock, no par value, at the close
of business on November 7, 2008, will be entitled to notice of and to vote at
the Annual Meeting or any adjournments thereof.

In order to be admitted to the Annual Meeting, a shareholder must present an
admission ticket or proof of ownership of Company stock on the record date. If
your shares are held in the name of a bank, broker or other holder of record, a
brokerage statement or letter from a bank or broker is an example of proof of
ownership. Any holder of a proxy from a shareholder must present the proxy card,
properly executed, and an admission ticket to be admitted. Shareholders and
proxy holders must also present a form of photo identification such as a
driver's license or passport.

An admission ticket is on the back cover page of your proxy statement. If you
plan to attend the Annual Meeting, please keep this ticket and bring it with you
to the Annual Meeting. If you receive this proxy statement electronically, you
can obtain a ticket in advance of the Annual Meeting by printing the final page
of this proxy statement.

Please sign and date the enclosed form of proxy and return it in the postage
paid, self-addressed envelope provided for your convenience. Management asks
that you do this whether or not you plan to attend the meeting. Should you
attend, you may, if you wish, withdraw your proxy and vote your shares in
person.

By Order of the Board of Directors,

Scott L. Lampert
Secretary

Hollywood, Florida
November 7, 2008

CONCORD CAMERA CORP.
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
THURSDAY, DECEMBER 18, 2008

This proxy statement is furnished by the Board of Directors, or the Board, of
Concord Camera Corp. in connection with the solicitation of proxies to be voted
at the Annual Meeting of Shareholders of the Company that will be held at the
Marriott Residence Inn at Aventura Mall, 19900 West Country Club Drive,
Aventura, Florida 33180 on Thursday, December 18, 2008, beginning at 10:00 a.m.,
local time, and all adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. References to the "Company" or "we", "us"
or "our" are all references to Concord Camera Corp.

Our Board has fixed the close of business on November 7, 2008, as the record
date for the determination of shareholders entitled to notice of and to vote at
the annual meeting or any adjournments thereof. As of that date, there were
issued and outstanding 5,913,610 shares of our common stock, no par value, our
only class of voting securities outstanding. Each share of our common stock
entitles the holder to one vote. The presence, in person or by proxy, of holders
of a majority of all of our outstanding common stock constitutes a quorum at the
annual meeting. Shares of our common stock represented by proxies that reflect
abstentions and "broker non-votes" (i.e., common stock represented at the annual
meeting by proxies held by brokers or nominees as to which (i) the brokers or
nominees have not received instructions from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have the discretionary
voting power on a particular matter) will be counted for the purpose of
determining the existence of a quorum at the Annual Meeting, but will not be
counted as a vote cast for the purpose of determining the number of votes
required to approve a proposal.

Any shareholder giving a proxy will have the right to revoke it at any time
prior to the time it is voted. A proxy may be revoked by: (i) giving written
notice to us at or prior to the Annual Meeting, attention: Secretary; (ii)
signing another proxy with a later date; or (iii) attendance and voting in
person at the Annual Meeting. Attendance at the Annual Meeting will not
automatically revoke the proxy. All shares of our common stock represented by
effective proxies will be voted at the annual meeting or at any adjournment
thereof. Unless otherwise specified in the proxy (and except for "broker
non-votes" described above), shares of our common stock represented by proxies
will be voted: (i) FOR the approval of our dissolution and the Plan of
Dissolution and Liquidation; (ii) FOR the election of each of the five
directors; (iii) FOR the approval of the ratification of BDO Seidman, LLP as the
independent registered public accounting firm of the Company for the fiscal year
ending June 27, 2009; and (iv) in the discretion of the proxy holders with
respect to such other matters as may properly come before the Annual Meeting.

All information in this proxy statement gives effect to a two-for-one split of
our common stock effective on April 14, 2000, to shareholders of record on March
27, 2000, and a one-for-five split of our common stock, effective on November
21, 2006, to shareholders of record on November 20, 2006.

Our executive offices are located at 4000 Hollywood Boulevard, Presidential
Circle-6th Floor, North Tower, Hollywood, Florida 33021. Mailing to shareholders
of record on November 7, 2008 of the Notice of Annual Meeting, this proxy
statement and the accompanying form of proxy will commence on or around November
18, 2008.

TABLE OF CONTENTS

PAGE

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING................................ 1

SUMMARY OF PROPOSAL FOR DISSOLUTION AND PLAN OF DISSOLUTION
AND LIQUIDATION.............................................................. 10

CERTAIN RISKS RELATED TO THE DISSOLUTION AND THE PLAN OF
LIQUIDATION.................................................................. 14

FORWARD-LOOKING STATEMENTS................................................... 19

PROPOSAL ONE: APPROVAL OF OUR DISSOLUTION AND THE PLAN OF
DISSOLUTION AND LIQUIDATION.................................................. 20

SELECTED FINANCIAL DATA...................................................... 38

PROPOSAL TWO: ELECTION OF DIRECTORS......................................... 40

COMPENSATION DISCUSSION AND ANALYSIS......................................... 49

BENEFICIAL OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............. 75

PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS......... 79

OTHER INFORMATION............................................................ 81

ANNEX A PLAN OF DISSOLUTION AND LIQUIDATION................................. A-1

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the Purpose of the Annual Meeting?

At the Annual Meeting, shareholders will consider and vote on proposals to:

o approve our dissolution and the Plan of Dissolution and Liquidation
of the Company, substantially in the form attached hereto as Annex
A, referred to as the "plan of liquidation";

o elect Ira B. Lampert, Ronald S. Cooper, Morris H. Gindi, William J.
O'Neill, Jr. and Roger J. Beit as directors for a term of office
expiring at the 2009 Annual Meeting of shareholders or until their
respective successors are duly elected and qualified; and

o ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm of the Company for the fiscal year
ending June 27, 2009.

We may also transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.

Who Is Entitled to Vote?

The record date for the Annual Meeting is November 7, 2008. Only shareholders of
record at the close of business on that date are entitled to notice of and to
vote at the Annual Meeting. At the close of business on the record date there
were 5,913,610 shares of common stock outstanding.

A list of shareholders entitled to vote will be available at the Annual Meeting.
In addition, the list will be open to the examination of any shareholder, for
any purpose germane to the Annual Meeting, at our address set forth in this
Proxy Statement between the hours of 9:00 a.m. and 5:00 p.m., local time, on any
business day from November 25, 2008 up to the time of the Annual Meeting.

What If My Shares Are Held in "Street Name" by a Broker?

If you are the beneficial owner of shares held in "street name" by a broker,
your broker, as the record holder of the shares, is required to vote those
shares in accordance with your instructions. If you do not give instructions to
your broker, your broker is only entitled to vote on the proposal regarding the
election of directors, as described in proposal 2, and the ratification of
auditors, as described in proposal 3. Your broker will not be permitted to vote
your shares with respect to our dissolution and the plan of liquidation and a
"broker non-vote" will occur, which will be counted towards the quorum, but will
not be counted as a vote cast for the purpose of determining the number of votes
required to approve the proposals.

How Do I Vote?

You may vote by mail. If you properly complete and sign the accompanying proxy
card and return it in the enclosed envelope, it will be voted in accordance with
your instructions. The

enclosed envelope requires no additional postage if mailed in the United States.
If your shares are held in "street name" by a broker or other nominee, you
should check the voting form used by that firm to determine whether you will be
able to vote by telephone or on the Internet.

You may vote in person at the meeting. If you plan to attend the Annual Meeting
and wish to vote in person, we will give you a ballot at the meeting. However,
if your shares are held in the name of your broker, bank or other nominee, you
will need to obtain a proxy form from the institution that holds your shares
indicating that you were the beneficial owner of our common stock on November 7,
2008, the record date for voting at the Annual Meeting.

May I Change My Vote After I Submit My Proxy?

Yes, you may revoke your proxy and change your vote at any time before the polls
close at the Annual Meeting by:

o signing another proxy with a later date;

o giving written notice of the revocation of your proxy to our
Secretary at or prior to the meeting; or

o voting in person at the Annual Meeting.

What If I Do Not Specify How My Shares Are to be Voted?

If you submit an executed proxy but do not indicate how your shares are to be
voted, your shares will be voted

o "FOR" the proposal to approve our dissolution and the plan of
liquidation;

o "FOR" the proposal to elect Ira B. Lampert, Ronald S. Cooper, Morris
H. Gindi, William J. O'Neill, Jr. and Roger J. Beit as directors for
a term of office expiring at the 2009 Annual Meeting of Shareholders
or until their respective successors are duly elected and qualified;
and

o "FOR" the proposal to ratify the appointment of BDO Seidman, LLP as
the independent registered public accounting firm of the Company for
the fiscal year ending June 27, 2009.

o in the discretion of the proxy holders with respect to such other
business as may properly come before the Annual Meeting or any
adjournments thereof.

What Is Required for a Quorum?

The holders of shares entitled to cast a majority of the votes at a meeting of
shareholders constitutes a quorum for the transaction of business at the Annual
Meeting. Proxies marked as abstentions and any broker non-votes (shares held by
brokers which are represented at the meeting but with respect to which the
broker is not

empowered to vote on a particular proposal) will be included as shares present
for purposes of determining whether or not there is a quorum.

What if a Quorum is Not Present at the Annual Meeting?

Under our bylaws, if a quorum is not present at any meeting of the shareholders,
the shareholders entitled to vote at the meeting have the power to adjourn the
meeting from time to time until a quorum is present. If a quorum is not present
at the Annual Meeting, we expect to attempt to adjourn the Annual Meeting to
solicit additional proxies. In such event, the persons named in the proxy card
will have the authority to, and currently intend to, vote your shares in favor
of adjournment.

What Vote is Required to Approve the Proposals at the Annual Meeting?

o To approve the dissolution and plan of liquidation: The affirmative
vote of a majority of the votes cast by the holders of shares of our
common stock present or represented and entitled to vote at the
Annual Meeting. Members of our current Board and our executive
officers who held as of the record date, an aggregate of 1,908,983
shares of common stock (approximately 32.3% of the outstanding
shares of common stock as of the record date) have indicated that
they will vote all of their shares FOR approval of the dissolution
of the Company and the plan of liquidation.

o To elect Ira B. Lampert, Ronald S. Cooper, Morris H. Gindi, William
J. O'Neill, Jr. and Roger J. Beit as directors for a term of office
expiring at the 2009 Annual Meeting of Shareholders or until their
respective successors are duly elected and qualified: The
affirmative vote of a plurality of the votes cast by the holders of
shares of our common stock present or represented and entitled to
vote at the Annual Meeting.

o To ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm of the Company for the fiscal year
ending June 27, 2009: The affirmative vote of a majority of the
votes cast by the holders of shares present or represented and
entitled to vote at the Annual Meeting.

What If I Do Not Vote on the Proposals Presented?

If a shareholder abstains from voting or does not vote, either in person or by
proxy, on the proposal to:

o approve our dissolution and the plan of liquidation, it will have no
effect on the outcome of the vote for the proposal.

are withheld with respect to this matter will be excluded entirely
from the vote and will have no effect, other than for purposes of
determining the presence of a quorum.

o ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm of the Company for the fiscal year
ending June 27, 2009, it will have no effect on the outcome of the
vote for the proposal.

What Will Happen If Shareholders Do Not Approve our Dissolution and the Plan of
Liquidation?

If our shareholders do not approve our dissolution and the plan of liquidation,
our Board will continue to explore what, if any, alternatives are then available
for the future of the Company. We believe the value of our business will be
materially adversely impacted after the announcement of the recommendation by
our Board of our dissolution and the adoption of the plan of liquidation. In
particular, pending our shareholders' vote on our dissolution and plan of
liquidation, we have ceased manufacturing products, purchasing materials and
products and undertaking commitments for sales of our products except for those
products that we have remaining in inventory. As a result, we believe that many,
if not all, of our customers, including our major customers, will transition
their business to our competitors. Therefore, if our shareholders do not approve
our dissolution and plan of liquidation, we will not be able to continue to
operate our business as it existed prior to the announcement of our Board's
recommendation of our dissolution and the adoption of the plan of liquidation
and we may not be able to operate our business at all.

Can I Still Sell My Shares?

Yes, you may sell your shares at this time, but it may be difficult or
impossible to sell your shares in the near future.

Our common stock is currently listed on the NASDAQ Global Market and currently
you may sell your shares on this trading market. However, we are subject to
financial and market-related tests and various qualitative standards established
by NASDAQ to maintain our listing on the NASDAQ Global Market. We may also be
delisted if we fail to meet NASDAQ Global Market's other quantitative listing
requirements or its qualitative standards.

On October 1, 2008, we received a deficiency notice from NASDAQ indicating that
we did not file our Annual Report on Form 10-K for the period ended June 28,
2008 and, therefore, we were not in compliance with NASDAQ Marketplace Rule
4310(c)(14). The letter stated that our common stock would be subject to
delisting unless we requested a hearing before a NASDAQ Listing Qualifications
Panel (the "Panel"). We have requested a hearing before the Panel and the
hearing is currently scheduled for November 20, 2008. Pending the Panel's
decision, our common stock will remain listed. We had previously received a
deficiency notice from NASDAQ indicating that we did not file our Quarterly
Report on Form 10-Q for the period

ended December 28, 2007. After we filed our Quarterly Report on Form 10-Q for
the period ended December 28, 2007 on March 31, 2008, NASDAQ notified us that at
that time, we were in compliance with the listing requirements. It is uncertain
what effect, if any, our prior deficiency related to our Quarterly Report on
Form 10-Q for the period ended December 28, 2007 will have on the Panel's
decision and there can be no assurance the Panel will grant our request for
continued listing.

If our dissolution and the plan of liquidation are approved, we expect to
voluntarily delist our common stock from the NASDAQ Global Market, close our
stock transfer books and prohibit transfers of record ownership of our common
stock after filing a certificate of dissolution with the State of New Jersey.

How Does the Board of Directors Recommend I Vote on the Proposals?

Our Board recommends that you vote:

o "FOR" the proposal to approve our dissolution and the plan of
liquidation;

o "FOR" the proposal to elect Ira B. Lampert, Ronald S.
Cooper, Morris H. Gindi, William J. O'Neill, Jr. and Roger J. Beit
as directors for a term of office expiring at the 2009 Annual
Meeting of Shareholders or until their respective successors are
duly elected and qualified; and

o "FOR" the proposal to ratify the appointment of BDO Seidman, LLP as
the independent registered public accounting firm of the Company for
the fiscal year ending June 27, 2009.

Why has the Board of Directors Recommended Our Dissolution and the Plan of
Liquidation?

Our Board has determined that it is not advisable to continue to operate our
business on an independent basis and that the distribution of our net assets in
a liquidation has a greater probability of producing more value to our
shareholders than other alternatives. See "Proposal One - Approval of our
Dissolution and the Plan of Dissolution and Liquidation - Background and Reasons
for the Dissolution and the Plan of Liquidation." Accordingly, based on the
Special Committee's review of strategic alternatives and recommendation, on
October 29, 2008, our Board adopted a resolution approving our dissolution and
plan of liquidation.

What will Happen if Shareholders Approve the Dissolution and Plan of
Liquidation?

If shareholders approve our dissolution and the plan of liquidation, we will:

o file a Certificate of Dissolution with the Department of Treasury of
the State of New Jersey, specifying the date (no later than ninety
days after the filing) upon which the Certificate of Dissolution
will become effective and we will be dissolved;

o conduct business operations only to the extent necessary to wind up
our business affairs and withdraw from any jurisdiction in which we
are qualified to do business, except as necessary to sell our
non-cash assets and for the proper winding up of our Company;

o sell all of our non-cash assets and properties (including our
intellectual property and other intangible assets);

o settle and pay or attempt to adequately provide for the payment of
all of our known liabilities;

o establish a contingency reserve designed to settle and pay any
additional liabilities, including contingent liabilities and
expenses of the dissolution and liquidation; and

o make one or more distributions to our shareholders of available
liquidation proceeds.

When will Shareholders Receive Payment of any Available Liquidation Proceeds?

If our shareholders approve our dissolution and the plan of liquidation, we will
distribute available liquidation proceeds, if any, to shareholders as our Board
deems appropriate. We are currently unable to predict the precise timing of any
distributions pursuant to the plan of liquidation Distributions may be made over
the next few years, although if we are unable to sell our non-cash assets, if
the proceeds of the sales of our non-cash assets are less than anticipated, if
we are unable to settle or otherwise resolve existing claims for the amounts
anticipated or if unanticipated claims are made against us, distributions to
shareholders may be delayed and made over a longer period of time. The timing of
any distributions will be determined by our Board and will depend upon our
ability to sell our non-cash assets and resolve and pay our remaining
liabilities, including contingent claims.

How Much Can Shareholders Expect to Receive if Our Dissolution and the Plan of
Liquidation is Approved at the Annual Meeting?

At this time, we cannot predict with certainty the amount of any liquidating
distributions to our shareholders. However, based on information currently
available to us, assuming, among other things, no unanticipated actual or
contingent liabilities, we estimate that over time shareholders will receive one
or more distributions that in the aggregate range from approximately $3.25 to
$4.82 per share. This range of estimated distributions represents our estimate
of the amount to be distributed to shareholders during the liquidation, but does
not represent the minimum or maximum distribution amount. Actual distributions
could be higher or lower.

This estimated range is based upon, among other things, the fact that as of
September 27, 2008, we had approximately $43.3 million in cash, cash
equivalents, restricted cash equivalents and short-term and non-current
investments, and expect to use cash of approximately $33.0 million to satisfy
liabilities on our unaudited balance sheet after September 27, 2008. In addition
to converting our remaining non-cash assets to cash and satisfying the
liabilities currently on our balance sheet, we have used and anticipate using
cash for a number of items, including but not limited to:

o ongoing operating losses of at least $4.4 million after September
27, 2008;

o employee severance and related costs of at least $7.5 million after
September 27, 2008; and

o professional fees of at least $0.2 million after September 27, 2008.

As of September 27, 2008, the carrying value of our auction rate securities was
approximately $17.1 million. This amount reflects an unrealized loss of
approximately $5.1 million which was recorded as of June 28, 2008 due to our
determination that the fair value of these securities was less than their par
value. The current disruptions in the credit markets have adversely affected the
auction market for these types of securities. As previously reported, during our
fiscal year ended June 28, 2008 ("Fiscal 2008"), we experienced failed auctions
for certain of our auction rate securities that have gone to auction resulting
in our inability to sell these securities. During Fiscal 2008, we received net
proceeds of $6.9 million from the sale of auction rate securities at 100% of par
value, of which $1.9 million was received after market uncertainties and
liquidity issues arose in the market for auction rate securities. Additionally,
we have experienced redemptions of approximately $1.8 million of our auction
rate securities at 100% of par value subsequent to June 28, 2008 and have
consented to tender $2.1 million in par value of our auction rate securities
pursuant to an offer by the issuer to purchase such securities for approximately
$1.9 million. However, we are unable at this time to predict whether the
purchase of the tendered auction rate securities will be completed or when we
will be able to sell our remaining auction rate securities and for what amount.
Although issuers and market makers are exploring alternatives that may improve
liquidity of our auction rate securities, and the New York Attorney General and
the SEC recently entered into an agreement with Citigroup under which Citigroup
agreed to use its best efforts to facilitate issuer redemptions of auction rate
securities of institutional investors such as us, there is no assurance that
such efforts will be successful and, therefore, there is a risk that there could
be a further decline in the value of our auction rate securities. Continued
failed auctions may affect the fair value of these securities and require us to
further adjust the carrying value of the investment through an impairment
assessment and we may receive less than anticipated proceeds when we sell these
securities, which would reduce the amount of distributions shareholders receive
in the dissolution and liquidation. In addition, we are unable at this time to
predict the ultimate amount of our liabilities because the settlement of our
existing liabilities could cost more than we anticipate and we may incur
additional liabilities arising out of contingent claims that have not been
quantified, are not yet reflected as liabilities on our balance sheet and have
not been included in the estimated range of potential distributions, such as
liabilities relating to our existing lawsuits and claims that have not been
resolved and lawsuits and claims that could be brought against us in the future.
Therefore, if any payments are made with respect to the foregoing, the estimated
range of distributions to shareholders will be negatively impacted and less than
estimated. We are unable at this time to predict what amount, if any, may be
paid on these contingent claims. If the ultimate amount of our liabilities is
greater than what we anticipate, the distribution to our shareholders may be
substantially lower than anticipated. Therefore, we are unable at this time to
predict the precise nature, amount and timing of any distributions due in part
to our inability to predict the ultimate amount of our liabilities.

For further information regarding the expected amount of the distribution to
shareholders, see Liquidation Analysis and Estimates on page 28.

When will the Liquidation be Complete?

The liquidation pursuant to the plan of liquidation will be completed as soon as
practicable. The exact period required for liquidation will depend on our
ability to sell our non-cash assets, settle or otherwise resolve our
liabilities, including contingent liabilities, and complete the dissolution of
the Company and its subsidiaries.

Do Directors and Officers Have Interests in Our Dissolution and the Plan of
Liquidation That Differ From Mine?

In considering the recommendation of our Board to approve our dissolution and
the plan of liquidation, you should be aware that some of our directors and
officers might have interests that are different from or in addition to your
interests as a shareholder. These interests include:

o our current directors and executive officers hold options with
exercise prices above $4.82 to purchase an aggregate of 63,672
shares of common stock. These options have a weighted average
exercise price of $28.92 per share, which options are vested or will
become fully vested prior to our dissolution and will give the
option holders a right to receive a pro rata portion of
distributions to shareholders to the extent the distributions exceed
the option exercise price;

o our current Chairman and CEO, under the terms of his employment
agreement, will receive a $500,000 payment triggered by the
shareholders' approval of our dissolution and plan of liquidation
and he has agreed to waive an additional $500,000 payment triggered
by the shareholders' approval of our dissolution and plan of
liquidation that he would be entitled to under the terms of his
employment agreement; and

o we have prepaid coverage under our director and officer liability
insurance policy for the benefit of our current, former and future
directors and officers through September 30, 2009 and intend to
maintain such insurance coverage and/or "tail" insurance coverage
until completion of the dissolution and execution of the plan of
liquidation and to continue to indemnify our directors and officers
following our dissolution.

In addition, under the terms of their employment agreements, our current
executive officers will receive an aggregate of approximately $1,865,000 in
severance payments in connection with the termination or non-renewal of their
employment.

For information as to the number of shares of our common stock beneficially
owned by our directors and officers, see page 74.

What are the Tax Consequences of the Liquidation?

As a result of our liquidation, for federal income tax purposes shareholders
will recognize a gain or loss equal to the difference between (1) the sum of the
amount of cash distributed to them and the aggregate fair market value of any
property distributed to them, and (2) their tax basis for

their shares of our stock. A shareholder's tax basis in the shareholder's shares
will depend upon various factors, including the shareholder's cost and the
amount and nature of any distributions received with respect to the shares. Any
loss generally will be recognized only when the final distribution from us has
been received, which could be a few years after our dissolution.

A brief summary of the material federal income tax consequences of our
dissolution and the plan of liquidation appears on page 34 of this proxy
statement. Tax consequences to shareholders may differ depending on their
circumstances. You should consult your tax advisor as to the tax effect of your
particular circumstances.

Do I Have Dissenters' Appraisal Rights?

No. Under New Jersey law, shareholders will not have dissenters' appraisal
rights with respect to the dissolution and the plan of liquidation.

What Do Shareholders Need to do Now?

After carefully reading and considering the information contained in this proxy
statement, each shareholder should complete and sign the enclosed proxy card and
return it in the enclosed return envelope as soon as possible so that his or her
shares may be represented at the meeting. A majority of shares entitled to vote
must be represented at the meeting to enable us to conduct a vote on our
dissolution and the plan of liquidation at the meeting.

Who Can Help Answer Questions?

If you have any additional questions about the proposed dissolution and the plan
of liquidation, you should contact the Company's Legal Department at
954-331-4243. Our annual report on Form 10-K for the year ended June 28, 2008,
filed on November 7, 2008 with the Securities and Exchange Commission, which we
refer to as the Commission, and including financial statements, are available
free of charge through the Commission's electronic data system at www.sec.gov
and on the Company's website at www.concord-camera.com. To obtain additional
copies of our filings, or this proxy statement, which we will provide to you
free of charge, either write to Concord Camera Corp., 4000 Hollywood Blvd., 6th
Floor North Tower, Hollywood, Florida 33021, Attention: Legal Department or
access our website at www.concord-camera.com. Our other public filings can also
be accessed at the Commission's web site at www.sec.gov.

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SUMMARY OF PROPOSAL FOR DISSOLUTION AND
PLAN OF DISSOLUTION AND LIQUIDATION

This summary highlights information from this proxy statement that we believe is
the most important information to be considered by shareholders in determining
how to vote on the dissolution and the plan of liquidation described in this
proxy statement. This summary may not contain all of the information that is
important to you, and we encourage you to read this proxy statement in its
entirety. The information contained in this summary is qualified in its entirety
by, and should be read in conjunction with, the detailed information appearing
elsewhere in this proxy statement. We have included references to other portions
of this proxy statement to direct you to a more complete description of the
topics presented in this summary.

Proposal for Dissolution and Plan of Liquidation (See pages 20)

Our Board has recommended our dissolution and the adoption of the plan of
liquidation attached hereto as Annex A. If our shareholders approve our
dissolution and the plan of liquidation, our non-cash assets will be sold or
otherwise disposed of, our liabilities will be paid or otherwise resolved, and
any remaining assets anticipated to be in the form of cash, will be distributed
to our shareholders.

Reasons for Approving Dissolution and the Plan Liquidation (See pages 22)

In determining to recommend our dissolution and the adoption of the plan of
liquidation on October 29, 2008, our Board carefully reviewed and considered the
terms and conditions of the plan of liquidation and the transactions
contemplated by the plan of liquidation, as well as other alternatives available
to us. Despite devoting substantial time, effort and resources, we had not been
able to identify a buyer or strategic partner willing to firmly commit to
acquire us, in whole or in part, on financial and other terms which the Board
viewed as reasonably likely to provide greater realizable value to our
shareholders than the complete dissolution and liquidation of the Company in
accordance with the plan of liquidation. Our Board also reviewed and carefully
considered a liquidation analysis prepared by us and reviewed and analyzed by an
independent asset recovery company engaged by the Board's Special Committee
which reflects estimated liquidating distributions to shareholders of $3.25 to
$4.82 per share. Our Board determined that our dissolution and liquidation in
accordance with the plan of liquidation would provide the maximum realizable
value available to shareholders.

Plan of Liquidation (See pages 26)

Under the plan of liquidation:

o our Company will be dissolved;

o non-cash assets will be sold and monetized or otherwise disposed of;

o known liabilities will be settled and paid or otherwise resolved;

o reserves will be established for contingent liabilities; and

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o our remaining assets, anticipated to be in the form of cash, will be
distributed to our shareholders.

Distributions to Shareholders (See page 28)

Based on the liquidation analysis prepared by us and reviewed and analyzed by an
independent financial advisor engaged by the Board's Special Committee, we
estimate that over time shareholders will receive one or more distributions that
in the aggregate range from approximately $3.25 to $4.82 per share. Actual
distributions could be higher or lower.

The amount and timing of liquidating distributions are subject to many
uncertainties, including our ability to sell and monetize our non-cash assets in
the time frames and for the amounts estimated or at all and our ability to
predict the ultimate amount of our existing liabilities, some of which have not
been finally resolved and/or quantified. In addition, we may incur additional
liabilities, such as liabilities relating to lawsuits that could be brought
against us in the future, and the settlement of our existing liabilities or
contingent claims could cost more than we anticipate, which could result in a
substantially lower distribution to our shareholders. Therefore, we are unable
at this time to predict the precise nature, amount and timing of any
distributions due in part to our inability to predict the ultimate amount of our
liabilities.

Risks Associated with the Plan of Liquidation (See page 14)

Risks associated with the plan of liquidation include, but are not limited to,
the following:

o shareholders may not approve our dissolution and the plan of
liquidation;

o our anticipated timing of the dissolution and liquidation may not be
achieved;

o we cannot determine with certainty the amount of distributions to
shareholders;

o continued failure of auctions of our auction rate securities or
sales of our auction rate securities below their current carrying
value can effect the timing of the dissolution and liquidation and
the amount of distributions shareholders receive in the dissolution
and liquidation;

o we may not be able to sell our property in The People's Republic of
China, also known as the PRC, or, if we are able to sell our
property, the net proceeds from such sale may be less than the
amount estimated or its current carrying value;

o we may not be able to settle all of our liabilities to our
creditors;

o shareholders could be liable to the extent of liquidating
distributions received, if contingent reserves are not sufficient to
satisfy our liabilities;

o shareholders may not be able to recognize a loss for federal income
tax purposes until they receive a final distribution from us;

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o our stock transfer books will close on the final record date after
which it may not be possible for shareholders to trade their shares
of our stock;

o we expect to terminate registration of our common stock under the
Securities Exchange Act of 1934, which will substantially reduce
publicly available information about us;

o no further shareholder approval will be required for sales or other
disposition of assets or other actions, unless required by New
Jersey law;

o our Board may, subject to New Jersey law, abandon or delay
implementation of the plan of liquidation even if approved by our
shareholders;

o we may be the potential target of an acquisition; and

o our Board members may have a potential conflict of interest in
recommending approval of the dissolution and the plan of
liquidation.

Our Officers and Directors May Have Interests in Our Dissolution and the Plan of
Liquidation That are Different from Their Interests as Shareholders (See page
30)

Under the terms of his employment agreement, our current Chairman and CEO will
receive a $500,000 payment triggered by the shareholders' approval of our
dissolution and plan of liquidation and he has agreed to waive an additional
$500,000 payment triggered by the shareholders' approval of our dissolution and
plan of liquidation that he would be entitled to under the terms of his
employment agreement.

In addition, our current executive officers have employment agreements which
provide for the payment of the severance amounts set forth in the table below
upon the termination or non-renewal of their employment agreements.

Name Title Severance Amount
---- ----- ----------------

Ira B. Lampert Chairman, Chief Executive Officer and President $1,073,000

Blaine A. Robinson Vice President- Finance, Treasurer and Assistant Secretary $244,000

Urs W. Stampfli Senior Vice President and Director of Global Sales & Marketing $296,000

Scott Lampert Vice President, General Counsel and Secretary $239,000

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In addition to the shares of our common stock owned by officers and directors,
which are set forth on page 74, officers and directors hold options to purchase
our stock. Information concerning these options is set forth on page 31.

In connection with our dissolution and the plan of liquidation, we intend to
continue to indemnify our directors and officers and have purchased and will
maintain throughout the wind down period a director and officer liability
insurance policy and/or a "tail" insurance policy for the benefit of our
current, former and future directors and officers.

Appraisal Rights (See page 34)

Shareholders will not have dissenters appraisal rights with respect to the
dissolution and the plan of liquidation.

Certain United States Federal Income Tax Consequences (See page 34)

As a result of our liquidation, for United States federal tax purposes,
shareholders generally will recognize gain or loss equal to the difference
between (i) the sum of the amount of cash distributed to them and the aggregate
fair market value, at the time of distribution, of any property distributed to
them (including transfers of assets to a liquidating trust), and (ii) their tax
basis in their shares of our capital stock. Any loss generally may be recognized
only when the final distribution from us has been received.

A brief summary of certain United States federal and foreign income tax
consequences of our dissolution and the plan of liquidation appears beginning on
page 34 of this proxy statement. Tax consequences to shareholders may differ
depending on their circumstances. You should consult your tax advisor as to the
tax effects of your particular circumstances.

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CERTAIN RISKS RELATED TO THE DISSOLUTION AND
THE PLAN OF LIQUIDATION

You should consider the following risks in deciding whether to vote in favor of
the proposal to approve our dissolution and the plan of liquidation. In
addition, we strongly urge you to consider the other information set forth in
this proxy statement and those risks set forth under the caption "Risk Factors"
and elsewhere in our Annual Report on Form 10-K for the fiscal year ended June
28, 2008, filed with the Commission.

Our Shareholders May Not Approve our Dissolution and Plan of Liquidation.

Our dissolution in accordance with the plan of liquidation is dependent upon
approval by our shareholders. If our shareholders fail to approve our
dissolution and the plan of liquidation, we will then evaluate the alternatives
available to us at that time, including, but not limited to, continuing to
operate our business or selling our business, non-cash assets or the company. We
believe the announcement of the recommendation by our Board of our dissolution
and the adoption of the plan of liquidation and the filing of this proxy
statement will result in the loss of customers, suppliers and other business
relationships. Pending our shareholders' vote on our dissolution and the plan of
liquidation, we have ceased manufacturing products, purchasing materials and
products and undertaking commitments for sales of our products except for those
products that we have remaining in inventory. As a result, we believe that many,
if not all, of our customers, including our two major customers, will transition
their business to our competitors. Therefore, if our shareholders fail to
approve our dissolution and the plan of liquidation, our business will be
materially and adversely impacted and we will not be able to continue to operate
our business as it existed prior to the recommendation of our dissolution and
the adoption of the plan of liquidation by our Board and may not be able to
operate our business at all.

Our Anticipated Timing of the Dissolution and Liquidation May Not be Achieved.

As soon as practicable after the Annual Meeting, if our shareholders approve our
dissolution and the plan of liquidation, we intend to file a certificate of
dissolution with the Department of Treasury of the State of New Jersey and sell
and monetize our remaining non-cash assets. There are a number of factors that
could delay our anticipated timetable, including, but not limited to, the
following:

o lawsuits or other claims asserted against us;

o legal, regulatory or administrative delays;

o inability to sell and monetize or delays in selling and monetizing
certain non-cash assets on terms acceptable to us;

o delays in settling our remaining liabilities; and

o delays in liquidating and dissolving subsidiaries in domestic and
foreign jurisdictions.

We Cannot Determine With Certainty the Amount of Distributions to Shareholders.

We cannot determine at this time the amount of distributions to our shareholders
pursuant to the plan of liquidation. This determination depends on a variety of
factors, including, but not limited to, the amount required to satisfy or settle
known and unknown liabilities, the resolution of litigations, including our
existing lawsuits, and other contingent liabilities, the net proceeds, if any,
from the sale and monetization of our remaining non-cash assets, including our
accounts receivable, inventory, property in the PRC and auction rate securities,
and other factors. Examples of uncertainties that could reduce the value of or
eliminate distributions to our shareholders include unanticipated costs relating
to:

o the defense, satisfaction or settlement of lawsuits or other claims
that may be made or threatened against us in the future;

o the pending lawsuits and claims against us, including in the event a
proposed settlement in a pending lawsuit is rejected by the court or
is not effected for any other reason;

o delays in our liquidation and dissolution, including due to our
inability to sell and monetize non-cash assets or settle claims; and

o delays in our liquidating and dissolving subsidiaries in domestic
and foreign jurisdictions.

As a result, we cannot determine with certainty the amount of distributions to
our shareholders.

Continued Failure of Auctions of our Auction Rate Securities or Sales of our
Auction Rate Securities Below their Current Carrying Value Can Affect the Timing
of the Dissolution and Liquidation and the Amount of Distributions Shareholders
Receive in the Dissolution and Liquidation.

As of September 27, 2008, the carrying value of our auction rate securities was
$17.1 million. This carrying value is net of an unrealized loss of approximately
$5.1 million which was recorded as of September 27, 2008 due to our
determination that the fair value of these securities as of that date was less
than their par value. During our fiscal year ended June 28, 2008, we received
net proceeds of $6.9 million from the sale of auction rate securities at 100% of
par value, of which $1.9 million was received after market uncertainties and
liquidity issues arose in the market for auction rate securities. Additionally,
we have experienced redemptions of approximately $1.8 million of our auction
rate securities at 100% of par value subsequent to June 28, 2008 and have
consented to tender $2.1 million in par value of our auction rate securities
pursuant to an offer by the issuer to purchase such securities for approximately
$1.9 million. However, we are unable at this time to predict whether the
purchase of the tendered auction rate securities will be completed or when we
will be able to sell our remaining auction rate securities and for what amount.
Issuers and market makers are exploring alternatives that may improve

liquidity of our auction rate securities and the New York Attorney General and
the Commission recently entered into an agreement with the investment bank that
sold us our auction rate securities under which the investment bank agreed to
use its best efforts to facilitate issuer redemptions of auction rate securities
of institutional investors such as us. However, we cannot assure you that these
efforts will be successful and, therefore, there is a risk that there could be a
further decline in value of our auction rate securities. Continued failed
auctions may affect the fair value of these securities, and require us to
further adjust the carrying value of the investment through an impairment
assessment and we may receive less than anticipated proceeds when we sell these
securities, which would reduce the amount of distributions shareholders receive
in the dissolution and liquidation.

We May Not be Able to Sell our Property in The People's Republic of China or, if
We are Able to Sell our Property, the Net Proceeds From Such Sale May be Less
than the Amount Estimated or its Current Carrying Value.

Our ability to sell our property in the PRC is substantially dependent upon the
current real estate market and economic conditions in the area of the PRC where
the property is located. The PRC real estate market and business environment is
currently under significant pressure, in part due to the worldwide financial
crisis Additionally, we are uncertain what impact our announcement of the
recommendation by our Board of our dissolution and the adoption of the plan of
liquidation will have on our ability to sell our property. We cannot assure you
that we will be able to sell our property in the PRC for the amount estimated or
its carrying value for purposes of calculating the potential distributions to
shareholders or at all.

We May Not be Able to Settle All of our Liabilities to Creditors.

We have current and future liabilities to creditors. Our estimated distribution
to shareholders takes into account all of our known liabilities and certain
possible contingent liabilities and our best estimate of the amount reasonably
required to satisfy such liabilities. As part of the wind-down process, we will
attempt to settle all liabilities with our creditors. We cannot assure you that
unknown liabilities that we have not accounted for will not arise, that we will
be able to settle all of our liabilities or that they can be settled for the
amounts we have estimated for purposes of calculating the range of distribution
to shareholders. If we are unable to reach an agreement with a creditor relating
to a liability, that creditor may bring a lawsuit against us. Amounts required
to settle liabilities or defend lawsuits in excess of the amounts estimated by
us will reduce the amount of net proceeds available for distribution to
shareholders.

Shareholders Could Be Liable to the Extent of Liquidating Distributions Received
if Contingent Reserves are Insufficient to Satisfy our Liabilities.

If we fail to create an adequate contingency reserve for payment of our expenses
and liabilities, or if we transfer our assets to a liquidating trust and the
contingency reserve and the assets held by the liquidating trust are less than
the amount ultimately found payable in respect of expenses and liabilities, each
shareholder could be held liable for the payment to creditors of such
shareholder's pro rata portion of the deficiency, limited, however, to the
amounts previously received by the shareholder in distributions from us or the
liquidating trust. Accordingly, you

could be required to return some or all distributions made to you. In such an
event, you could receive nothing under the plan of liquidation.

If a court holds at any time that we have failed to make adequate provision for
our expenses and liabilities or if the amount ultimately required to be paid in
respect of such liabilities exceeds the amount available from the contingency
reserve and the assets of the liquidating trust, if any, our creditors could
seek an injunction against the making of distributions under the plan of
liquidation on the grounds that the amounts to be distributed are needed to
provide for the payment of our expenses and liabilities. Any such action could
delay or substantially diminish the cash distributions to be made to
shareholders and/or holders of beneficial interests of the liquidating trust
under the plan of liquidation.

Shareholders May Not Be Able to Recognize a Loss for Federal Income Tax Purposes
Until They Receive a Final Distribution From Us.

As a result of our liquidation, for United States federal income tax purposes,
shareholders will recognize gain or loss equal to the difference between (i) the
sum of the amount of cash distributed to them and the aggregate fair market
value at the time of distribution of any property distributed to them (including
transfers of assets to a liquidating trust), and (ii) their tax basis in their
shares of our capital stock. Any loss may generally be recognized only when the
final distribution has been received from us.

In Connection With the Dissolution, Our Stock Transfer Books Will Close, After
Which it May Not Be Possible for Shareholders to Trade in, or Transfer, Our
Stock.

In connection with the dissolution, we intend to delist our common stock from
the NASDAQ Global Market, close our stock transfer books and discontinue
recording transfers of our common stock at which time common stock and stock
certificates evidencing the common stock will not be assignable or transferable
on our books except by will, intestate succession or operation of law.

We Expect to Terminate Registration of Our Common Stock Under the Securities
Exchange Act of 1934, as Amended, Which Will Substantially Reduce Publicly
Available Information About the Company.

Our common stock is currently registered under the Securities Exchange Act of
1934, as amended, or the Exchange Act, which requires that we, and our officers
and directors with respect to Section 16 of that Act, comply with certain public
reporting and proxy statement requirements thereunder. Compliance with these
requirements is costly and time-consuming. We anticipate that, if our
shareholders approve our dissolution and the plan of liquidation, in order to
curtail expenses, we will, after filing a certificate of dissolution,
discontinue making filings under the Exchange Act. However, we anticipate that
we would continue to file with the Commission current reports on Form 8-K to
disclose material events relating to our dissolution and the plan of liquidation
until the effectiveness of the termination of the registration of our common
stock by filing a Form 15 with the Commission.

No Further Shareholder Approval Will Be Required.

Approval of our dissolution and the plan of liquidation requires the affirmative
vote of a majority of the votes cast at a meeting duly called at which a quorum
is present. If our shareholders approve our dissolution and the plan of
liquidation, we will be authorized to cease operations, sell, license or
otherwise dispose of our non-cash assets and dissolve the Company and its
subsidiaries without further approval of our shareholders, unless required to do
so by New Jersey law.

Our Board May Abandon or Delay Implementation of the Plan of Liquidation Even if
Approved by our Shareholders.

Even if our shareholders approve our dissolution and the plan of liquidation,
our Board has reserved the right, in its discretion, to the extent permitted by
New Jersey law, to abandon or delay implementation of the plan of liquidation,
in order, for example, to permit us to pursue new business opportunities or
strategic transactions.

We May be the Potential Target of an Acquisition.

Until we dissolve and terminate registration of our common stock, we will
continue to exist as a public company. We could become an acquisition target,
through a hostile tender offer or other means, as a result of our business
operations, non-cash assets, cash holdings or for other reasons. If we become
the target of a successful acquisition, the Board could potentially decide to
either delay or, subject to applicable New Jersey law, revoke our dissolution
and the plan of liquidation, and our shareholders may not receive any proceeds
that would have otherwise been distributed in connection with the liquidation.

Our Board Members May have a Potential Conflict of Interest in Recommending
Approval of our Dissolution and the Plan of Liquidation.

As a result of the right to acquire shares of our common stock pursuant to stock
options that may be exercised, compensation and benefits payable as a result of
termination of employment or other events, an indemnification insurance policy
purchased for the benefit of directors and/or our indemnification obligations to
directors, members of our Board may be deemed to have a potential conflict of
interest in recommending approval of our dissolution and the plan of
liquidation.

FORWARD-LOOKING STATEMENTS

The statements contained in this proxy statement that are not historical facts
are "forward-looking statements" (as such term is defined in the Private
Securities Litigation Reform Act of 1995), which can be identified by the use of
forward-looking terminology such as: "estimates," "projects," "anticipates,"
"expects," "intends," "believes," "plans," "forecasts" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in such forward-looking statements as a result
of certain factors. For a discussion of some of the factors that could cause
actual results to differ, see the discussion under "Risk Factors" above. We wish
to caution the reader that these forward-looking statements, including, without
limitation, statements regarding the dissolution and liquidation of the company
pursuant to the terms of the plan of liquidation, the amount of any liquidating
distributions and the timing of any liquidating distributions, and other
statements contained in this proxy statement regarding matters that are not
historical facts, are only estimates or predictions. No assurance can be given
that future results will be achieved. Actual events or results may differ
materially as a result of risks facing us or actual results differing from the
assumptions underlying such statements. Any forward-looking statements contained
in this proxy statement represent our estimates only as of the date of this
proxy statement, or as of such earlier dates as are indicated herein, and should
not be relied upon as representing our estimates as of any subsequent date.
While we may elect to update forward-looking statements at some point in the
future, unless required by applicable law, we specifically disclaim any
obligation to do so, even if our estimates change.

PROPOSAL ONE:

APPROVAL OF OUR DISSOLUTION AND THE PLAN OF DISSOLUTION AND LIQUIDATION

General

Our Board is proposing our dissolution and the plan of liquidation for approval
by our shareholders at the Annual Meeting. Our Board approved our dissolution
and the plan of liquidation by unanimous vote on October 29, 2008. A copy of the
plan of liquidation is attached as Annex A to this proxy statement. Certain
material features of the plan of liquidation are summarized below. (See also the
more complete summary of the plan of liquidation beginning on page 26.)
Shareholders should read the plan of liquidation in its entirety.

If our shareholders approve our dissolution and the plan of liquidation, we will
file a Certificate of Dissolution of the Company with the Department of Treasury
of the State of New Jersey. Thereafter, we will conduct business operations only
to the extent necessary to wind up our business affairs, terminate commercial
agreements and relationships and withdraw from any jurisdiction in which we are
qualified to do business, sell our properties and non-cash assets, including our
intellectual property and other intangible assets, settle and pay or attempt to
adequately provide for the payment of all of our liabilities, establish a
contingency reserve designed to settle and pay any additional liabilities,
including contingent liabilities and expenses of the dissolution and liquidation
and make distributions to shareholders, in accordance with the plan of
liquidation.

Our Board may, at any time, retain one or more third parties to assist and/or
complete the plan of liquidation and the liquidation of our remaining assets and
distribute proceeds from the sale of non-cash assets to our shareholders
pursuant to the plan of liquidation. These third parties may involve a
liquidating trust, which, if created, would succeed to all of the assets
transferred to it, and would assume related liabilities and obligations. Our
Board may appoint one or more of our directors or officers or third parties to
act as trustee or trustees of such liquidating trust. Your approval of our
dissolution and the plan of liquidation will also constitute your approval of
any such transfer and timeframe and the appointment of such trustees.

During the liquidation of our assets, we may pay to our officers, directors,
employees and agents, or any of them, including, but not limited to, lawyers,
accountants, auditors, tax advisors and other professionals, compensation for
services rendered in connection with the implementation and execution of the
plan of liquidation. Your approval of our dissolution and the plan of
liquidation will constitute your approval of the payment of any such
compensation.

Background and Reasons for the Proposed Dissolution and the Plan of Liquidation

Business

We incorporated in New Jersey in 1982. We design, develop, manufacture,
outsource and sell easy-to-use 35mm single-use and traditional film cameras. We
manufacture and assemble most of our single-use cameras and certain of our
traditional film cameras at our manufacturing facilities in the PRC and
outsource the manufacture of certain of our single-use and traditional

film cameras for sale to retail sales and distribution customers, who we refer
to as RSD customers. We sell our private label and brand-name products to our
RSD customers worldwide either directly or through third-party distributors.

In addition to our single-use and traditional film camera products, we
previously sold digital cameras. In fiscal 2004, we initiated a strategic review
process to determine how we may better compete in the digital camera market,
increase sales of our single-use cameras and reduce our operating costs. The
strategic review, which continued through Fiscal 2007, led to our initiating a
restructuring plan and cost-reduction initiatives and resulted in our exiting
the digital camera market in Fiscal 2007.

In Fiscal 2005, we initiated a new business initiative to identify, assess and,
as appropriate, commercialize new business opportunities and products. As a
result of this initiative, we have introduced a limited number of new products.
To date, sales of our new products have not been material and we are no longer
marketing or selling such new products.

The Film Camera Market

Our products include 35mm single-use and traditional film cameras. Our
single-use cameras are inexpensive, easy-to-use cameras that are sold preloaded
with 35mm film and batteries and are designed to be used for only one roll of
film by the consumer. They include outdoor, flash, zoom and underwater models.
After use, the consumer returns the entire camera to the photo processor who
extracts the film and either disposes of the used single-use camera or returns
and/or sells it for recycling uses.

Our traditional film cameras are inexpensive, easy-to-use cameras that are
designed to be reloaded with 35mm silver halide film multiple times by the
consumer. They range from entry-level to fully featured zoom models and include
models used by certain RSD customers to support special promotion and loyalty
programs offered to their customers.

We sell our 35mm single-use and traditional film cameras under the Polaroid and
Polaroid FunShooter brands and under private label brands to our RSD customers
worldwide either directly or through third-party distributors. We designed,
developed and manufactured most of our single-use cameras and outsourced the
manufacture of certain of our single-use and traditional film cameras.

Based on available third-party market research data, after years of robust
growth, the North America single-use camera market reached its peak of 218
million units sold in calendar year 2004. Total North America sales of
single-use cameras declined to 202 million units in calendar year 2005, declined
to 172 million units in calendar year 2006, declined to an estimated 129 million
units in calendar year 2007 and are projected to decline to 91 million units in
calendar year 2008. Similarly, based on available third-party market research
data, in the U.S. market, the calendar year 2005 traditional film camera sales
in the United States were reported at 4.3 million units, a 36% decrease from the
previous year. The decline of traditional film cameras continued during calendar
year 2006 at approximately 53% and during calendar year 2007 at approximately
45% and is projected to decline during calendar year 2008 a further 54%, with
sales projected at 0.5 million units.

In addition to the declining markets, the single-use camera and traditional film
camera markets are highly competitive with many companies marketing products to
the retail market. Our key competitors in the single-use camera market are
FujiFilm Corporation and Eastman Kodak Company ("Kodak"), both of whom have
greater resources than we have or may reasonably be expected to have in the
foreseeable future and are our sole suppliers of film for our 35mm single-use
and traditional film camera products. In addition, Kodak is our largest supplier
of used single-use cameras, which we recycle and sell to our customers.

As a result of the market challenges that we have faced, we have experienced
substantial operating losses since fiscal 2004. Our operating losses during our
2005, 2006, 2007 and 2008 fiscal years were $44.9 million, $19.6 million, $11.7
million and $12.6 million, respectively, on net sales of $174.3 million, $137.5
million, $86.7 million and $74.1 million, respectively.

Strategic Alternatives

On August 14, 2006, our Board established a committee of the Board, or the
Special Committee, consisting of three independent directors, to investigate,
evaluate and/or analyze strategic alternatives for us and make any
recommendations to our Board with respect to such strategic alternatives that
the Special Committee determines to be appropriate. Our Board established the
Special Committee due to the continuing decline in our primary product market
and the accompanying losses being incurred by us on an annual basis.

On or around December 14, 2006, the Special Committee retained Raymond James &
Associates, Inc., or Raymond James, to act as the Special Committee's financial
advisor in connection with the consideration of the various strategic
alternatives for us. The Special Committee also retained an outside law firm to
advise it on related matters.

Between December 14, 2006, and March 20, 2007, representatives of Raymond James
conducted substantial due diligence on our Company, business and operations and
an analysis of our then current situation, including our then current business
and financial positions, our cash position, the historical performance of our
stock, and other matters. Based on the analysis performed by Raymond James and
other information, the Special Committee considered several alternative
strategies, including: (i) continuing current operations; (ii) making strategic
acquisitions; (iii) a sale or other disposition of all or a significant part of
the Company or its business; (iv) a "going-private" transaction; and (v) a
liquidation of the Company. Raymond James continued its analysis of our then
current situation, including visiting some of our locations, including our
manufacturing facility in the PRC, and reviewing appraisals of the value of
certain of our assets.

During 2007, our Board met to consider strategies to address our continuing
financial losses and our deteriorating financial condition (see the selected
consolidated financial and operating data on page 38), business and operations,
and determined that the prospects for our business were likely to continue to
deteriorate due to continuing declines in the global single-use camera market,
both in unit volumes and selling prices, and our likely continued difficulty in
competing and realizing a profit as a small public company.

On June 25, 2007, the Special Committee authorized Raymond James to seek an
acquirer for the Company. Raymond James and the Special Committee contacted
domestic and international

strategic and financial merger and acquisition prospects. During the process of
identifying and evaluating various merger and acquisition alternatives,
interested parties executed confidentiality agreements and received non-public
evaluation materials about our business and operations. Throughout the process,
members of our management team assisted representatives of Raymond James with
their efforts. We participated in numerous telephonic and in-person business and
financial overview presentations and made ourselves available for a number of
question and answer sessions, conference calls and meetings. During this time,
the Special Committee held more than twenty formal meetings. However, efforts by
Raymond James to secure an acquirer were not successful.

Concurrently with the Special Committee's effort to seek an acquirer for us, the
Special Committee authorized our management to conduct discussions with certain
third parties about their interest in a possible collaboration, joint venture or
sale of the Company or specific Company assets. Management had several
discussions with these third parties between April 2007 and October 2008.
However, none of these third parties were willing to firmly commit to acquire us
on financial and other terms which the Board viewed as reasonably likely to
provide greater realizable value to our shareholders than the complete
dissolution and liquidation of the Company in accordance with the plan of
liquidation.

Throughout Fiscal 2008, we continued to assess our ability to continue
manufacturing, marketing and/or selling single-use cameras. We determined that
it would not be advisable to continue our business as a small public company
based on a number of factors, including the continuing market decline, both in
unit volumes and selling prices, the increased cost of certain components and
labor, the significant competition and volatility in this industry, the lack of
market acceptance of our new products, the likelihood that we would continue to
incur significant net losses for an extended period of time, and, that even if
successful, the realization of significant returns on our investments in the
camera business or new products were uncertain and could take years to achieve.

On October 29, 2008, the Special Committee and our Board each held meetings for
the purpose of considering our dissolution and the plan of liquidation and the
other alternatives available to us. The Special Committee and our Board also
considered information concerning our financial results for our Fiscal 2008 and
the first quarter of Fiscal 2009, our financial forecast for the remainder of
Fiscal 2009, our liquidation analysis, a report of the results of the review and
analysis of our liquidation analysis by Focus Management Group USA, Inc., a firm
engaged by the Special Committee to review and analyze our liquidation analysis,
and other information concerning our operations and financial condition. Also
present at these meetings were members of management. At these meetings, the
terms of the proposed plan of liquidation and our Board's fiduciary duties were
discussed. Management presented our analysis of the alternatives available to
us, including continuing operations and liquidation, and the forecasted net
assets that we and the Special Committee's advisor, Focus Management Group USA,
Inc., believed would be available for distribution to shareholders pursuant to
the plan of liquidation. After lengthy discussions, our Board unanimously
adopted the plan of liquidation and recommended our dissolution, subject to
shareholder approval. Our Board concluded that our dissolution in accordance
with the plan of liquidation was advisable and in the best interests of our
shareholders.

At the October 29, 2008 meeting, in order to protect shareholder value pending
our shareholders' vote on our dissolution and the plan of liquidation, our Board
also authorized us to, among other things, cease manufacturing products,
purchasing materials, and undertaking commitments for sales of our products,
except for those products that we have remaining in inventory, and commence
sales of our non-cash remaining assets.

Our Board believed that a liquidation and distribution of our net assets after
satisfaction or settlement of our liabilities and the costs of liquidation had a
greater probability of producing more value to our shareholders than other
alternatives, especially in light of our inability to successfully sell our
operating assets for more than their estimated liquidation value. Among the
factors that our Board considered were the following:

o our inability to find a buyer or strategic partner;

o the low probability that we would obtain, within a reasonable period
of time under the circumstances, any viable offer to engage in an
attractive alternative transaction;

o an operating loss from our continuing operations for Fiscal 2009 and
the likelihood that we would continue to incur operating losses in
future years from our current source of revenue;

o the significant risks associated with focusing solely on single-use
and traditional film camera sales, including the risk that positive
operating cash flow or operating income would not be achieved and
that a significant amount of our cash could be spent to fund our
operations and new products without any assurance of the success of
our business model;

o the maturity of the single-use and traditional film camera markets,
intense competition and volatility within these markets and our
position within these markets;

o the lack of market acceptance of the new, non-photographic products
introduced by the Company and the risk that we will not be able to
introduce other successful new products within a reasonable period
of time;

o our Board's belief that a liquidation and distribution of our net
assets after satisfaction or settlement of our liabilities and the
costs of liquidation could produce more value to our shareholders
than if the shareholders held their shares, because as of the date
of our Board's recommendation of the dissolution of the Company and
the adoption of the plan of liquidation, the estimated value of our
assets in excess of likely liabilities and the costs of liquidation
exceeded, and for some time had exceeded, the market value of our
outstanding common stock;

o our Board's belief that it would be in the best interests of our
shareholders to allow our shareholders to determine how to best
utilize available net assets rather than us pursuing an acquisition
strategy involving the investment of our cash and other assets in
businesses outside of our traditional business model;

o prevailing economic conditions both generally and specifically
relating to the single-use and traditional film camera markets; and

o the possibility that our common stock would be delisted from the
NASDAQ Global Market in the future if we do not meet their continued
listing requirements as a result of continued operating losses and
lower prices for shares of our common stock.

Our Board also identified and considered potential negative factors involved in
the plan of liquidation, including the possibility that liquidation would not
yield distributions to shareholders in excess of the amount that shareholders
could have received upon a sale of the Company or a sale of shares on the open
market, the uncertainty of our timing of distributions to shareholders, that
shareholders will lose the opportunity to capitalize on the potential business
opportunities and possible future growth of our business and on our potential
future success had we elected to pursue an acquisition strategy or otherwise use
our available cash to continue as a going concern and develop new products, that
distributions might not be made in the near future and that under applicable law
our shareholders could be required to return to creditors some or all of the
distributions made to shareholders in the liquidation.

The foregoing discussion of the information and positive and negative factors
considered and given weight by our Board is not intended to be exhaustive. Our
Board did not quantify or otherwise assign relative weights to the specific
factors considered in reaching its determination.

Prior to and at the October 29, 2008 meeting, our Board received comparisons of
our estimated liquidation value to the prices at which our common stock was
trading at different points in time and analyzed the results of our and Raymond
James' investigation of various acquisition and strategic opportunities and our
financial forecast for the remainder of Fiscal 2009. Our Board determined not to
continue to operate the Company and to return the net proceeds after the sale
and monetization of our non-cash assets and satisfaction or settlement of our
liabilities and the costs of liquidation to our shareholders to allow each
shareholder to make such shareholder's own investment decisions. Based on this
information, our Board believes that distribution to our shareholders of the net
proceeds after the sale and monetization of our non-cash assets and satisfaction
or settlement of our liabilities and the costs of liquidation will have the
highest probability of returning the greatest value to the shareholders as
compared to other alternatives.

If our shareholders do not approve our dissolution and the plan of liquidation,
our Board will explore the alternatives then available for the future of the
Company. We believe the value of our business will be materially and adversely
impacted after the announcement of the recommendation of our dissolution and the
adoption of the plan of liquidation by our Board and the filing of this proxy
statement. In particular, in order to protect shareholder value pending our
shareholders' vote on our dissolution and the plan of liquidation, we have
ceased manufacturing products, purchasing materials and undertaking commitments
for sales of our products, except for those products that we have remaining in
inventory. As a result, we believe that many, if not all, of our customers,
including our major customers, will transition their business to our
competitors. Therefore, if our shareholders do not approve our dissolution and
the plan of liquidation, we will not be able to continue to operate our business
as it existed prior to our Board's recommendation of our dissolution and the
adoption of the plan of liquidation and may not be able to operate our business
at all. These factors raise substantial doubt about our ability

to continue as a going concern. Consequently, our independent registered public
accounting firm has included an explanatory paragraph addressing these factors
in their report in our Annual Report on Form 10-K for our fiscal year ending
June 28, 2008.

Description of Plan of Liquidation

The plan of liquidation provides that the Company will be dissolved in
accordance with the Business Corporation Act of New Jersey, or the Business
Corporation Act, and will continue its activities thereafter solely for the
purposes of preserving the value of its assets, winding up its affairs, paying
its liabilities and distributing the balance of its net assets to its
shareholders.

Pursuant to the plan of liquidation, the Company is authorized to sell, license
or otherwise dispose of all of its non-cash assets to the extent and at such
times and for such consideration as the Board deems in the best interests of the
Company and its shareholders. No further vote of shareholders will be required
in connection with the sale of assets, unless required by New Jersey law. The
Company will collect its accounts receivable and other debts and claims owing to
the Company to the extent feasible and cost efficient.

The plan of liquidation requires the Company to settle and pay, or make
reasonable provision to pay, all liabilities which are now known to or later
identified by the Company, and to establish a reserve reasonably likely to be
sufficient to satisfy claims against the Company, including claims pursuant to
existing and future lawsuits. We also must reserve funds sufficient to pay the
estimated expenses to complete the dissolution and liquidation.

Our Board may, at its option, elect to follow procedures set forth in Section
14A:12-12 of the Business Corporation Act, which provides that we may give
notice of the dissolution to all persons having a claim against us pursuant to
Section 14A:12-12 of the Business Corporation Act, and settle and pay, or make
adequate provision for payment of, all claims made against us and not rejected.
Any creditor who does not make a claim pursuant to the notice given will be
barred forever from suing on such claim, unless the creditor can show good cause
for not having previously filed his claim.

Any proceeds remaining after payment of liabilities and making the provisions
for known and unknown contingent claims as set forth above will be distributed
to the shareholders in proportion to their shareholdings. Such distributions may
occur in a single distribution or in series of distributions in such amounts and
at such times as our Board, or if a liquidating trust is utilized as described
below, the trustee or trustees of the trust determine.

The plan of liquidation provides that our Board may at any time transfer our
assets and liabilities to a liquidating trust which would then have
responsibility for disposing assets, settling and paying liabilities and making
distributions to shareholders. Such a transfer would be pursuant to a
liquidating trust agreement with a trustee or trustees on such terms and
conditions as may be approved by our Board. Our Board would appoint the trustee
or trustees, which could be an officer or director of the Company. Shareholder
approval of the dissolution and the plan of liquidation will also constitute
shareholder approval of any of the Board's trustee appointments and of any
liquidating trust agreement. In the event of a transfer of assets to a
liquidating trust, we would distribute, pro rata to our shareholders, beneficial
interests in the trust. Although the

recipients of such interests would be treated for United States federal tax
purposes as having received their pro rata share of property transferred to the
liquidating trust and having contributed such property to the liquidating trust
and will thereafter take into account for United States federal tax purposes
their allocable portion of any income, gain or loss realized by the trust, the
recipients of interests will not receive the value thereof unless and until the
trust distributes cash or other assets to them.

Costs during the period after our shareholders' approval of the dissolution and
the plan of liquidation will include wind down costs of our business and
operations and related operating costs and administrative costs, including
legal, accounting, financial, tax and other professional advisory fees incurred
during the wind-up phase. The plan of liquidation authorizes our Board, in its
discretion, to pay compensation to officers, directors, employees, agents and
representatives, including legal, accounting, financial, tax and other
professional advisors, in connection with carrying out the plan of liquidation.
If the Board determines, particularly in light of the familiarity and experience
with the Company of our current officers, to continue the employment of or
otherwise retain one or more of such officers in connection with carrying out
the plan of liquidation, such person(s) would receive compensation which our
Board determines is appropriate in light of their ongoing duties. Shareholder
approval of our dissolution and the plan of liquidation will also constitute
shareholder approval of any decision by our Board to continue to employ or
otherwise retain one or more of our officers to carry out the plan of
liquidation. The person(s) or entities who or which are retained to carry out
the wind-up of the Company's affairs and otherwise implement and execute the
plan of liquidation will be responsible for performing their duties in a manner
intended to result in the maximum amount of cash distributions being made to our
shareholders as soon as reasonably practicable, consistent with the discharge of
or adequate provision for our then existing liabilities and any contingent
liabilities, now known or later identified.

We will continue to indemnify our officers, directors and employees in
accordance with our certificate of incorporation and any contractual
arrangements that currently exist with respect to acts or omissions of such
persons in connection with the approval, implementation and execution of the
plan of liquidation and have purchased and will maintain director and officer
liability insurance policies and/or "tail" insurance policies for the benefit of
our current, former and future directors and officers.

Under New Jersey law, in the event we fail to create an adequate contingency
reserve for payment of our expenses and liabilities, or should such contingency
reserve and the assets held by the liquidating trust be exceeded by the amount
ultimately found payable in respect of expenses and liabilities, each
shareholder could be held liable for the payment to creditors of such
shareholder's pro rata share of such excess, limited to the amounts theretofore
received by such shareholder from us or from the liquidating trust in connection
with the liquidation. Under New Jersey law, creditors are barred from suing a
shareholder on any claim or enforcing a claim against a shareholder, unless that
claim was filed against the shareholder within 5 years after the corporation was
dissolved.

Liquidation Analysis and Estimates

The Company has estimated, as of September 27, 2008, the following range of
estimated values for our assets, estimated liabilities and estimated costs up to
and during the wind down of operations and liquidation. These ranges of value
represent our estimate of amounts to be realized during the liquidation, but do
not represent the minimum or maximum possible amounts that could be realized.
There can be no assurance, however, that we will incur costs or be able to
settle our liabilities or dispose of our assets within the indicated ranges, or
at all. We have sought independent appraisals for certain, but not all, of our
assets and liabilities.

Range of Estimated Values
-------------------------
Low High
--- ----
(in thousands, except per share amounts)

(i) Estimated Assets
Estimated assets $68,909 $68,909
Decrease in the carrying value of the assets at end of
liquidation period compared to the estimated fair value (562) (562)
------- -------
Total estimated assets (a) $68,347 $68,347
------- -------
(ii) Estimated Liabilities
Estimated liabilities $32,954 $32,954
Increase (decrease) in the carrying value of the
liabilities at end of liquidation period compared to
the estimated fair value 374 (3,411)
Contingency reserves and off balance sheet commitments (b) 4,201 1,678
------- -------
Total estimated liabilities $37,529 $31,221
------- -------
(iii) Estimated Operating Costs during and after wind down
of operation
Net loss during wind down period (c) $ 4,998 $ 2,125
Employee severance costs (d) 6,372 6,372
Professional, legal, tax, accounting and consulting fees
incurred in connection with dissolution and liquidation 205 155
------- -------
Net loss during liquidation period $11,575 $ 8,652
------- -------
(iv) Estimated Net Proceeds Available for Distribution
to Shareholders $19,243 $28,474
======= =======
(v) Estimated Net Proceeds Available for Distribution per
Outstanding Common Share (e) $ 3.25 $ 4.81
======= =======

----------
Notes:

(a) Includes cash, cash equivalents and long-term investments, estimated
proceeds from the collection of accounts receivables, sale of inventory,
return of security deposits and the sale and disposition of long-lived
assets. Assumes (i) all finished goods will be sold at or above cost and a
decrease in carrying value of approximately $297,000 of residual raw

material inventory; (ii) accounts receivable realization between 90% and
98%; (iii) auction rate securities realization of approximately 77% of par
value; and (iv) net proceeds after taxes of $4 million to $5 million from
the sale of the PRC land and buildings. However, the company currently has
the ability and intent to hold its auction rate securities until a
recovery of par value.

(b) Includes payments related to certain contract terminations, reserves for
wind down costs, reserve for deductible amount payable under insurance
policy, reserve for a certain performance bond obligation and payment to
our Chairman and CEO triggered by the shareholders' approval of our
dissolution and plan of liquidation. Does not include certain contingent
liabilities and claims, such as liabilities relating to our existing
lawsuits and claims that have not been resolved, and lawsuits and claims
that could be brought against us in the future. Therefore, if any payments
are made in respect of such contingent liabilities or claims, the
estimated range of distributions to shareholders will be negatively
impacted and less than estimated.

(c) Includes payroll related costs, overhead, and operating costs such as
rent, insurance and professional fees, taxes and other operating costs.

(d) Includes: (i) $1,073,000 to our Chairman and CEO pursuant to severance
benefit provision of his May 1, 1997 employment agreement, as thereafter
amended, the term of which currently expires on June 30, 2009; (ii)
$779,000 to our other executive officers pursuant to the severance benefit
provisions of their respective employment agreements; (iii) $3,784,000 to
our non-executive employees in the PRC and Hong Kong pursuant to
applicable laws or the severance benefit provisions of their respective
employment agreements; and (iv) $736,000 to our non-executive employees in
the United States and Europe pursuant to the severance benefit provisions
of their respective employment agreements.

(e) Based upon 5,913,610 shares of common stock outstanding and 1,300 vested
stock options with an exercise price of under $4.82 per share outstanding
as of September 27, 2008. Under our stock option plans, upon our
dissolution, all then-outstanding options will, to the extent vested and
not exercised, terminate in exchange for the right to receive a pro rata
portion of our distributions to shareholders (less the option exercise
price and any tax withholding amounts) as if the option had been exercised
prior to dissolution. We will deduct from payments to option holders the
aggregate exercise price of the options (estimated to be approximately
$4,600 in the aggregate with respect to options with an exercise price of
under $4.82 per share), meaning that an option holder will not receive any
distributions unless and until the aggregate amount of the per share
distributions exceeds the per share exercise price of the option.

The method we used in estimating the values and value ranges of our assets other
than cash and cash equivalents is inexact and may not approximate values
actually realized. In addition, our estimates of our liabilities and operating
costs are subject to numerous uncertainties beyond our control and also do not
reflect any unknown liabilities or contingent liabilities that may materialize.
For these reasons, the actual net proceeds distributed to shareholders in
liquidation could be significantly less than the estimated amounts shown.

Since the terms of any disposition of assets pursuant to the plan of liquidation
have not been determined and all liabilities and potential costs of liquidation
have not been identified or finally resolved, we have concluded that pro forma
financial information concerning the plan of liquidation cannot be presented in
any meaningful fashion. The following table sets forth a reconciliation of
relevant portions of the estimates set forth above under "Liquidation Analysis
and Estimates" with the Company's shareholders equity, as set forth in its
unaudited balance sheet as of September 27, 2008.

Range of Aggregate Values
(000's)
----------------------------
Low High
-------- --------

Total shareholders' equity as of September 27, 2008 $ 35,955 $ 35,955

Net (decrease) increase in carrying value of assets and liabilities
as of September 27, 2008 compared to the estimated fair value at
end of liquidation period (936) 2,849

Estimated net loss during liquidation period (11,575) (8,652)

Estimated off balance sheet obligations and contingent liabilities (4,201) (1,678)
-------- --------
Estimated net proceeds available for distribution to shareholders $ 19,243 $ 28,474
======== ========

Interests of Certain Officers and Directors in the Dissolution and the Plan of
Liquidation

In considering our Board's recommendation to approve the dissolution and the
plan of liquidation, you should be aware that our officers and directors have
interests that may be different from or in addition to your interests as a
shareholder.

As of October 27, 2008, our executive officers and directors held or
represented, directly or indirectly, an aggregate of 1,908,983 shares of common
stock (approximately 32.3% of the outstanding shares of common stock as of the
record date) and no options to purchase shares of common stock with an exercise
price less than the high end of our anticipated liquidation proceeds range.

There will be no accelerated vesting of options as a result of approval by
shareholders, and implementation, of our dissolution and the plan of
liquidation.

The table below sets forth information concerning stock options held by each of
our executive officers and directors, as of October 27, 2008.

-------------------------------------------------------------------------------------------------------
Total "In-The-Money" Options
-------------------------------------------------------------------------------------------------------
Total Outstanding
Name, Title Options Exercise Price Shares Value
-------------------------------------------------------------------------------------------------------

Ira B. Lampert
Chairman, Chief Executive
Officer and Director 52,600 $29.85 -- --
-------------------------------------------------------------------------------------------------------
Ronald S. Cooper -- -- -- --
Director
-------------------------------------------------------------------------------------------------------
Morris H. Gindi -- -- -- --
Director
-------------------------------------------------------------------------------------------------------
William J. O'Neill, Jr. -- -- -- --
Director
-------------------------------------------------------------------------------------------------------
Roger J. Beit -- -- -- --
Director
-------------------------------------------------------------------------------------------------------
Blaine A. Robinson
Vice President - Finance,
Treasurer and Assistant 3,000 $27.75
Secretary 1,000 $8.80 -- --
-------------------------------------------------------------------------------------------------------
Urs W. Stampfli
Senior Vice President and
Director of Global Sales
& Marketing 3,733 $29.85 -- --
-------------------------------------------------------------------------------------------------------
Scott L. Lampert 900 $29.85
Vice President, General 600 $27.50
Counsel and Secretary 1,800 $13.83
400 $5.70 -- --
-------------------------------------------------------------------------------------------------------

Certain of our current executive officers and directors are parties to
agreements with the Company providing for severance or other benefits upon
termination of employment, including as a result of our liquidation and
dissolution. Below is information concerning such officers and directors and
their agreements with us.

Ira B. Lampert, Chairman, Chief Executive Officer and President. Mr. Lampert's
employment agreement provides that if we terminate Mr. Lampert's employment with
us without cause or if there is a constructive termination without cause, Mr.
Lampert would be entitled to receive his accrued compensation (including,
without limitation, any earned but unpaid bonus or long-term incentive awards,
any amount of base salary accrued or earned but unpaid, any deferred
compensation earned but unpaid, any accrued but unused vacation pay and
unreimbursed business expenses (the "Accrued Amounts"), his base salary and
continuation of his benefits (or the economic equivalent of such benefits),
additional life and disability insurance and certain perquisites for the
scheduled balance of the term of his employment agreement, which expires on June
30, 2009, and for an additional 12 months thereafter, and a prorated bonus for
the year in which the termination occurred (based upon the target bonus
opportunity, if any, for that year).

current annual base salary, (B) his bonus opportunity for which he is eligible,
or (C) his opportunity for any long-term incentive award for which he is
eligible under his employment agreement or the termination or material reduction
of any employee benefit or perquisite he enjoys; (ii) the failure to elect or
reelect Mr. Lampert to any of the positions described in the employment
agreement or his removal, without cause, from any such position; (iii) a
material diminution in Mr. Lampert's duties as our Chairman and CEO or the
assignment to Mr. Lampert of duties which are materially inconsistent with such
duties or which materially impair Mr. Lampert's ability to function as our
Chairman and CEO; (iv) the failure to continue Mr. Lampert's participation in
any incentive compensation plan for which he is eligible unless a plan providing
a substantially similar opportunity is substituted; (v) the relocation of our
principal office, or Mr. Lampert's own office location as assigned to him by us,
to a location more than 50 miles from Hollywood, Florida; or (vi) our failure to
obtain the assumption in writing of our obligation to perform the employment
agreement by any successor to all or substantially all of our assets within 45
days after the merger, consolidation, sale or similar transaction resulting in
such succession, provided that Mr. Lampert may not treat such failure as a
constructive termination without cause unless such failure is not cured within
10 days after receipt of notice thereof by such successor from Mr. Lampert.

If Mr. Lampert voluntarily resigns, he will only receive the Accrued Amounts and
benefits provided in benefit plans.

Under the terms of Mr. Lampert's employment agreement, a "change in control"
includes the approval by the Company of any plan of liquidation providing for
the distribution of all or substantially all of our assets. If a termination
without cause or constructive termination without cause followed a change in
control of the Company, Mr. Lampert would be entitled to receive the salary
continuation and benefits and the additional 12 months salary and benefits
identified above as a lump-sum payment without any discount. In addition,
subject to limited exceptions, any benefits, including options, in which he is
not at such time fully vested would become fully vested and any options would
remain exercisable for the full stated term of the option, except in the case of
our dissolution in which event options fully vested prior to dissolution will
terminate upon dissolution and, as to those terminated options, Mr. Lampert will
be entitled to receive his pro rata share of any liquidating distributions to
Company shareholders (less the option exercise price and taxes withheld, if any)
as if he had exercised the options immediately prior to our dissolution. If the
severance payments to Mr. Lampert under his employment agreement follow a change
in control and, together with other amounts paid to Mr. Lampert, exceed certain
threshold amounts and are determined to constitute a parachute payment (as
defined in Section 280G(b)(2) of the Internal Revenue Code), Mr. Lampert is to
receive an additional amount to cover the federal excise tax with respect
thereto on a "grossed up" basis.

If Mr. Lampert is terminated without cause by us as of January 1, 2009 following
the approval of our dissolution and the plan of liquidation by the shareholders
of the Company (a change of control under his agreement), he will receive
payments of $2,168,000, which includes the initial $500,000 change of control
payment.

Blaine A. Robinson, Vice President - Finance, Treasurer and Assistant Secretary.
Mr. Robinson's employment agreement, as amended to date, can be terminated by
him or by us for any reason or no reason upon providing 30 days written notice
to the other party. The agreement provides that if the termination by us for any
reason other than cause or no reason is effective before such notice period
expires, we are required to pay Mr. Robinson his base salary and car allowance
for the remainder of the notice period. Additionally, if we terminate Mr.
Robinson for any reason other than cause or for no reason, Mr. Robinson is
entitled to receive (i) up to 12 months' base salary and car allowance, with the
combination of notice and severance payments not to exceed 12 months' base
salary and car allowance, and (ii) reimbursement of premiums paid by Mr.
Robinson for medical, dental and vision insurance coverages during the 12 month
post-employment period. If Mr. Robinson is terminated without cause by us
following the approval of our dissolution and the plan of liquidation by the
shareholders of the Company without 30 days' written notice by the Company, he
will receive severance and insurance payments of $244,000.

Urs W. Stampfli, Senior Vice President and Director of Global Sales & Marketing.
Under the terms of Mr. Stampfli's employment agreement, if we terminate his
employment at any time without cause, or if Mr. Stampfli terminates his
employment during or after the stated term of his employment agreement
(currently to expire on January 1, 2009), he is entitled to (i) severance
payments equal to 12 months consisting of his then base salary and car allowance
and (ii) reimbursement of premiums paid by Mr. Stampfli for medical, dental and
vision insurance coverages during the 12 month post-employment period. If Mr.
Stampfli is terminated without cause by us following the approval of our
dissolution and the plan of liquidation by the shareholders of the Company, he
will receive severance and insurance payments of $296,000.

Scott Lampert, Vice President, General Counsel and Secretary. Mr. Lampert's
employment agreement, as amended to date, can be terminated by him or by us for
any reason or no reason upon providing 30 days written notice to the other
party. The agreement provides that if the termination by us for any reason other
than cause or no reason is effective before such notice period expires, we are
required to pay Mr. Lampert his base salary and car allowance for the remainder
of the notice period. Additionally, if we terminate Mr. Lampert for any reason
other than cause or for no reason, Mr. Lampert is entitled to receive (i) up to
12 months' base salary and car allowance, with the combination of notice and
severance payments not to exceed 12 months' base salary and car allowance, and
(ii) reimbursement of premiums paid by Mr. Lampert for medical, dental and
vision insurance coverages during the 12 month post-employment period. If Mr.
Lampert is terminated without cause by us following the approval of our
dissolution and the plan of liquidation by the shareholders of the Company
without 30 days' written notice by the Company, he will receive severance and
insurance payments of $238,000.

While no determination has yet been made by our Board regarding the continuation
of or retention of one or more employees, or the retention of other persons or
entities, to carry out the wind-up of our affairs and otherwise implement and
execute the plan of liquidation, the plan of

liquidation authorizes our Board, in its discretion, to pay compensation to
officers, directors, employees, agents and representatives in connection with
carrying out the plan of liquidation. If the Board determines, particularly in
light of the familiarity and experience with the Company of our current
officers, to continue the employment of or otherwise retain one or more of such
officers in connection with carrying out the plan of liquidation, such person(s)
would receive compensation which the Board determines is appropriate in light of
their ongoing duties.

In connection with the plan of liquidation, we intend to continue to indemnify
our directors and officers and have purchased and will maintain a director and
officer liability insurance policy and/or "tail" insurance policy for the
benefit of our current, former and future directors and officers.

Regulatory Approvals

Except for the requirements of New Jersey law and the Exchange Act, no other
federal or state regulatory requirements must be complied with or approvals
obtained in connection with the dissolution and liquidation of the Company in
accordance with the plan of liquidation. As to foreign jurisdictions, there are
certain regulatory approvals required in connection with the dissolution and
liquidation of the Company's foreign subsidiaries; the Company intends to obtain
such required regulatory approvals.

Dissenting Shareholders' Rights

Under New Jersey law, our shareholders are not entitled to appraisal rights for
their shares of common stock with respect to the dissolution and plan of
liquidation.

Certain Federal Income Tax Consequences

The following discussion is a general summary of certain United States federal
income tax consequences to our shareholders that are anticipated to result from
our liquidation and dissolution. This discussion does not purport to be a
complete analysis of all the potential tax effects. Moreover, the discussion
does not address the tax consequences that may be relevant to particular
categories of investors subject to special treatment under the federal income
tax laws (such as dealers in securities, banks, insurance companies, tax-exempt
organizations, mutual funds, foreign persons and persons who acquired their
stock upon the exercise of employee stock options or otherwise as compensation).
It also does not address any tax consequences arising under the laws of any
state, local or foreign jurisdiction. The discussion is based upon the Internal
Revenue Code of 1986, as amended, Treasury regulations, rulings of the Internal
Revenue Service, or IRS, and judicial decisions now in effect, all of which are
subject to change at any time, possibly with retroactive effect. Distributions
pursuant to the plan of liquidation may occur at various times and in more than
one tax year. No assurance can be given that the tax treatment described herein
will remain unchanged at the time of such distributions.

The following discussion has no binding effect on the IRS or the courts and
assumes that we will liquidate in accordance with the plan of liquidation in all
material respects. No ruling has been requested from the IRS with respect to the
anticipated tax treatment of the plan of liquidation, and we will not seek an
opinion of counsel with respect to such anticipated tax treatment.

As a result of our liquidation, as described in more detail below, for federal
income tax purposes, shareholders generally will recognize gain or loss equal to
the difference between (i) the sum of the amount of cash distributed to them and
the aggregate fair market value, at the time of distribution, of any property
distributed to them (including transfers of assets to a liquidating trust), and
(ii) their tax basis in their shares of our capital stock.

A shareholder's gain or loss will be computed on a "per share" basis. We may
make more than one liquidating distribution, each of which will be allocated
proportionately to each share of stock owned by a shareholder. The value of each
liquidating distribution will be applied against and reduce a shareholder's tax
basis in his or her shares of stock. Gain will be recognized as a result of a
liquidating distribution to the extent that the aggregate amount of cash and
value of that distribution and prior liquidating distributions received by a
shareholder with respect to a share exceeds his or her tax basis in that share.
Any loss generally may be recognized only when the final distribution from us
has been received and then only if the amount of cash and aggregate value of all
liquidating distributions with respect to a share is less than the shareholder's
tax basis in that share. Gain or loss recognized by a shareholder will be
capital gain or loss, provided the shares are held as capital assets, and will
be long-term capital gain or loss if the shareholder's holding period for the
shares exceeds one year. If it were to be determined that distributions made
pursuant to the plan of liquidation were not liquidating distributions, the
result could be treatment of distributions as dividends taxable at ordinary
income rates if we were to have any current or accumulated earnings and profits
for federal income tax purposes (which we do not expect to have).

Upon any distribution of property, the shareholder's tax basis in such property
immediately after the distribution will be its fair market value at the time of
distribution. The gain or loss realized upon the shareholder's future sale of
that property will be measured by the difference between the shareholder's tax
basis in the property at the time of such sale and the amount realized from such
sale.

After the close of each taxable year, we will provide shareholders and the IRS
with a statement of the amount of cash distributed to shareholders and, if
applicable, our best estimate as to the value of any property distributed to
them during that year. There is no assurance that the IRS will not challenge
that valuation. As a result of such a challenge, the amount of gain or loss
recognized by shareholders might be changed.

It is possible that we will have liabilities not fully covered by our
contingency reserve for which the shareholders will be liable up to the extent
of any liquidating distributions they have received. This liability could
require a shareholder to satisfy a portion of this liability out of prior
liquidating distributions received from us and a liquidating trust. Payments by
shareholders in satisfaction of these liabilities generally would produce a
capital loss, which, in the hands of individual shareholders, could not be
carried back to prior years to offset any capital gains recognized from
liquidating distributions in those years.

Consequences to Option holders

Terminated (Unexercised) Options. Holders of incentive stock options, or ISOs,
and non-statutory stock options who do not exercise the options prior to
termination of the options upon

our dissolution and who receive a pro rata portion of distributions to
shareholders in respect of their terminated unexercised options will be subject
to tax at ordinary income rates on the amounts received.

Non-Statutory Options. Holders of non-statutory options who exercise their
options prior to the termination of the options upon our dissolution will
recognize ordinary compensation income equal to the excess of the value of the
stock at the time of exercise over the exercise price. Any additional gain upon
liquidation will be short-term, if the stock is held for one year or less at the
time of liquidation. Ordinary income and short-term capital gain are subject to
tax at a current maximum rate of 35%.

Incentive Stock Options. Generally, holders of ISOs who exercise their options
prior to the termination of the options upon our dissolution are not subject to
regular income tax at the time of exercise. However, the difference, or spread,
between the fair market value of the stock received on the date of exercise and
the exercise price is included in the employee's alternative minimum taxable
income in the year of exercise. If the employee makes a sale or other
disposition, within two years after grant or within one year after exercise, of
stock received on the exercise of an ISO, the employee forfeits ISO tax
treatment and recognizes ordinary compensation income in the year of
disposition, generally equal to the spread on the date of exercise. Any
additional gain is capital gain, which will be short-term if the stock is held
for one year or less at the time of liquidation. Ordinary income and short-term
capital gain are currently subject to tax at a maximum income tax rate of 35%.
Although an early disposition of stock generally does not avoid the inclusion of
the spread at exercise in alternative minimum taxable income, an early
disposition made in the year of exercise usually negates any alternative minimum
tax liability.

Accordingly, holders of ISOs who exercise their options within the two-year
period preceding the liquidation will be treated as having made a disqualifying
disposition and will recognize ordinary compensation income in the year of
liquidation equal to the spread on the date of exercise. It is anticipated that
the liquidation will, for this purpose, be deemed to occur within the year 2008
and accordingly holders of ISOs who exercise their options in 2008 will not
include the spread in the computation of the alternative minimum tax.

Liquidating Trust

If we transfer assets to a liquidating trust, a shareholder generally should be
treated for federal income tax purposes as having received a pro rata share of
the property transferred to the liquidating trust, reduced by the amount of
known liabilities assumed by the liquidating trust or to which the property
transferred is subject, and having contributed such assets and liabilities to
the liquidating trust. Our transfer of assets to a liquidating trust will cause
a shareholder to be treated in the same manner for federal income tax purposes
as if the shareholder had received a distribution directly from us. The
liquidating trust should not be subject to federal income tax, assuming that it
is treated as a liquidating trust for federal income tax purposes. After
formation of the liquidating trust, a shareholder must take into account for
federal income tax purposes the shareholder's allocable portion of any income,
gain or loss recognized by the liquidating trust. As a result of our transfer of
assets to the liquidating trust and the ongoing operations of the liquidating
trust, shareholders may be subject to tax, whether or not they have received any

actual distributions from the liquidating trust with which to pay such tax.
There can be no assurance that the liquidating trust described in the plan of
liquidation will be treated as a liquidating trust for federal income tax
purposes.

Taxation of Non-United States Shareholders

Foreign corporations or persons who are not citizens or residents of the United
States should consult their tax advisors with respect to the U.S. and non-U.S.
tax consequences of the plan of liquidation.

State and Local Tax

Shareholders may also be subject to state or local taxes and should consult
their tax advisors with respect to the state and local tax consequences of the
plan of liquidation.

The foregoing summary of United States federal income tax consequences is
included for general information only and does not constitute legal advice to
any shareholder. The tax consequences of the plan of liquidation may vary
depending upon the particular circumstances of each shareholder. Each
shareholder should consult his or her own tax advisor regarding the federal
income tax consequences of the plan of liquidation as well as any state, local,
and foreign tax consequences.

Vote Required and Board Recommendations

Approval of our dissolution and the plan of liquidation requires the affirmative
vote of a majority of the votes cast at a meeting duly called at which a quorum
is present. Members of our current Board and our executive officers who held as
of November 7, 2008, the record date for determining shareholders entitled to
notice of and to vote at the Annual Meeting, an aggregate of 1,908,983 shares of
common stock (approximately 32.3% of the outstanding shares of common stock as
of October 27, 2008) have indicated that they will vote all of their shares in
favor of the proposal.

Our Board of Directors believes that the dissolution of the Company and the plan
of liquidation are in the best interests of our shareholders and recommends a
vote for this proposal. It is intended that shares represented by the enclosed
form of proxy will be voted IN FAVOR of this proposal unless otherwise specified
in such proxy.

SELECTED FINANCIAL DATA

On October 29, 2008, our Board voted to adopt a plan of dissolution and
liquidation subject to shareholder approval. The information presented herein
does not include any adjustments necessary to reflect the possible future
effects on the recoverability of the assets or settlement of liabilities that
may result from adoption of the plan of dissolution and liquidation or our
potential inability to complete such a plan in an orderly manner.

You should read the selected financial data set forth below along with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and the related notes in
our Annual Report on Form 10-K for the year ended June 28, 2008.

(Unaudited)
For the
Quarter
Ended
($ in thousands except per July 3, July 2, July 1, June 30, June 28, Sept. 27,
share data) 2004 2005 2006 2007 2008 2008
--------- --------- --------- --------- --------- ---------

STATEMENTS OF OPERATIONS DATA:
Net sales ............................. $ 203,132 $ 174,348 $ 137,529 $ 86,653 $ 74,149 $ 17,669
Cost of products sold ................. 188,954 180,130 122,928 77,452 66,613 13,733
--------- --------- --------- --------- --------- ---------
Gross profit (deficit) ................ 14,178 (5,782) 14,601 9,201 7,536 3,936
Operating expenses .................... 43,426(b) 39,794 34,873 22,584 22,006(a) 3,103
--------- --------- --------- --------- --------- ---------
Operating (loss) income ............... (29,248) (45,576) (20,272) (13,383) (14,470) 833
Interest expense ...................... 715 931 374 336 501 187
Other income, net ..................... (500) (1,770) (1,142) (1,999) (1,566) (1,406)
--------- --------- --------- --------- --------- ---------
(Loss) income before income taxes
and extraordinary gain ............ (29,463) (44,737) (19,504) (11,720) (13,405) 2,052
Provision (benefit) for taxes ......... 7,537 186 107 6 (798) 4
--------- --------- --------- --------- --------- ---------
(Loss) income before extraordinary
gain .............................. (37,000) (44,923) (19,611) (11,726) (12,607) 2,048
Extraordinary gain .................... 5,778(c) -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net (loss) income ..................... $ (31,222) $ (44,923) $ (19,611) $ (11,726) $ (12,607) $ 2,048
========= ========= ========= ========= ========= =========

Net (loss) income per common share:
Basic and diluted:
(Loss) income before extraordinary
gain .............................. $ (6.45)(d) $ (7.70)(d) $ (3.36)(d) $ (1.99)(d) $ (2.13) $ 0.35
Extraordinary gain .................... 1.00(d) -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Basic and diluted (loss) income per
common share ...................... $ (5.45) $ (7.70) $ (3.36) $ (1.99) $ (2.13) $ 0.35
========= ========= ========= ========= ========= =========

BALANCE SHEET DATA:
Working capital ....................... $ 100,603 $ 61,761 $ 46,843 $ 39,019 $ 16,931 $ 19,553
========= ========= ========= ========= ========= =========
Total assets .......................... $ 189,517 $ 146,756 $ 104,742 $ 82,504 $ 70,602 $ 68,909
========= ========= ========= ========= ========= =========
Total debt ............................ $ 9,170 $ 2,936 $ -- $ 2,756 $ 17,621 $ 14,032
========= ========= ========= ========= ========= =========
Total stockholders' equity ............ $ 127,125 $ 82,303 $ 62,967 $ 51,644 $ 33,902 $ 35,955
========= ========= ========= ========= ========= =========

----------
(a) Includes $5.9 million of asset impairment charges.

(b) Includes $0.7 million of variable stock-based compensation expense.

(c) Represents the excess of estimated fair value of net assets acquired over
cost (negative goodwill) for the Jenimage acquisition.

(d) On October 26, 2006, our Board of Directors approved, without action by
the shareholders, a Certificate of Amendment to our Certificate of
Amendment to implement a one-for-five split of our common stock with an
effective date of November 21, 2006. All issued shares of our common stock
(including treasury shares and shares held in trust) and per-share and
related stock option amounts have been retroactively adjusted for the
reverse stock split in the accompanying selected financial data.

PROPOSAL TWO:

ELECTION OF DIRECTORS

Nominees for Election of Directors

Pursuant to Article III of our By-Laws, as amended, the Board has fixed the
number of directors constituting the entire Board at five. All five directors
are to be elected at the Annual Meeting, each to hold office until the 2009
Annual Meeting of Shareholders and until his successor is duly elected and
qualified. In voting for directors, each shareholder is entitled to cast one
vote for each share of our common stock held of record, either in favor of or
against the election of each nominee, or to abstain from voting on any or all
nominees. Although management does not anticipate that any nominee will be
unable or unwilling to serve as director, in the event of such an occurrence,
proxies may be voted in the discretion of the persons named in the proxy for a
substitute designated by the Board, unless the Board decides to reduce the
number of directors constituting the Board. The election of directors requires
the affirmative vote of a plurality of the votes cast by the holders of shares
of our common stock present or represented and entitled to vote at the Annual
Meeting.

Our Board recommends a vote FOR Ira B. Lampert, Ronald S. Cooper, Morris H.
Gindi, William J. O'Neill, Jr. and Roger Beit to hold office until the 2009
Annual Meeting of Shareholders and until their successors are duly elected and
qualified. Proxies that do not withhold the authority to vote for the nominees
will be voted FOR each of the nominees.

The following sets forth information provided by the nominees, all of whom are
currently serving as directors of the Company and all of whom have consented to
serve if reelected by our shareholders.

Year First Elected/
Name of Nominee Age Nominated Director Positions and Offices with the Company
---------------------------- --- ------------------- --------------------------------------

Ira B. Lampert 63 1993 Chairman of the Board, Chief Executive
Officer and President
Ronald S. Cooper 70 2000 Director
Morris H. Gindi 64 1988 Director
William J. O'Neill, Jr. 66 2001 Director
Roger J. Beit 51 2008 Director

Ira B. Lampert has been a director of the Company since 1993 and the Chairman
and Chief Executive Officer of the Company since 1994. For the calendar year
1995 and again from 1998 through the present, Mr. Lampert also served as
President of the Company. Mr. Lampert is a member of the Queens College
Foundation Board of Trustees (Queens College is part of the City University
System of New York), a member of the Advisory Board of the Boys & Girls
Republic, a nonprofit organization for underprivileged children, and serves on
the Boards of Trustees of the Mount Sinai Medical Center Foundation, Inc. and
the Mount Sinai Medical Center of Florida, Inc.

Ronald S. Cooper has been a director of the Company since 2000. Mr. Cooper is a
co-founder and principal of LARC Strategic Concepts, LLC, a consulting firm
focusing on emerging growth companies. Mr. Cooper retired from Ernst & Young LLP
in September 1998, having joined the firm in 1962. He became a partner in 1973
and was Managing Partner of the firm's Long Island, New York office from 1985
until he retired.

Morris H. Gindi has been a director of the Company since 1988. Mr. Gindi has
served as the Chief Executive Officer of Notra Trading Inc., an import agent in
the home textiles industry, since 1983 and as Chief Executive Officer of Morgan
Home Fashions, a manufacturer and distributor of home textiles, since 1995.
These two businesses import and distribute merchandise to all levels of the
retail trade. Mr. Gindi's career in the home textiles industry has spanned four
decades.

William J. O'Neill, Jr. has been a director of the Company since 2001. Mr.
O'Neill has served as Dean of the Business School at Suffolk University in
Boston, Massachusetts since 2001. From 1969 to 1999, he held various management
positions at Polaroid Corporation, most recently as Executive Vice President and
President, Corporate Business Development. In addition, Mr. O'Neill is a
director of AdvanSource Biomaterials Corporation (AMEX:ASB), a manufacturer of
cardiovascular devices, EDGAR Online, Inc. (NASDAQ:EDGR), a provider of business
and financial information on global companies, the Design Management Institute
and the Greater Boston Chamber of Commerce.

Roger J. Beit has been a director of the Company since 2008. Mr. Beit is an
executive of Harvest Investments, LLC, an owner of multi-family residential
properties. Mr. Beit was previously a manager of Coopers and Lybrand's Hartford,
Connecticut office. In addition, Mr. Beit was recommended as a director to the
Director Affairs Committee by the MT Trading LLC, Sondra Beit, RH Trading LLC
and LTC Racing LLC group, which is the beneficial owner of approximately 23.2%
of the Company's Common Stock. Mr. Beit, the husband of Sondra Beit, is the
authorized spokesperson and representative and has investment authority over the
investment account in which such shares are held.

Corporate Governance

Our common stock is listed on the NASDAQ Global Market ("NASDAQ"). Although not
required by NASDAQ's corporate governance rules, our Board adopted Corporate
Governance Guidelines that address governance issues and set forth our
governance principles including director qualification, Board structure,
director compensation, management succession and periodic performance evaluation
of the Board and its committees. Our Corporate Governance Guidelines are
available on our website: www.concord-camera.com under About Concord--Investor
Relations--Corporate Governance Guidelines. We have also adopted a code of
ethics that applies to our principal executive officer, principal financial
officer, principal accounting officer and controller, as well as all other
employees and our directors. The code of ethics, which we call our Code of
Conduct, is available on our website: www.concord-camera.com under About
Concord--Investor Relations--Code of Conduct. If we make any substantive
amendments to, or grant a waiver (including an implicit waiver) from, a
provision of our Code of Conduct that applies to our principal executive
officer, principal financial officer, principal

accounting officer or controller, and that relates to any element of the code of
ethics definition enumerated in Item 406(b) of Regulation S-K, promulgated under
the Exchange Act, we will disclose such amendment or waiver on our website and
in a Current Report on Form 8-K filed with the Commission.

Independence of Board Members and Audit Committee Financial Experts

Pursuant to NASDAQ's listing standards, a majority of our Board must be
comprised of "independent" directors as defined in Rule 4200 of NASDAQ's listing
standards. The Board has reviewed the independence standard set forth in Rule
4200 and has determined that each of our directors other than Mr. Lampert is
independent under Rule 4200.

The Board has determined that we have at least one "audit committee financial
expert" serving on our Audit Committee, as defined under applicable federal
securities laws and regulations, who has the "financial sophistication" required
under the listing standards of the NASDAQ Global Market. Both Messrs. Cooper and
O'Neill satisfy the criteria for these standards. Mr. Cooper has over 35 years
of experience in the field of public accounting, retiring in 1998 from Ernst &
Young LLP. Mr. O'Neill was Chief Financial Officer (and Executive Vice
President) of Polaroid from 1990 to 1998, having held various other positions
with Polaroid including that of Corporate Controller for four years. All of the
members of the Audit Committee are "independent," as defined under, and required
by, the federal securities laws and the rules promulgated by the Commission,
including Rule 10A-3(b)(i) under the Exchange Act, as well as the listing
standards of the NASDAQ Global Market.

Meetings and Committees of the Board of Directors

Our Board met 8 times during Fiscal 2008. Our independent directors generally
meet in executive session without management present as part of each regularly
scheduled meeting of the Board. In addition, the independent directors also meet
separately from Board meetings from time to time in their discretion. In Fiscal
2008, all directors attended 75% or more of the Board meetings and meetings of
the committees on which they served.

Directors are expected to attend our annual meetings of shareholders pursuant to
our Corporate Governance Guidelines. Because the Board holds one of its regular
meetings in conjunction with our annual meetings of shareholders, unless one or
more members of the Board are unable to attend, all of the members of the Board
are present for the annual meeting. All four of our directors in 2007 attended
the 2007 annual meeting in person.

Our Board has an Audit Committee, a Compensation and Stock Option Committee, an
Executive Committee, a Director Affairs Committee and a Marketing and Product
Development Committee. The members of each committee are appointed annually by
the Board.

As of August 14, 2006, the Board established a Special Committee, comprised of
our then three independent directors, Messrs. O'Neill (Chairman), Cooper and
Gindi, to investigate, evaluate and analyze strategic alternatives. The Special
Committee met 16 times during Fiscal 2008.

Our Audit Committee, which is a separately designated, standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act has the
following members: Messrs. Cooper (Chairman), Gindi and O'Neill, each of whom is
independent as defined in listing standards applicable to us. The Audit
Committee assists our Board in its oversight of the quality and integrity of our
accounting, auditing and financial reporting practices. The Audit Committee's
role includes discussing with management our processes to manage financial risk
and for compliance with significant applicable legal, ethical and regulatory
requirements. The Audit Committee is directly responsible for the appointment,
compensation, retention and oversight of the independent registered public
accounting firm engaged to prepare or issue audit reports on our financial
statements or to perform other audit, review or attestation services for us. The
Audit Committee relies on the expertise and knowledge of management and the
independent registered public accounting firm in carrying out its oversight
responsibilities. The specific responsibilities in carrying out the Audit
Committee's oversight role are delineated in the Audit Committee Charter, a copy
of which was included as Appendix A to our 2007 proxy statement filed with the
Commission on October 29, 2007. See the Audit Committee Report below. The Audit
Committee met 4 times during Fiscal 2008.

Our Compensation and Stock Option Committee consists of Messrs. O'Neill, Jr.
(Chairman) and Cooper, each of whom is independent as defined in the applicable
listing standards. The Compensation and Stock Option Committee assists our Board
in the discharge of its responsibilities relating to compensation of our
directors and executive officers. Its specific areas of oversight include:

o Compensation of our Chief Executive Officer ("CEO"), our other
executive officers and any other Company officer, employee or agent
having a familial relationship with the CEO;

o Establishment of annual and long-term performance goals for our
executive officers in light of approved performance goals;

o Compensation of our directors;

o Management development and succession; and

o Administration of equity plans and other officer and director
compensation arrangements.

The Compensation and Stock Option Committee has the authority to employ a
compensation consultant to assist in its evaluation of executive officer
compensation. Our CEO has historically played a significant role in the
determination of compensation. We expect that the Compensation and Stock Option
Committee will continue to solicit input from our CEO with respect to
compensation decisions affecting other members of our senior management. A copy
of the Compensation and Stock Option Committee Charter was attached as Appendix
B to our 2007 proxy statement filed with the Commission on October 29, 2007.
During Fiscal 2008, the Compensation and Stock Option Committee had no meetings
and acted 3 times by unanimous written consent in lieu of a meeting.

Our Director Affairs Committee, consisting of Messrs. Lampert (Chairman) and
O'Neill, recommends to the independent directors of the Board those persons who,
in the opinion of the members of the Director Affairs Committee, should be
invited to stand for election to the Board as management nominees at any and all
ensuing meetings of our shareholders. The Director Affairs Committee also
evaluates new candidates and current directors, and reviews, evaluates and
recommends changes to our corporate governance practices. The Director Affairs
Committee met 1 time during Fiscal 2008.

Pursuant to NASDAQ's listing standards, director nominees must be selected, or
recommended for the Board's selection, either by: (i) a majority of the
independent directors or (ii) a nominations committee comprised solely of
independent directors. We do not have a standing nominating committee. The
Director Affairs Committee recommends but does not nominate nominees for
election to our Board. Nominees are selected by a majority of the independent
directors on the Board, all of whom are "independent" as independence for
nominating committee members is defined in the applicable NASDAQ listing
standards. Because a majority of the independent directors select our director
nominees with input and advice from the Director Affairs Committee, we believe
it is not necessary to have a separately designated nominating committee. In
accordance with NASDAQ's listing requirements, the Board has adopted resolutions
addressing the nominations process. The nominations process resolutions are
available on our website at www.concord-camera.com under About Concord--Investor
Relations--Corporate Governance Guidelines.

Director Nominations Process

The Director Affairs Committee may use multiple sources to identify director
candidates, including its own contacts and referrals from other directors,
management, the Company's advisers and director search firms. In addition, the
Director Affairs Committee will consider candidates that shareholders recommend.
Shareholder suggestions of one or more nominees for election to the Board may be
sent in writing to the Director Affairs Committee, Attention: Chairman, c/o
Concord Camera Corp., Presidential Circle - 6th Floor, North Tower, 4000
Hollywood Boulevard, Hollywood, Florida 33021. The Director Affairs Committee
evaluates candidates that shareholders recommend in the same manner and using
the same criteria it uses to evaluate candidates recommended by other sources.

The Director Affairs Committee has determined that all candidates for our Board
shall, at a minimum, possess high personal and professional ethical standards,
integrity and values; an inquiring mind, intelligence, practical wisdom and
informed judgment; the ability to work effectively and collegially with other
directors; a willingness and ability to devote the required amount of time to
carrying out the duties and responsibilities of Board and committee membership;
and a commitment to representing the long-term interests of our shareholders. In
addition, the Director Affairs Committee also considers certain other qualities
and skills in accordance with criteria established by the Director Affairs
Committee from time to time, including without limitation the candidate's
independence and financial literacy, and the extent to which the candidate
possesses pertinent policy-making, business and professional experience in
government, business, finance, technology, marketing, sales, manufacturing,
worldwide diverse operations and cultures, and other areas related to our
business activities.

The Director Affairs Committee reviews each recommendation for director
candidates (including shareholder recommendations) and makes an initial
determination as to whether the candidate has the ability to meet the minimum
criteria, which the Director Affairs Committee may modify from time to time. The
Director Affairs Committee may, in its discretion, confirm a candidate's
willingness to serve on the Board, verify a candidate's education, employment
records and references, conduct background investigations and arrange for
in-person meetings with the Director Affairs Committee or the full Board.
Following its determination as to the qualified candidates, the Director Affairs
Committee recommends to the independent directors of the Board those persons who
should be invited to stand for election. Pursuant to the Corporate Governance
Guidelines, in evaluating the suitability of individual candidates, the
independent directors take into account many factors, including a candidate's
understanding of marketing, finance and other disciplines relevant to the
success of a publicly-traded company in today's business environment; an
understanding of our business and industry on a technical level; and educational
and professional background. The independent directors evaluate each individual
in the context of the Board as a whole, with the objective of recommending a
group that can best perpetuate the success of the business and represent
shareholder interests through the exercise of sound judgment, using its
diversity of experience. Pursuant to our By-Laws, the nominees to stand for
election to the Board are then selected by a majority of the independent
directors on the Board. The independent directors are free to select nominees in
addition to, or instead of, those recommended by the Director Affairs Committee.

Communications with the Board

A shareholder may communicate directly with the Board by addressing a letter to
the Board of Directors of Concord Camera Corp. c/o Chairman, Presidential Circle
- North Tower, 4000 Hollywood Boulevard, Hollywood, Florida 33021. If a
shareholder would like the letter to be forwarded directly to one of the
Chairmen of the five standing committees of the Board, he or she should so
indicate. If no specific direction is indicated, the Chairman's office will
review the letter and forward it to the appropriate Board member(s).

Communications with the Audit Committee

The Audit Committee has established procedures for the receipt, retention and
treatment of complaints regarding accounting, internal accounting controls or
auditing matters and the confidential, anonymous submission by employees of
concerns regarding questionable accounting and auditing matters. These
procedures are described in our Code of Conduct which is available on our
website at www.concord-camera.com under About Concord--Investor Relations--Code
of Conduct.

Audit Committee Report

The members of the Audit Committee of the Board are Messrs. Cooper (Chairman),
Gindi and O'Neill. The primary purpose of the Audit Committee is to assist the
Board in its general oversight of the Company's accounting and financial
reporting processes. The Audit Committee's functions are more fully described in
its charter, which the Board has adopted. The Audit Committee reviews and
reassesses the adequacy of its charter on an annual basis. A copy

of its current charter is included as Appendix A to our 2007 proxy statement
filed with the Commission on October 29, 2007. The Board annually reviews the
NASDAQ listing standards' definition of independence for audit committee members
and has determined that each member of the Audit Committee is independent under
that standard.

Management is responsible for the preparation, presentation and integrity of the
Company's financial statements, accounting and financial reporting principles
and internal controls and procedures designed to ensure compliance with
accounting standards and applicable laws and regulations. The Company's
independent registered public accounting firm, BDO Seidman, LLP, is responsible
for performing an independent annual audit of the consolidated financial
statements and expressing an opinion on the conformity of those financial
statements with United States generally accepted accounting principles. The
Audit Committee's policy is that all services rendered by the Company's
independent auditor are either specifically approved or pre-approved and are
monitored both as to spending level and work content to maintain the appropriate
objectivity and independence of the independent auditor. The Audit Committee's
policy provides that the Audit Committee has the ultimate authority to approve
all audit engagement fees and terms and that the Audit Committee shall review,
evaluate and approve the engagement proposal of the independent auditor.

In conjunction with its activities during Fiscal 2008, the Audit Committee
reviewed and discussed our interim unaudited and annual audited financial
statements with the Company's independent registered public accounting firm with
and without management present, and with management. The members of the Audit
Committee discussed the agreed upon quarterly procedures and annual audit
procedures performed by the independent registered public accounting firm in
connection with the quarterly interim unaudited and annual audited financial
statements with management of the Company and its independent registered public
accounting firm. The members of the Audit Committee also discussed with the
Company's independent registered public accounting firm the matters required to
be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU
Section 380), as amended by Statement of Auditing Standards No. 90. In addition,
the Audit Committee received from the Company's independent registered public
accounting firm the written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board, and discussed its
independence with the independent registered public accounting firm. Based on
the foregoing reviews and discussions, the Audit Committee recommended to the
Board, and the Board approved, that the Fiscal 2008 annual audited financial
statements be included in the Company's Annual Report on Form 10-K for Fiscal
2008 for filing with the Commission.

Audit Committee

Ronald S. Cooper, Chairman
Morris H. Gindi
William J. O'Neill, Jr.

Certain Relationships and Related Party Transactions

Transactions with Related Persons

During Fiscal 2008, there were no, and there are no currently proposed,
transactions or series of similar transactions in which the amount involved
exceeded or will exceed $120,000 and in which any related person, including any
current director, executive officer, holder of more than 5% of our capital
stock, or entities affiliated with them, had a material interest.

Review, Approval or Ratification of Transactions with Related Parties

The Audit Committee Charter requires review and approval of any transactions or
courses of dealing with parties related to us.

Reverse Stock Split

On October 26, 2006, our Board approved, without action by the shareholders, a
Certificate of Amendment to our Certificate of Incorporation to implement a
one-for-five split of our common stock with an effective date of November 21,
2006. All shares of our common stock, including related stock option amounts and
applicable option exercise prices, have been adjusted in this proxy statement
for the reverse stock split.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and
holders of ten percent (10%) or more of our common stock, or Reporting Persons,
to file initial reports of ownership and reports of changes in ownership of our
common stock and any other equity securities with the Commission. Reporting
Persons are required to furnish us with copies of all Section 16(a) reports they
file. [Based on a review of the copies of the reports furnished to us and
written representations from our directors and executive officers that no other
reports were required, with respect to Fiscal 2008, we believe that the
Reporting Persons timely complied with all Section 16(a) filing requirements
applicable to them.

Executive Officers

Set forth below is the name and age, as of November 7, 2008, of each of our
executive officers, together with certain biographical information for each of
them (other than Ira B. Lampert, for whom biographical information is provided
above under "Nominees for Election of Directors"):

Name of Executive Officer Age Position and Offices with the Company
------------------------- ----- -----------------------------------------
Ira B. Lampert 63 Chairman, Chief Executive Officer and
President (principal executive officer)

Blaine A. Robinson 49 Vice President - Finance, Treasurer and
Assistant Secretary (principal
financial and accounting officer)

Urs W. Stampfli 57 Senior Vice President and Director of
Global Sales & Marketing

Scott L. Lampert 47 Vice President, General Counsel and
Secretary

Blaine A. Robinson, our Vice President - Finance, Treasurer and Assistant
Secretary since April 2006, joined us in February 2003 as our Corporate
Controller and has served as our Principal Accounting Officer since September
20, 2004 and, effective April 1, 2006, as our Principal Financial Officer. Prior
to joining us, from May 2002 to February 2003, Mr. Robinson was employed by
Spherion Corporation and served as a financial and accounting consultant to the
Company. Previously, Mr. Robinson served as Chief Financial Officer of
Green2go.com, Inc. from March 2000 to September 2001 and Assistant Corporate
Controller of AutoNation, Inc. from March 1997 to March 2000. He holds a Master
of Business Administration from the University of Florida, a Bachelor of Science
in Accounting from Florida Atlantic University and a Bachelor of Science in
Finance from the University of Florida. Mr. Robinson is a member of the American
Institute of Certified Public Accountants, the Florida Institute of Certified
Public Accountants and Financial Executives Institute.

Urs W. Stampfli joined us in May 1998 as Director of Global Sales and Marketing,
and became a Vice President of the Company in April 2000 and a Senior Vice
President of the Company in February 2002. From 1990 to April 1998, Mr. Stampfli
was Vice President, Marketing, Photo Imaging Systems of Agfa Division, Bayer
Corporation.

Scott L. Lampert, who is no relation to Ira B. Lampert, joined us in May 1999 as
Patent/Intellectual Property Attorney and served as Intellectual Property and
Business Development Counsel from August 2001 until August 2005 and as Associate
General Counsel of the Company from August 2005 until taking up his new duties
as Vice President, General Counsel and Secretary of the Company effective April
1, 2006. Prior to joining the Company, Mr. Lampert was in private practice. He
holds a Juris Doctor cum laude from Nova Southeastern University, a Masters of
Business Administration from Fordham University and a Bachelor of Science in
Engineering from Tulane University. Mr. Lampert is a member of the Florida Bar
and is licensed to practice before the United States Patent and Trademark
Office.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Policy

We design our executive officer compensation program to reward our executive
officers for our financial and operating performance, their leadership and the
creation of shareholder value. To achieve our business goals, it is critical
that we be able to attract, motivate and retain highly talented individuals at
all levels of the organization who are committed to our core values of
excellence, integrity and teamwork.

We seek to maintain an executive compensation program that attracts, motivates
and retains executive officers and rewards them for our financial and
operational performance and maintains our competitive position in our industry.
It is our belief that compensation should be based on the level of job
responsibility, individual performance and company performance. As employees
progress to higher levels in the organization and shoulder additional duties, an
increasing proportion of their pay should be linked to our performance, since
they are more able to affect our results. Additionally, compensation should
reflect the value of the job in the marketplace. In order to attract and retain
a highly skilled work force, we must remain competitive with the pay of other
employers who compete with us for talent. Although the programs and individual
pay levels will always reflect differences in job responsibilities, geographies
and marketplace considerations, the overall structure of compensation and
benefit programs is designed to be broadly similar across our workforce.

For Fiscal 2009 and future fiscal years, we believe that the total compensation
for our executive officers should contain incentive cash compensation and equity
compensation awards to further incentivize our executive officers to achieve our
financial and operational goals, to align the financial interests of the
executive officers with the creation of shareholder value and to retain our
executive officers by maintaining a compensation program that is competitive
with other employers who compete with us for talent.

Role of Compensation and Stock Option Committee

Our Compensation and Stock Option Committee (the "Committee"), comprised of two
independent directors, Messrs. O'Neill (Chairman) and Cooper, is responsible for
developing and approving the compensation program for our executive officers. In
addition, the Committee administers our equity-based incentive plans and
oversees such other benefit plans as we may from time to time establish.

Pursuant to our By-Laws, compensation of our CEO and any executive officer or
employee having a familial relationship to him is determined by a majority of
our independent directors (based on the Committee's recommendation) or by the
Committee.

Role of Executive Officers

Under the terms of the Committee's charter, our CEO may not be present during
deliberations or voting regarding his own compensation or any other officer,
employee or agent of the Company

having a familial relationship to him. The compensation of all other executive
officers is determined by the Committee. Our CEO has historically played a
significant role in the recommendation of the amounts of base salary and other
forms of cash and equity-based compensation to be paid to other executive
officers. Specifically, the CEO reviews the individual performance of the other
executive officers and provides the Committee with (i) evaluations of the other
executive officers, including an evaluation of each person's performance and how
such individual performance affected Company performance, and (ii)
recommendations regarding changes to such executive officer's compensation. We
expect that the Committee will continue to solicit input from our CEO with
respect to compensation affecting the other executive officers.

Considerations Regarding Compensation Decisions Relating to our Executive
Officers

Our financial and operating performance since 2004 has greatly limited the use
by the Committee and Board of cash incentive compensation and equity
compensation awards to compensate our executive officers. Since the launch of
our restructuring and cost-reduction initiatives in fiscal 2004, the achievement
of the restructuring and cost-reduction objectives and the ability of each of
the executive officers to fulfill their responsibilities with fewer resources
has represented a significant factor in the evaluation of the executive officers
and compensation recommendations by the Committee and the Committee's assessment
of the CEO's recommendations.

In connection with the Committee's periodic reviews and approvals of
compensation decisions affecting our executive officers other than the CEO, the
Committee strives to remain competitive with industry compensation practices of
other employers who compete with us for talent. The Committee reviews available
information, including information published in secondary sources, regarding
prevailing salaries and compensation programs offered to executive officers by
employers who compete with us for talent. The Committee, however, does not
currently use a peer group of companies to benchmark the compensation of the
executive officers. The Committee believes compensation for each of our
executive officers is competitive with other employers who compete with us for
talent.

Principal Components of Compensation of Our Executive Officers

The principal components of the compensation we have historically paid to our
executive officers have consisted of:

o Base salary;

o Non-incentive plan cash bonuses;

o Cash incentive compensation under the terms of incentive
compensation plans;

o Equity compensation, typically in the form of grants of options to
purchase shares of our common stock; and

o Perquisites.

For Fiscal 2008, the principal components of compensation paid to our executive
officers were base salary and perquisites. For Fiscal 2009, we anticipate the
principal components of compensation to be paid to our executive officers will
be base salary and perquisites.

Base Salary

Base salary is the fixed element of our employees' annual cash compensation. We
provide base salaries to recognize the experience, competencies, skills and
individual performance of our CEO and our other executive officers.

The Committee periodically reviews the base salary of our CEO and the base
salaries of our other executive officers based on the evaluations and
recommendations of the CEO. The Committee, in its periodic reviews of base
salaries and in its decisions to approve any changes to the amount of base
salaries for the executive officers, considers various factors such as the
relevant employment agreement, the executive's responsibilities, performance,
years of experience and leadership, our performance, and competitive salaries
within the marketplace for similarly situated executives. The CEO periodically
reviews the base salaries of our other executive officers and recommends to the
Committee any changes to such base salaries.

During Fiscal 2008, Mr. Ira Lampert's annual base salary remained at $900,000.
Mr. Lampert's base salary has not been increased since we amended his employment
agreement effective July 1, 2005. During Fiscal 2008, 2007 and 2006, the base
salaries for our other executive officers were increased in conjunction with
their promotion to a new executive officer position and the corresponding
increase in their responsibilities, in the case of Messrs. Robinson and Scott
Lampert, or as a result of consideration of the various factors described above,
in the case of Messrs. Stampfli and Angeli.

On April 1, 2006, Mr. Robinson was appointed as our Vice President--Finance,
Treasurer and Assistant Secretary and Principal Financial Officer. During Fiscal
2008, Mr. Robinson's annual base salary remained at $220,000. Mr. Robinson's
base salary has not been increased since October 1, 2006.

On April 1, 2006, Mr. Scott Lampert was appointed our Vice President, General
Counsel and Secretary. During Fiscal 2008, Mr. Scott Lampert's annual base
salary remained at $220,000. Mr. Scott Lampert's base salary has not been
increased since October 1, 2006.

As a result of an evaluation of the various factors described above, the
Committee approved an increase in the annual base salary of Gerald Angeli, the
Company's former Senior Vice President and Director of Operations, to $275,000
effective January 1, 2007, and Mr. Angeli's employment agreement was amended to
reflect the increase. Mr. Angeli's base salary had previously been increased
from $225,000 to $250,000 during Fiscal 2006 and the CEO recommended and the
Committee approved an additional increase of $25,000 during Fiscal 2007 to
remain competitive with respect to the base salaries of similarly situated
executives in the marketplace. Mr. Angeli's Terms of Employment was terminated
without cause effective July 1, 2008.

As a result of an evaluation of the various factors described above, the
Committee approved an increase in Mr. Stampfli's annual base salary to $275,000
effective January 1, 2007, and Mr. Stampfli's employment agreement was amended
to reflect the increase. Mr. Stampfli's base salary had previously been $250,000
during the prior four years, and the CEO recommended and the Committee approved
such increase to remain competitive with respect to the base salaries of
similarly situated executives in the marketplace.

Our Chief Executive Officer

We entered into an amendment to Mr. Lampert's employment agreement effective as
of July 1, 2005, at the end of our 2005 fiscal year, to provide a four-year term
that expires on June 30, 2009 with an annual base salary of $900,000 and, in
accordance with Mr. Lampert's proposal, to end our obligation to make $500,000
annual contributions to a Supplemental Executive Retirement Plan ("SERP")
adopted for his benefit. Mr. Lampert elected to terminate his SERP as of
November 28, 2005. Pursuant to the termination election, we made the final
distribution under Mr. Lampert's SERP as of August 6, 2007, subject, however, to
Mr. Lampert's rights in the event of a change in control (See page 67 ).

The Committee approved Mr. Lampert's compensation structure under the amended
employment agreement based on the following considerations: (i) his then current
employment terms; (ii) the complex international structure and operations of the
Company, which are equivalent to those of much larger complex international
corporations; (iii) the parity of CEO pay with our other executive officers at
that time; and (iv) the extensive worldwide travel and time requirements that
the CEO position entails. However, while taking this information into account,
the Committee did not attempt to "benchmark" Mr. Lampert's compensation against
the compensation of other chief executive officers. The Committee also took into
consideration that Mr. Lampert voluntarily reduced his base salary from $900,000
to $800,000 per annum for the period from July 1, 2004 to June 30, 2005 and our
January 1, 2005 contribution to his SERP from $500,000 to $350,000.

We have undergone a complex organizational restructuring and stringent cost
reductions as a result of the initiatives that we adopted during prior fiscal
years. Because of such initiatives and other recommendations of our Board that
were implemented, we believe that we have successfully reduced the number of our
senior executives and managers without adversely affecting our ability to
operate efficiently and to accomplish our goals. The reduction in the number of
executive officers, however, has increased the responsibilities of each of our
employees, officers and especially of our CEO. In approving Mr. Lampert's
compensation, the Committee considered these factors and his strong and
effective leadership during this transitional period. The Committee is also
aware that Mr. Lampert's compensation is based on our long-term and
long-standing contractual obligations to him and that these obligations were
negotiated at a time when we were managed by a larger number of executive
officers, whose average compensation significantly exceeded the average
compensation of our current executive officers and was more closely aligned with
the CEO's compensation. As a result, despite the current disparity between Mr.
Lampert's compensation and our other executive officers, the Committee believes
that Mr. Lampert is appropriately compensated for the increased

responsibility and oversight that our current organizational structure demands
of him and in light of our contractual obligations to him.

Non-Incentive Plan Bonus Compensation

During Fiscal 2008, the executive officers did not earn or receive any
non-incentive plan bonuses. We have not historically paid guaranteed or
discretionary non-incentive plan bonuses to our executive officers. We may from
time to time pay bonuses in connection with our initial hiring or appointment of
an executive officer and a change in an executive officer's responsibilities
with us. The Committee, however, has historically relied on cash incentive plans
to reward and incentivize our executive officers relating to company and
individual performance.

Incentive Compensation

We made no incentive compensation awards to our executive officers during Fiscal
2008.

The most recent incentive compensation awards, in the form of deferred long-term
compensation under our Amended and Restated 2002 Long-Term Cash Incentive Plan
(the "2002 LTCIP"), were made as of August 3, 2003 for the performance period
comprising the two fiscal years ended June 29, 2002 and June 28, 2003 ("fiscal
2002" and "fiscal 2003"). The deferred compensation was distributed in three
equal annual installments to certain of our executive officers, of which Messrs.
Ira B. Lampert and Stampfli continue to be employed by us. Distributions were
made to Mr. Stampfli as of August 6, 2004, 2005 and 2006. Mr. Lampert elected to
delay the vesting of his 2002 LTCIP award by one year and received distributions
as of August 6, 2005, 2006 and 2007. All the awards granted under the 2002 LTCIP
have been distributed. The amounts paid out to Messrs. Lampert and Stampfli are
included on the Nonqualified Deferred Compensation Table that appears in this
proxy statement. See also "Nonqualified Deferred Compensation" under the caption
"Executive Compensation" below.

During the three last completed fiscal years, all our executive officers were
eligible to receive awards under our Amended and Restated Annual Incentive
Compensation Plan, as amended through June 30, 2004 (the "2004 AICP"), and our
Long Term Incentive Compensation Plan Commencing Fiscal 2004 (the "LTIP"), which
replaced the 2002 LTCIP. However, based on our financial performance, we made no
awards to any of our executive officers under either the 2004 AICP or the LTIP.
The 2004 AICP was linked to our annual financial performance, under which awards
could have been made after the end of each fiscal year, provided that we met a
pre-determined return-on-equity target established by the Committee and approved
by our Board or the Board waived the target. The LTIP was linked to our
long-term financial performance and the achievement of pre-determined
performance criteria based on overlapping three-year fiscal cycles. The first
cycle was comprised of our fiscal years ended July 3, 2004, July 2, 2005
("Fiscal 2005") and July 1, 2006 ("Fiscal 2006"). Since we did not meet the
performance criteria that the Committee established during the three-year cycle,
no LTIP awards were made after the end of Fiscal 2006.

In September 2007, the Board approved in principle the establishment of a new
annual incentive compensation plan (the "Fiscal 2008 AICP") for our executive
officers, other than our current

CEO, who voluntarily opted not to receive awards under the Fiscal 2008 AICP, to
be administered by the Committee. The action of the Board in approving in
principal the establishment of the Fiscal 2008 AICP was motivated by the belief
that our long-term financial and operational success depended on further
incentivizing our executive officers by linking their financial interests to our
performance. The Fiscal 2008 AICP was intended to provide cash awards to our
eligible executive officers based on our achievement of certain performance
metrics during a fiscal year. To date, neither the Board nor the Committee
approved any potential incentive award opportunity for any eligible executive
officer under the Fiscal 2008 AICP.

Equity Compensation

Pursuant to the requirements of our current equity compensation plans, executive
officers who are not new hires are not eligible to receive equity compensation
awards under the plans. As a result, we were not able to grant any equity
compensation awards to our executive officers during Fiscal 2007 or Fiscal 2008.
Accordingly, the Board adopted and our shareholders approved at our 2007 annual
meeting held on December 13, 2007 a Fiscal 2008 Incentive Plan (the "Fiscal 2008
Plan") for our executive officers, other than our current CEO, who voluntarily
opted not to receive awards under the Fiscal 2008 Plan. The Fiscal 2008 Plan was
intended to: (i) incentivize our executive officers to achieve our strategic
goals; (ii) align the financial interests of the executive officers with the
creation of shareholder value; and (iii) attract, motivate and retain key
executive officers by providing compensatory incentives and maintaining
competitive compensation levels. To date, no equity compensation awards have
been granted under the Fiscal 2008 Plan.

Historically, our Board has granted awards of stock options to our executive
officers upon their being hired as Company employees, or during their term of
employment with us in conjunction with their being appointed executive officers,
consistent with our obligation to grant the options typically memorialized in
the employment agreement that we enter into with them. Our Board's historical
practice has been to grant equity-based awards to attract, retain, motivate and
reward our employees, particularly our executive officers, and to encourage
their ownership of an equity interest in us. Such grants have consisted of stock
options, which under our 2002 Incentive Plans consisted of non-qualified stock
options, that is, options that do not qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended.

All prior stock option awards to our executive officers and other employees have
been granted with exercise prices equal to the market value of the underlying
shares of common stock on the grant date, as determined by the Committee. All
equity-based awards have been reflected in our consolidated financial
statements, based upon the applicable accounting guidance. Effective July 3,
2005, we adopted the fair value recognition provisions of Statement of
Accounting Standards ("SFAS") No. 123R, "Share-Based Payment," as interpreted by
Financial Accounting Standards Board ("FASB") Staff Positions Nos. 123R-1,
123R-2, 123R-3, 123R-4, 123R-5 and 123R-6.

Our current incentive plans and the Fiscal 2008 Plan do not provide for awards
of incentive stock options. The ordinary income recognized by our executive
officers and other employees upon exercise of nonqualified stock options should
be deductible for federal income tax purposes.

Historically, we have not granted any form of equity under our incentive plans
other than stock options. The stock option awards have had no conditions to
vesting other than the awardee's continued employment with us and the passage of
time. Under the Fiscal 2008 Plan, we may grant non-qualified stock options,
stock appreciation rights, restricted and unrestricted shares, performance-based
nonqualified stock options and other stock-based awards.

We do not have any program, plan or practice that requires us to grant
equity-based awards on specified dates, and we have not made grants of such
awards that were timed to precede or follow the release or withholding of
material non-public information. It is possible that we will establish programs
or policies regarding the timing of equity-based awards in the future. Authority
to make equity-based awards to executive officers rests with the Committee,
which considers the recommendations of our CEO. As a NASDAQ-listed company, we
are subject to NASDAQ listing standards that, in general, require shareholder
approval of equity-based plans.

Clawback Policy

In accordance with Section 304 of the Sarbanes-Oxley Act of 2002, if we are
required to restate our financial statements due to our material noncompliance
with any financial reporting requirement under the federal securities laws, as a
result of misconduct, our CEO and Principal Financial Officer are legally
required to reimburse us for any bonus or other incentive-based or equity-based
compensation he or they receive from us during the twelve-month period following
the first public issuance or filing with the Commission of the financial
document embodying such financial reporting requirement, as well as any profits
they realize from the sale of our securities during this twelve-month period.

Severance and Change-in-Control Payments

Our Board believes that we should provide reasonable severance benefits to
employees, recognizing that we must be competitive with our severance practices
in order to attract and retain employees and that it may be difficult for the
employees to find comparable employment within a short period of time. Our Board
also believes it prudent that we should separate from terminated employees as
soon as practicable. In many instances, therefore, the termination of a U.S.
employee has been made effective immediately upon the communication of the
termination rather than at the expiration of any minimum advance notice period.
In such situations, we have continued to pay, on a post-termination basis, base
salary compensation to the terminated employee under his or her employment
agreement, if any, for the specified advance notice period. For employees of our
offices and facilities outside the United States, local laws may mandate longer
notice periods, during which our employees must remain in their positions, and
require severance payments. None of our executive officers is subject to the
laws of any jurisdiction other than the United States and the State of Florida.

Each of our executive officers' employment agreements provides for severance
payments. See "Potential Payments upon Termination or Change in Control" below
for a detailed discussion of each executive officer's severance arrangement. Our
Board believes that these severance arrangements are a necessary recruitment and
retention device, as most companies with which we compete for executive talent
will have severance arrangements in place. Our severance and

change-in-control arrangements are the direct result of specific negotiations
between management and each individual executive officer. Any changes to our
severance arrangements with our executive officers will result from specific
negotiations and will result in amendments to their employment agreements.

Other than our CEO, none of our executive officers has change-in-control payment
arrangements with the Company. Our employment agreement with Mr. Ira B. Lampert,
as amended to date, contains termination provisions that are more complex than
those in place for our other executive officers. The compensation due Mr.
Lampert in the event of the termination of his employment agreement varies
depending on the nature of the termination and, depending on the type and timing
of the termination, provides for substantial compensation payments to Mr.
Lampert. Mr. Lampert's employment agreement also provides for substantial
payments to him in the event we undergo a change in control. For additional
information regarding the termination and change in control provisions of Mr.
Lampert's employment agreement, see "Supplemental Executive Retirement Plans for
Named Executive Officers" and "Potential Payments upon Termination or Change in
Control" in this proxy statement. The termination and change-in-control
provisions of Mr. Lampert's employment agreement, which may be more favorable to
him than those in effect for chief executive officers of companies currently
comparable to us in terms of size, revenue, profitability and/or nature of
business, are the result of our long-standing, contractual obligations to him
negotiated with him several years ago.

Other Benefits

We believe that establishing competitive benefit packages for our employees is
an important factor in attracting and retaining highly qualified personnel.
Executive officers are eligible to participate in all of our employee benefit
plans, such as medical, dental, vision, group life insurance, disability
coverage and our 401(k) plan, in each case on the same basis as other full-time
employees. In Fiscal 2007, in order to boost employee morale and retain our
current employees, we provided a one-time matching contribution, the
preponderance of which was funded by forfeitures of non-vested contributions
made in prior years, to all our employees (including our executive officers) who
participated in the 401(k) plan during Fiscal 2006. We do not currently provide
a matching contribution under our 401(k) plan. All full-time employees are also
entitled to vacation and other paid holidays. We believe that our commitment to
provide the employee benefits described above shows our commitment to the health
and well-being of our employees which in turn leads to a more productive and
successful work life that will enhance results for us and our shareholders.

We provide to each of Messrs. Ira B. Lampert and Stampfli a term life insurance
policy for such beneficiaries as he designates, and to each of Messrs. Ira B.
Lampert and Stampfli additional long-term disability coverage. We may and have
purchased key-man life insurance on the life of Mr. Ira B. Lampert, which we can
use to satisfy our obligations under his employment agreement in the event of
his death. We also pay the disability insurance policy premiums on behalf of Mr.
Ira B. Lampert, which would reduce the amount of any payment we would owe him
under his employment agreement if his employment with us is terminated due to
disability. See "Potential Payments upon Termination or Change in Control" below
for a detailed discussion of the

termination payment that would be due to Mr. Lampert under the terms of his
employment agreement in the event of disability.

Our officers and employees located in offices and facilities outside the United
States may have somewhat different employee benefit plans than those we offer
domestically, typically based on certain legal requirements in such foreign
jurisdictions.

Perquisites

We provide our executive officers with perquisites that further their ability to
develop and promote our business interests and reflect competitive practices at
similarly situated companies. Currently, our perquisites include an automobile
allowance for each executive officer. Our CEO receives additional perquisites in
accordance with his employment terms, including: (i) expenses related to his
automobile allowance; (ii) partial housing costs; (iii) reimbursement of certain
taxes; (iv) payment of life insurance (which we also pay on behalf of Messrs.
Angeli and Stampfli) and disability insurance premiums (which we also pay on
behalf of Mr. Stampfli); and (v) reimbursement of a portion of his country club
dues. The types and amounts of perquisites awarded to the executive officers
result from negotiations between us and the executive officers and are
memorialized in their employment agreements. Additionally, the executive
officers are eligible to participate in the Flexible Perquisite Spending Account
Program for Corporate Officers that was first effective for the fiscal year
ended June 29, 2002 (the "Flexible Perquisite Program"), pursuant to which each
executive officer would be allocated up to $10,000 for certain qualifying
personal expenses, such as income tax preparation, estate planning expenses,
airline and health/fitness club memberships and other miscellaneous expenses
approved by our CEO at his discretion. Since Fiscal 2005, no employee, including
the executive officers, has participated in the Flexible Perquisite Program.

Section 162(m) of the Internal Revenue Code

Section 162(m) of the Internal Revenue Code generally does not allow a deduction
for annual compensation in excess of $1,000,000 paid to our executive officers.
This limitation on deductibility does not apply to certain compensation,
including compensation that is payable solely on account of the attainment of
one or more performance goals. Our policy is generally to preserve the federal
income tax deductibility of compensation and to qualify eligible compensation
for the performance-based exception in order for compensation not to be subject
to the limitation on deductibility imposed by Section 162(m) of the Internal
Revenue Code. We may, however, approve compensation that may not be deductible
if we determine that the compensation is in our best interests as well as the
best interests of our shareholders.

Compensation Committee Report

The Compensation and Stock Option Committee has reviewed and discussed the
Compensation Discussion and Analysis contained in this proxy statement with
management. Based on its review and discussions with management with respect to
the Compensation Discussion and Analysis, the Compensation and Stock Option
Committee recommended to the Board that the

Compensation Discussion and Analysis be included in this proxy statement on
Schedule 14A for filing with the Commission.

Compensation and Stock Option Committee

William J. O'Neill, Jr., Chairman
Ronald S. Cooper

October 29, 2008

The compensation committee report above shall not be deemed to be "soliciting
material" or to be "filed" with the Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, each as amended, except to the
extent that we specifically incorporate it by reference into such filing.

Compensation Committee Interlocks and Insider Participation

The membership of the Compensation and Stock Option Committee during Fiscal 2008
consisted of Messrs. O'Neill and Cooper. No member of the Compensation and Stock
Option Committee is now or ever was an officer or an employee of ours or any of
our subsidiaries. None of our executive officers serves as a member of the
compensation committee or as a director of any entity one or more of whose
executive officers serves as a member of our Board or our Compensation and Stock
Option Committee. There were no compensation committee interlocks during Fiscal
2008.

Executive Compensation

Summary Compensation Table

The following table sets forth information regarding compensation earned in or
with respect to Fiscal 2008 by:

o The person who served as our Chief Executive Officer during Fiscal
2008;

o The person who served as our Principal Financial Officer during
Fiscal 2008; and

Our three most highly compensated executive officers, other than our Chief
Executive Officer and our Principal Financial Officer, each of whom earned in
excess of $100,000 for Fiscal 2008. In this section, we refer to these officers
collectively as our named executive officers.

SUMMARY COMPENSATION TABLE

Option All Other
Salary Awards Compensation Total
Name and Principal Position Year ($) ($)(10) ($) ($)
---------------------------------- ------ --------- --------- ------------ ---------

Ira B. Lampert, 2008 900,000 -- 546,044 (1) 1,446,044
Chairman, Chief 2007 900,000 -- 334,792 (2) 1,234,792
Executive Officer
and President

Blaine A. Robinson, 2008 220,000 -- 9,000 (3) 229,000
Vice President - Finance, 2007 217,500 -- 12,919 (4) 230,419
Treasurer and Assistant
Secretary

Gerald J. Angeli, 2008 275,000 -- 319,865 (5) 594,865
Senior Vice President, Director 2007 262,500 -- 12,550 (6) 275,050
of Operations and Assistant
Secretary (former officer)

Urs W. Stampfli, 2008 275,000 -- 18,416 (7) 293,416
Senior Vice President and 2007 262,500 -- 22,616 (8) 285,116
Director of Global
Sales & Marketing

Scott L. Lampert, 2008 220,000 -- 9,000 (3) 229,000
Vice President, 2007 217,500 1,334 12,664 (9) 231,498
General Counsel and
Secretary

----------
(1) Represents (a) automobile allowance and costs of $35,844; (b) partial
housing costs of $48,000; (c) reimbursement of certain taxes of $60,798
and a portion of country club dues of $8,984; (d) our payment of life and
disability insurance premiums on behalf of Mr. Lampert of $48,184; (e)
$229,234, which was the fair market value of 66,202 shares of our common
stock delivered to Mr. Lampert on July 2, 2007, the delivery of

which he had elected to defer for two years under the terms of our
Deferred Delivery Plan; and (f) $45,000 of accrued but unused vacation
time.

(2) Represents (a) automobile allowance and costs of $30,534; (b) partial
housing costs of $48,000; (c) reimbursement of certain taxes of $58,323
and a portion of country club dues of $4,198; (d) a one-time contribution
to our 401(k) Plan on behalf of Mr. Lampert of $3,750; (e) our payment of
life and disability insurance premiums on behalf of Mr. Lampert of
$41,527; (f) $79,229, which was the fair market value of 35,609 shares of
our common stock delivered to Mr. Lampert on August 9, 2006, the delivery
of which he had elected to defer for two years under the terms of our
Deferred Delivery Plan; and (g) $69,231 of accrued but unused vacation
time.

(3) Represents automobile allowance of $9,000.

(4) Represents (a) automobile allowance of $9,000 and (b) a one-time
contribution to our 401(k) Plan on behalf of Mr. Robinson of $3,919.

(5) Represents (a) automobile allowance of $12,000, (b) payment of life
insurance premium of $550, (c) $10,315 of accrued but unused vacation
payout and (d) $297,000 of accrued but unpaid severance payout. On June
24, 2008, the Terms of Employment between us and Gerald J. Angeli was
terminated without cause effective July 1, 2008.

(6) Represents (a) automobile allowance of $12,000 and (b) payment of life
insurance premium of $550.

(7) Represents (a) automobile allowance of $12,000 and (b) our payment of life
and disability insurance premiums on behalf of Mr. Stampfli of $6,416.

(8) Represents (a) automobile allowance of $12,000; (b) our payment of life
and disability insurance premiums on behalf of Mr. Stampfli of $6,416; and
(c) a one-time contribution to our 401(k) Plan on behalf of Mr. Stampfli
of $4,200.

(9) Represents (a) automobile allowance of $9,000 and (b) a one-time
contribution to our 401(k) Plan on behalf of Mr. Scott Lampert of $3,664.

(10) Reflects the dollar amount recognized for financial statement reporting
purposes in accordance with FAS 123R with respect to fiscal 2007 for
options granted in prior years to the extent an annual installment or
installments vested during fiscal 2007. These amounts reflect our
accounting expense for these awards and do not correspond to the actual
value that may be recognized by the named executive officers. Please refer
to note 11 to the financial statements in our Annual Report in Form 10-K
for the fiscal year ended June 30, 2007. Pursuant to SEC rules, the
amounts shown exclude the impact of estimated forfeitures related to
service-based vesting conditions.

Grants of Plan-Based Awards

No grant of an equity or non-equity award was made to any of our named executive
officers during Fiscal 2008 under any plan.

Narrative Disclosure to Summary Compensation Table

Executive Employment Arrangements

Ira B. Lampert

Effective as of July 1, 2005, the employment agreement dated as of May 1, 1997
between us and Mr. Lampert was amended to provide a four-year term that expires
on July 1, 2009 and, in accordance with Mr. Lampert's proposal, to end our
obligation to make a $500,000 annual contribution to a SERP adopted for Mr.
Lampert's benefit. The agreement provides for an annual base salary of $900,000.

Mr. Lampert's employment agreement entitles him to participate generally in all
pension, retirement, insurance, savings, welfare and other employee benefit
plans and arrangements and fringe benefits and perquisites maintained by us from
time to time for senior executives of a comparable level. In addition to any
life and disability insurance provided pursuant to one of our plans, Mr.
Lampert's employment agreement requires us to provide long-term disability
coverage with a $352,000 annual benefit and a $1,000,000 lump-sum payment to be
credited against the amount of base salary due to Mr. Lampert under the terms of
his employment agreement in the event that Mr. Lampert's employment with us is
terminated due to his disability and term life insurance, for such beneficiaries
as are designated by Mr. Lampert, of $5 million face value. Notwithstanding the
terms of Mr. Lampert's employment agreement, it is Mr. Lampert's and our
understanding that the foregoing $1,000,000 lump-sum payment will not be
provided to Mr. Lampert and that the amount of the base salary payable to Mr.
Lampert if his employment with us is terminated due to his disability will be
payable in accordance with our regular payroll practices and will be reduced by
disability benefits, currently payable at the rate of $600,000 per annum, under
disability insurance policies that we provide for his benefit. In addition, we
may purchase key-man life insurance on the life of Mr. Lampert, which may be
used to satisfy our obligations under Mr. Lampert's employment agreement in the
event of his death. We currently maintain $5 million in key-man life insurance
on the life of Mr. Lampert.

Pursuant to Mr. Lampert's employment agreement, we adopted a SERP for his
benefit. A specified amount, most recently $350,000, was credited to Mr.
Lampert's SERP account each year. These yearly credits were 100% vested and not
subject to forfeiture. Mr. Lampert voluntarily reduced the amount of the credit
made in January 2005 from $500,000 to $350,000. Effective as of July 1, 2005,
Mr. Lampert voluntarily released us from our obligation to make a $500,000
annual contribution to his SERP. However, if control of the Company changes and
Mr. Lampert remains employed by us thereafter, we will be obligated to pay Mr.
Lampert $500,000 within 30 days after the date of the change in control and
annually during the remaining term of his employment with us on the first
business day of each calendar year following the change in control.

Beginning in fiscal 2000, as a result of the deferral of certain incentive
compensation awards, additional credits were made to Mr. Lampert's SERP for,
among other things, the LTCIP award (described below under "Deferred Long-Term
Compensation"). In August 2007, the remaining vested account balance in Mr.
Lampert's SERP was distributed to him, following which Mr. Lampert had no
undistributed nonqualified deferred compensation.

Blaine A. Robinson

Mr. Robinson's employment agreement, as amended to date, provides for (i) an
annual base salary of $210,000 effective April 1, 2006 and an increase from
$210,000 to $220,000, which

was effective October 1, 2006 upon Mr. Robinson's satisfaction of certain
performance objectives mutually agreed upon by our CEO and Mr. Robinson; (ii) an
annual automobile allowance of $9,000; and (iii) automatic renewals of Mr.
Robinson's employment with us until terminated either by us for "cause" (as
defined in the agreement) or at any time by either party for any reason or no
reason with 30 days' prior written notice to the other party. Mr. Robinson's
employment agreement entitles him to participate generally in all pension,
retirement, insurance, savings, welfare and other employee benefit plans and
arrangements and fringe benefits and perquisites maintained by us from time to
time for senior executives of a comparable level.

Gerald J. Angeli

Mr. Angeli's employment agreement, which was terminated effective July 1, 2008,
provided for an annual base salary of $275,000 effective January 1, 2007 and an
annual automobile allowance of $12,000. Mr. Angeli's employment agreement had an
initial three-year term beginning January 1, 2003 and renewed annually on
January 1 unless sooner terminated by us for "cause" (as defined in the
agreement) or by either party for any reason or no reason with three months'
prior written notice to the other party. Mr. Angeli's employment agreement
entitled him to participate generally in all pension, retirement, insurance,
savings, welfare and other employee benefit plans and arrangements and fringe
benefits and perquisites maintained by us from time to time for senior
executives of a comparable level.

Mr. Angeli received two grants of deferred compensation in 2001 and 2004, which
are described under "Supplemental Executive Retirement Plans for Named Executive
Officers" below. In December 2005, the vested account balance in Mr. Angeli's
SERP, consisting of the principal and accumulated interest of the deferred
compensation in the form of non-elective deferrals, was distributed to Mr.
Angeli pursuant to elections that he made in November 2005. Additional
installments that vested during Fiscal 2007, consisting of the principal and
accumulated interest, were distributed to Mr. Angeli during Fiscal 2007. In
accordance with Mr. Angeli's election in November 2005, the remaining unvested
funds in Mr. Angeli's SERP, which consisted of principal and accumulated
interest in an amount of $26,655 at June 30, 2007, was distributed to him
immediately as each installment vested until July 1, 2008 when Mr. Angeli's
employment with us was terminated and Mr. Angeli forfeited the balance of the
remaining funds. See "Nonqualified Deferred Compensation" below.

Urs W. Stampfli

Mr. Stampfli's employment agreement, as amended to date, provides for an annual
base salary of $275,000 effective January 1, 2007 and an annual automobile
allowance of $12,000. Mr. Stampfli's employment agreement will expire on January
1, 2009 unless sooner terminated by us for "cause" (as defined in the agreement)
or by either party with 30 days' prior written notice to the other party. Mr.
Stampfli's employment agreement entitles him to participate generally in all
pension, retirement, insurance, savings, welfare and other employee benefit
plans and arrangements and fringe benefits and perquisites maintained by us from
time to time for senior executives of a comparable level.

A credit was made to Mr. Stampfli's SERP for the LTCIP award (described below
under "Deferred Long-Term Compensation"). In December 2005, the vested account
balance in his SERP, consisting of the principal and accumulated interest of the
first two installments of the LTCIP award, was distributed to Mr. Stampfli
pursuant to elections that he made in November 2005. The third installment,
consisting of the principal and accumulated interest on the third and final
installment of the LTCIP award in an amount of $94,795, was distributed to Mr.
Stampfli in August 2006. Following this distribution, Mr. Stampfli had no
undistributed nonqualified deferred compensation. See "Nonqualified Deferred
Compensation" below.

Scott L. Lampert

Mr. Scott Lampert's employment agreement, as amended to date, provides for (i)
an annual base salary of $210,000 effective April 1, 2006 and an increase from
$210,000 to $220,000, which was effective October 1, 2006 upon Mr. Lampert's
satisfaction of certain performance objectives mutually agreed upon by our CEO
and Mr. Lampert; (ii) an annual automobile allowance of $9,000; and (iii)
automatic annual renewals of Mr. Lampert's employment with us until terminated
either by us for "cause" (as defined in the agreement) or at any time by either
party for any reason or no reason with 30 days' prior written notice to the
other party. Mr. Lampert's employment agreement entitles him to participate
generally in all pension, retirement, insurance, savings, welfare and other
employee benefit plans and arrangements and fringe benefits and perquisites
maintained by us from time to time for senior executives of a comparable level.

Supplemental Executive Retirement Plans for Named Executive Officers

Pursuant to Mr. Ira Lampert's employment agreement, we adopted a SERP for his
benefit. A specified amount of deferred compensation, which was $500,000 through
June 30, 2005, was credited to his SERP account each year. These yearly credits
were 100% vested and not subject to forfeiture. As a result of the Company's
poor financial performance, Mr. Lampert voluntarily reduced the amount of the
credit that was made in January 2005 from $500,000 to $350,000. Effective as of
July 1, 2005, we were no longer obligated to make $500,000 annual contributions
to Mr. Lampert's SERP. However, if a change of control of the Company occurs and
Mr. Lampert remains employed by us thereafter, we will be obligated to pay Mr.
Lampert $500,000 within 30 days after the date of the change of control and
annually during the remaining term of his employment on the first business day
of each calendar year following the change of control. A "change of control"
under Mr. Lampert's employment agreement includes shareholders approval of a
dissolution and plan of liquidation. In the event the shareholders approve the
proposed dissolution and plan of liquidation, Mr. Lampert would be entitled to a
$500,000 payment within days after the shareholders' approval and would also be
entitled to an additional $500,000 payment on the first business day of each
calendar year following the shareholders' approval, provided Mr. Lampert remains
employed by us. Mr. Lampert has waived any entitlement to any such payment
beyond the initial $500,000 payment. We also approved a one-time grant of
deferred compensation to Mr. Lampert in the amount of $1,549,998 which vested in
three equal annual installments on January 1, 2001, January 1, 2002, and January
1, 2003, and Mr. Lampert's SERP was amended to include appropriate terms to
govern this one-time grant of deferred compensation.

Effective as of April 19, 2000, we adopted a SERP for Mr. Stampfli's benefit in
connection with a one-time grant of deferred compensation of $110,000 to him,
which vested in three equal annual installments on January 1, 2001, January 1,
2002 and January 1, 2003.

In connection with a one-time grant of $115,000 in deferred compensation to
Gerald J. Angeli, we adopted a SERP for his benefit as of July 31, 2001.
Pursuant to Mr. Angeli's SERP, the grant vested, so long as Mr. Angeli continued
to be employed by us, in five annual installments on June 11, 2002, 2003, 2004,
2005 and 2006. As of March 22, 2004, Mr. Angeli's SERP was amended pursuant to
an amendment to his employment agreement granting him an additional amount of
$50,000 in deferred compensation. The additional grant vested and would continue
to vest, so long as Mr. Angeli continued to be employed by us, in five equal
annual installment of $10,000 each on March 22, 2005, 2006, 2007, 2008 and 2009.
As Mr. Angeli's employment with us was terminated effective July 1, 2008, Mr.
Angeli forfeited the balance of this additional grant that had not vested as of
the termination date.

Each time we credited an executive's account under a SERP agreement, we
simultaneously contributed an equal amount to a trust established for the
purpose of accumulating funds to satisfy the obligations incurred by us pursuant
to the SERP. In addition, each account under a SERP agreement was subject to
adjustment for income, expenses, gains or losses sustained as a result of
investment of the SERP funds as directed by the executive (or an investment
manager chosen by the executive) in his sole discretion, except that we directed
the investment, in accordance with our Cash Investment Policy, which sets forth
the Board's guidelines for the investment of Company cash, of any unvested
balances in an account established as a result of the deferred LTCIP award to
Mr. Lampert. See "Deferred Long-Term Compensation" below for information
regarding SERP elections made by Messrs. Lampert, Angeli and Stampfli, pursuant
to which we made distributions to them from their respective SERPs during Fiscal
2008.

Although the SERP agreements for Messrs. Lampert, Stampfli and Angeli have not
been terminated, each SERP participant elected to terminate his participation in
his SERP as a result of the adoption of Section 409A under the Internal Revenue
Code. Any remaining balances as of December 31, 2005 were distributed (or will
be distributed immediately upon vesting) to the SERP participants, and no
elective or non-elective contributions have been made to any of the SERPs since
Section 409A was adopted.

Deferred Long-Term Compensation

As of August 6, 2003, Messrs. Ira B. Lampert and Stampfli were awarded $670,474
and $274,021, respectively, of deferred compensation under the 2002 LTCIP with
respect to the fiscal 2002-2003 performance period, the distribution of which
was contingent on their continued employment with us.

The LTCIP award to Mr. Stampfli vested, so long as he continued to be employed
by us, in three equal annual installments on August 6, 2004, 2005 and 2006, or
immediately upon: (i) a change of control of the Company; or (ii) his death or
disability.

Mr. Lampert voluntarily agreed to delay the vesting of his LTCIP award by one
year, and it vested in three equal installments beginning on August 6, 2005,
2006 and 2007, instead of August 6, 2004, 2005 and 2006. Otherwise, the LTCIP
award granted to Mr. Lampert had substantially the same terms and conditions as
the award granted to Mr. Stampfli, except that, in addition to the events that
would have accelerated the vesting of Mr. Stampfli's award, Mr. Lampert's award
provides for immediate vesting in the event of termination without cause, a
constructive termination of employment without cause or the non-renewal of his
employment agreement.

Mr. Lampert's SERP and Mr. Stampfli's SERP were amended to include appropriate
terms to govern the LTCIP awards. We contributed the foregoing amounts to trusts
established for the purpose of holding funds to satisfy our obligations under
the LTCIP awards.

Management Equity Provisions of 1993 Incentive Plan

In August 1995, the Committee approved stock purchase awards under the
Management Equity Provisions ("MEP") of our 1993 Incentive Plan. We received
commitments for the purchase of 888,000 shares (the "Purchased Shares"). Each
purchaser was also granted the right to receive a contingent restricted stock
award covering a number of shares equal to the number of shares he had purchased
based upon attainment of increases in shareholder value in accordance with the
plan.

In November 1995, each then participating member of the MEP group entered into a
Voting Agreement pursuant to which each member agreed to vote all of his
Purchased Shares and contingent restricted stock awarded pursuant to the MEP in
accordance with the determination of the holder of a majority of all of the
Purchased Shares and contingent restricted stock held by the purchasers. To
effect the foregoing, each of the members delivered an irrevocable proxy to Mr.
Ira B. Lampert. In February 1997, the Voting Agreement and the irrevocable
proxies were amended and restated to govern the options to purchase shares of
our common stock ("Option Shares") awarded to the then members of the MEP group
in December 1996 in lieu of the contingent restricted stock.

During Fiscal 2006, the MEP group consisted of Mr. Ira B. Lampert and Mr. Keith
L. Lampert, our former Executive Vice President and Chief Operating Officer. The
MEP was terminated on November 16, 2006 and Mr. Ira B. Lampert relinquished the
voting proxy he held to vote the 21,000 Purchased Shares held by Mr. Keith
Lampert. In April 2007, Mr. Ira B. Lampert purchased the 21,000 Purchased Shares
from Mr. Keith Lampert in a private transaction.

Outstanding Equity Awards at 2008 Fiscal Year-End

The following table provides information at June 28, 2008 regarding unexercised
stock options that we granted to each of our named executive officers.

Outstanding Equity Awards at 2008 Fiscal Year-End

Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised
Options Options Option
(#) (#) Exercise Option
----------- ------------- Price Expiration
Name Exercisable Unexercisable ($) Date
--------- ----------- ------------- -------- ----------
Ira B. Lampert 52,600 -- 29.85 4/23/2010
Blaine A. Robinson 3,000 -- 27.75 2/10/2013
600 400(1) 8.80 9/21/2014
Gerald J. Angeli 13,500 -- 29.85 4/16/2010
Mrs. W Stampfli 3,733 -- 29.85 4/23/2010
Scott L. Lampert 1,800 -- 13.83 6/13/2009
900 -- 29.85 9/06/2010
600 -- 27.50 9/16/2011
160 240(2) 5.70 3/29/2016

----------
(1) These stock options vest in five equal annual installments, with the first
installment having vested on August 13, 2005.

(2) These stock options vest in five equal annual installments, with the first
installment having vested on August 1, 2006.

Option Exercises and Stock Vested during Fiscal 2008

In Fiscal 2008, none of our named executive officers exercised any Company stock
options or similar awards nor did any stock awards vest.

Pension Benefits

None of our named executive officers is covered by a pension plan or other
similar benefit plan that provides for payments or other benefits at, following
or in connection with retirement, except for the SERPs, which constitute
nonqualified defined contribution plans. The earnings and distributions related
to the SERPs during Fiscal 2008 are disclosed below under "Nonqualified Deferred
Compensation."

Nonqualified Deferred Compensation

The table below provides information about nonqualified deferred compensation
arrangements with our named executive officers. Please refer to the Narrative
Disclosure to Summary Compensation Table - Supplemental Executive Retirement
Plans for Named Executive Officers, for a discussion of the SERP accounts of our
named executive officers.

Nonqualified Deferred Compensation at 2008 Fiscal Year-End

Aggregate Aggregate Aggregate
Earnings in Withdrawals/ Balance at Last
Last Fiscal Year Distributions Fiscal Year End
($)(1)(2) ($) ($)
---------------- ------------- ---------------

Ira B. Lampert 1,209 247,918(3) --
Blaine A. Robinson -- -- --
Gerald J. Angeli -- 12,636(4) 12,053
Urs W. Stampfli -- -- --
Scott L. Lampert -- -- --

----------
(1) Amounts reflected in this column were not reported as compensation to the
named executive officers in our summary compensation table for Fiscal year
2008.

(2) Earnings on nonqualified compensation disclosed in this table are based on
the rate of return of the investment options selected by the named
executive officer, except that the Company directed the investment of any
unvested balances in an account established as a result of the 2002 LTCIP
award to Mr. Ira Lampert in accordance with its cash investment policy.

(3) Represents distributions of the principal that vested during Fiscal 2008
and accumulated interest under awards approved on August 6, 2003 under the
2002 LTCIP in effect for the performance period comprising fiscal years
2002 and 2003. The 2002 LTCIP awards made to Messrs. Lampert and Stampfli
for this performance period were in the form of contingent non-elective
deferred compensation to be earned over three years and governed by terms
and conditions of their respective SERPs. See Executive Employment
Arrangements, "Deferred Long-Term Compensation," above.

(4) Represents distributions from Mr. Angeli's SERP of the principal that
vested during Fiscal 2008 and accumulated interest thereon in connection
with deferrals of Mr. Angeli's salary.

Potential Payments upon Termination or Change in Control

Ira B. Lampert

The compensation due Mr. Lampert in the event of the termination of his
employment agreement with us varies depending on the nature of the termination.

Termination upon Death or Disability. Mr. Lampert's employment agreement
provides that if his employment with us is terminated by reason of death or
disability, Mr. Lampert or his legal representative would be entitled to
receive, in addition to accrued compensation (including, without limitation, any
earned but unpaid bonus or long-term incentive awards, any amount of base salary
accrued or earned but unpaid, any deferred compensation earned but unpaid, any
accrued but unused vacation pay and unreimbursed business expenses (the "Accrued
Amounts")), his base salary for the scheduled balance of the term (payable in
the case of death in a lump sum), a prorated bonus for the year in which the
death or disability occurred, and any other or additional benefits owed to Mr.
Lampert under our then applicable employee benefit plans or policies, subject in
the case of disability to offset against the base salary payment by the

amount of any disability benefits provided to him by us or under any disability
insurance that we provide or pay for.

Under Mr. Lampert's employment agreement, "disability" is defined as his
inability, due to physical or mental incapacity, to substantially perform his
duties and responsibilities under the employment agreement for a period of 180
consecutive days or for 180 days during a 365-day period.

If we had terminated Mr. Lampert's employment with us by reason of death on June
28, 2008, Mr. Lampert's legal representative would have received from us a
lump-sum payment in the approximate amount of $983,000.

If we had terminated Mr. Lampert's employment with us due to disability on June
28, 2008, Mr. Lampert would have received from us over the balance of his
employment term payments in accordance with our regular payroll practices in the
approximate amount of $383,000.

Termination for Cause or Resignation. If we terminate Mr. Lampert's employment
for cause, or he voluntarily resigns, he will only receive the Accrued Amounts
and benefits provided in benefit plans. Under Mr. Lampert's employment
agreement, "cause" is defined as: (i) Mr. Lampert is convicted of a crime
involving moral turpitude (excluding offenses such as driving while
intoxicated); or (ii) Mr. Lampert (A) perpetrates a fraud upon the Company or
(B) materially breaches his employment agreement which causes, in the case of
clause (B), material economic harm to the Company.

If we had terminated Mr. Lampert's employment for cause or he resigned
voluntarily on June 28, 2008, Mr. Lampert would have received from us a lump-sum
payment in the approximate amount of $83,000.

Termination or Constructive Termination without Cause. If we terminate Mr.
Lampert's employment with us without cause or if there is a constructive
termination without cause, Mr. Lampert would be entitled to receive the Accrued
Amounts, his base salary and continuation of his benefits (or the economic
equivalent of such benefits), the additional life and disability insurance and
certain perquisites for the scheduled balance of the term and for an additional
12 months thereafter, and a prorated bonus for the year in which the termination
occurred.

Under the terms of Mr. Lampert's employment agreement, "constructive termination
without cause" is defined as a termination of Mr. Lampert's employment at his
initiative following the occurrence, without his prior written consent, of one
or more of the following events (except in consequence of a prior termination):
(i) a reduction in or elimination of (A) Mr. Lampert's then current annual base
salary, (B) his bonus opportunity for which he is eligible, or (C) his
opportunity for any long-term incentive award for which he is eligible under his
employment agreement or the termination or material reduction of any employee
benefit or perquisite he enjoys; (ii) the failure to elect or reelect Mr.
Lampert to any of the positions described in the employment agreement or his
removal, without cause, from any such position; (iii) a material diminution in
Mr. Lampert's duties as our Chairman and CEO or the assignment to Mr. Lampert of
duties which are materially inconsistent with such duties or which materially
impair Mr.

Lampert's ability to function as our Chairman and CEO; (iv) the failure to
continue Mr. Lampert's participation in any incentive compensation plan for
which he is eligible unless a plan providing a substantially similar opportunity
is substituted; (v) the relocation of our principal office, or Mr. Lampert's own
office location as assigned to him by us, to a location more than 50 miles from
Hollywood, Florida; or (vi) our failure to obtain the assumption in writing of
our obligation to perform the employment agreement by any successor to all or
substantially all of our assets within 45 days after the merger, consolidation,
sale or similar transaction resulting in such succession, provided that Mr.
Lampert may not treat such failure as a constructive termination without cause
unless such failure is not cured within 10 days after receipt of notice thereof
by such successor from Mr. Lampert.

The relocation of our principal office from New Jersey to Florida resulted in an
amendment to Mr. Lampert's employment agreement dated August 25, 1998 that
provided him with relocation expenses estimated to be $15,000 and continuation
of the partial reimbursement of his housing costs of $4,000 per month.

If we had terminated Mr. Lampert's employment with us without cause or if there
had been a constructive termination without cause on June 28, 2008, Mr. Lampert
would have received payments in accordance with our regular payroll practices in
the approximate amount of $2,219,000, payable for the scheduled balance of his
employment term and for an additional 12 months thereafter.

Termination following a Change in Control. Under the terms of Mr. Lampert's
employment agreement, a "change in control" is defined as the occurrence of any
one of the following events: (i) any "person," as such term is used in Sections
3(a)(9) and 13(d) of the Exchange Act (other than Mr. Lampert), becomes a
"beneficial owner," as such term is used in Rule 13d-3 promulgated under the
Exchange Act, of 25% or more of our voting shares; (ii) the majority of our
Board consists of individuals other than "incumbent directors," which term means
the members of the Board on the date of Mr. Lampert's employment agreement;
provided that any person becoming a director subsequent to such date whose
election or nomination for election was supported by two-thirds of the directors
who then comprised the "incumbent directors" will be considered to be an
"incumbent director"; (iii) we adopt any plan of liquidation providing for the
distribution of all or substantially all of our assets; (iv) all or
substantially all of the assets of our business are disposed of pursuant to a
merger, consolidation or other transaction (unless our shareholders immediately
prior to such merger, consolidation or other transaction beneficially own,
directly or indirectly, in substantially the same proportion as they owned our
voting shares, the voting shares or other ownership interests of the entity or
entities, if any, that succeed to our business); or (v) we combine with another
company and we are the surviving corporation but, immediately after the
combination, our shareholders immediately prior to the combination hold,
directly or indirectly, 50% or less of the voting shares of the combined company
(there being excluded from the number of shares held by such shareholders, but
not from the voting shares of the combined company, any shares received by
affiliates of the other company in exchange for stock of such other company).

If a termination without cause or constructive termination followed a change in
control of the Company, Mr. Lampert would be entitled to receive the salary
continuation benefit as a lump-

sum payment without any discount. In addition, subject to limited exceptions,
any benefits, including options, in which he is not at such time fully vested
would become fully vested and any options would remain exercisable for the full
stated term of the option. If the severance payments to Mr. Lampert under his
employment agreement follow a change in control and, together with other amounts
paid to Mr. Lampert, exceed certain threshold amounts and are determined to
constitute a parachute payment (as defined in Section 280G(b)(2) of the Internal
Revenue Code), Mr. Lampert is to receive an additional amount to cover the
federal excise tax with respect thereto on a "grossed up" basis.

Under the terms of Mr. Lampert's employment agreement, as amended to date, if a
change in control of the Company occurs and Mr. Lampert remains employed by us
thereafter, we will be obligated to pay Mr. Lampert $500,000 within 30 days
after the date of the change in control and annually during the remaining term
of his employment with us on the first business day of each calendar year
following the change of control. In the event the shareholders approve the
proposed dissolution and plan of liquidation, Mr. Lampert would be entitled to a
$500,000 payment within days after the shareholders' approval and would also be
entitled to an additional $500,000 payment on the first business day of each
calendar year following the shareholders' approval, provided Mr. Lampert remains
employed by us. Mr. Lampert has waived any entitlement to any such payment
beyond the initial $500,000 payment.

If a change in control had occurred on June 28, 2008 that resulted in the
termination of Mr. Lampert's employment with us, he would have received a
lump-sum payment in the approximate amount of $2,219,000.

Blaine A. Robinson

Mr. Robinson's employment agreement, as amended to date, can be terminated by
him or by us for any reason or no reason upon providing 30 days written notice
to the other party. The agreement provides that if the termination by us for any
reason other than cause or no reason is effective before such notice period
expires, we are required to pay Mr. Robinson his base salary and car allowance
for the remainder of the notice period. Additionally, if we terminate Mr.
Robinson for any reason other than cause or for no reason, Mr. Robinson is
entitled to receive (i) up to 12 months' base salary and car allowance, with the
combination of notice and severance payments not to exceed 12 months' base
salary and car allowance, and (ii) reimbursement of premiums paid by Mr.
Robinson for medical, dental and vision insurance coverages during the 12 month
post-employment period. "Cause" is defined as: (i) continued failure to obey
reasonable instructions of the person(s) to whom Mr. Robinson reports; (ii)
continued neglect of duties and responsibilities; (iii) willful misconduct; (iv)
fraud or dishonesty; (v) any action in bad faith that is to our detriment and/or
the detriment of any of our subsidiaries or affiliates; or (vi) failure to
comply with any of the non-compete provisions or our Code of Conduct annexed as
exhibits to the employment agreement. If Mr. Robinson's employment terminates
for any reason at all, voluntarily or involuntarily, benefits provided to him
will terminate as of the last day of employment, unless otherwise specified in
any employee benefit plan or unless otherwise required by law.

If we had terminated Mr. Robinson's employment on June 28, 2008, he would have
received payments in accordance with our regular payroll practices in the amount
of $244,000.

Gerald J. Angeli

Mr. Angeli's employment agreement can be terminated by him or by us for any
reason or no reason upon providing three months' written notice to the other
party. The agreement provides that if the termination is effective before such
notice period expires, we are required to pay Mr. Angeli his base salary and
automobile allowance for the remainder of the notice period. As consideration
for the non-competition covenants set forth in his employment agreement, Mr.
Angeli will receive (i) up to 12 months' base salary and automobile allowance,
payable in accordance with our regular payroll practices, with the combination
of notice and non-compete payments not to exceed 12 months' base salary and
automobile allowance, and (ii) reimbursement of premiums paid by Mr. Robinson
for medical, dental and vision insurance coverages during the 12 month
post-employment period.

On June 24, 2008, we provided Mr. Angeli notice of the termination of his
employment agreement effective July 1, 2008 and he will therefore receive
payments in accordance with our regular payroll practices totaling approximately
$297,000.

If Mr. Angeli's employment terminated for cause, he was not entitled to receive
any severance payment. Under the terms of Mr. Angeli's employment agreement,
"cause" is defined as: (i) continued failure to obey reasonable instructions of
the person(s) to whom Mr. Angeli reports; (ii) continued neglect of duties and
responsibilities; (iii) willful misconduct; (iv) fraud or dishonesty; (v) any
action in bad faith that is to our detriment and/or the detriment of any of our
subsidiaries or affiliates; or (vi) failure to comply with any of the
non-compete provisions or our Code of Conduct annexed as exhibits to the
employment agreement.

Urs W. Stampfli

Under the terms of Mr. Stampfli's employment agreement, if we terminate his
employment at any time without cause, or if Mr. Stampfli terminates his
employment during or after the stated term of his employment agreement
(currently to expire on January 1, 2009), he is entitled to (i) severance
payments equal to 12 months consisting of his then base salary and car allowance
and (ii) reimbursement of premiums paid by Mr. Stampfli for medical, dental and
vision insurance coverages during the 12 month post-employment period. "Cause"
is defined under Mr. Stampfli's employment agreement as: (i) continued failure
to obey reasonable instructions of the person(s) to whom Mr. Stampfli reports;
(ii) continued neglect of duties and responsibilities; (iii) willful misconduct;
(iv) fraud or dishonesty; (v) any action in bad faith which is to our detriment
and/or the detriment of any of our subsidiaries or affiliates; or (vi) failure
to comply with any of the non-compete provisions or our Code of Conduct annexed
as exhibits to the employment agreement.

If we had terminated Mr. Stampfli's employment without cause on June 28, 2008,
he would have received payments in accordance with our regular payroll practices
totaling $296,000.

Scott L. Lampert

Mr. Scott Lampert's employment agreement, as amended to date, can be terminated
by him or by us for any reason or no reason upon providing 30 days written
notice to the other party. The agreement provides that if the termination by us
for any reason other than cause or no reason is effective before such notice
period expires, we are required to pay Mr. Scott Lampert his base salary and car
allowance for the remainder of the notice period. Additionally, if we terminate
Mr. Scott Lampert for any reason other than cause or for no reason, Mr. Scott
Lampert is entitled to receive (i) up to 12 months' base salary and car
allowance, with the combination of notice and severance payments not to exceed
12 months' base salary and car allowance, and (ii) reimbursement of premiums
paid by Mr. Scott Lampert for medical, dental and vision insurance coverages
during the 12 month post-employment period. "Cause" is defined as: (i) continued
failure to obey reasonable instructions of the person(s) to whom Mr. Scott
Lampert reports; (ii) continued neglect of duties and responsibilities; (iii)
willful misconduct; (iv) fraud or dishonesty; (v) any action in bad faith which
is to our detriment and/or the detriment of any of our subsidiaries or
affiliates; or (vi) failure to comply with any of the non-compete provisions or
our Code of Conduct annexed as exhibits to the employment agreement. If Mr.
Scott Lampert's employment terminates for any reason at all, voluntarily or
involuntarily, benefits provided to him will terminate as of the last day of
employment, unless otherwise specified in any employee benefit plan or unless
otherwise required by law.

If we had terminated Mr. Scott Lampert's employment on June 28, 2008 without
cause, he would have received payments in accordance with our regular payroll
practices in the amount of $239,000.

Compensation of Directors

The following table sets forth certain information regarding the compensation of
our directors during Fiscal 2008 (other than Ira B. Lampert, who is omitted from
the table as his compensation information is provided in the summary
compensation table and he does not receive any additional compensation for his
services as a director).

Fiscal 2008 Director Compensation

Change in
Fees Pension Value
Earned and
or Paid Non-Equity Nonqualified
------- Stock Option Incentive Plan Deferred All Other
in Cash Awards Awards Compensation Compensation Compensation Total
Name ($)(1) ($) ($)(2) ($) Earnings ($) ($)
----------------------- ------- ------ ------ -------------- ------------- ------------ ------

Ronald S. Cooper 69,500 -- -- -- -- -- 69,500

Morris H. Gindi 62,000 -- -- -- -- -- 62,000

William J. O'Neill, Jr. 83,000 -- -- -- -- -- 83,000

----------
(1) Reflects the amount of cash compensation earned in Fiscal 2008 for Board
and Committee service.

(2) Each independent director had no stock options outstanding as of the end
of Fiscal 2008.

Retainers and Fees

Directors who are our employees receive no additional compensation for their
services as directors. During Fiscal 2008, each non-employee member of the Board
was paid the following: (i) an annual fee of $15,000 for serving on the Board;
(ii) a $2,500 annual fee for each Board committee on which he served or $3,500
for serving as Chairman, except that the Chairman of the Audit Committee
received $10,000 and the Chairman of the Compensation and Stock Option Committee
received $5,000 in light of the additional duties and responsibilities
associated with chairing those committees; and (iii) $1,000 for each Board or
committee meeting attended whether in person or telephonically.

Annual and meeting fees are paid quarterly in arrears. We reimburse all
reasonable expenses incurred by both employee and non-employee directors in
connection with such meetings. Independent directors do not receive additional
compensation for meeting separately in executive session.

In addition to the aforementioned fees, the Chairman of the Special Committee
receives an annual retainer of $25,000 and each of the other two members of the
Special Committee receives an annual retainer of $15,000. The retainers are paid
quarterly in arrears beginning with the quarter ended September 30, 2006 and
continuing thereafter for as long as the Special Committee remains in existence.
Each member of the Special Committee, which consists of the three independent
directors who serve on the Board, is also paid $1,000 for each meeting of the
Special Committee attended.

Equity Compensation

We do not currently grant options or restricted stock to our directors. Prior to
January 20, 2003, we awarded stock options to each independent director upon
appointment to the Board and upon each anniversary of his appointment pursuant
to the 1993 Incentive Plan. The 1993 Incentive Plan expired on December 1, 2003.
At June 28, 2008, each option granted to our independent directors under the
1993 Incentive Plan had expired.

BENEFICIAL OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of October 27, 2008 about
the beneficial ownership of our common stock by: (i) each person or group who we
know beneficially owns more than 5% of our common stock; (ii) each director;
(iii) each named executive officer; and (iv) all directors and executive
officers as a group.

Amount and Nature of
Beneficial Percent of
Name of Beneficial Owner Ownership(1) Class(1)
----------------------------------------------------------------- -------------------- ----------

(i) Beneficial Owners of More Than 5% of the Common Stock

MT Trading LLC, Roger Beit, Sondra Beit, RH Trading LLC and 1,371,142(2) 23.2%
LTC Racing LLC as a group
c/o MT Trading LLC 530 Silas Deane Highway,
Suite 130 Wethersfield, CT 06109

MT Trading LLC 1,104,414(2) 18.7%
530 Silas Deane Highway, Suite 130
Wethersfield, CT 06109

Dimensional Fund Advisors Inc. 490,899(3) 8.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401

Everest Special Situations Fund, L.P. 431,015(4) 7.3%
Platinum House, 21 Ha' arba'a Street
Tel Aviv, Israel 64739

Daniel Zeff 496,494(5) 8.4%
50 California Street, Suite 1500
San Francisco, CA 94111

(ii) Directors

Ira B. Lampert 585,641(6) 9.8%

Ronald S. Cooper 2,600(7) *

Morris H. Gindi 3,000(8) *

William J. O'Neill, Jr. -- *

Roger J. Beit 1,371,142(2) 23.2%

(iii) Named Executive Officers

Scott L. Lampert 3,460(9) *

Blaine A. Robinson 3,600(9) *

Urs W. Stampfli 3,733(9) *

Gerald J. Angeli -- *

(iv) Directors and executive officers as a group 8 persons)((10)) 1,973,176 33.4%

----------
* Indicates less than one percent (1%).

(1) For purposes of this table, beneficial ownership was determined in
accordance with Rule 13d-3 under the Exchange Act, based upon information
furnished by the persons listed or contained in filings made by them with
the Commission; the inclusion of shares as beneficially owned should not
be construed as an admission that such shares are beneficially owned for
purposes of Section 16 of the Exchange Act. As of October 27, 2008, we had
5,913,610 shares of common stock issued and outstanding. All shares were
owned directly with sole voting and investment power unless otherwise
indicated.

(2) Based on information contained in a Form 4 filed with the Commission on
November 17, 2005 by MT Trading LLC as to its beneficial ownership at
November 16, 2005, a Form 4 filed with the Commission on November 14, 2005
by LTC Racing LLC as to its beneficial ownership at November 10, 2005, a
Form 4 filed with the Commission on October 27, 2005 by RH Trading LLC as
to its beneficial ownership at October 25, 2005, a Form 4 filed with the
Commission on September 1, 2005 by Sondra Jay Beit as to her beneficial
ownership at August 31, 2005, and additional discussions between us and MT
Trading LLC. The 1,104,414 shares of Common Stock beneficially owned by MT
Trading LLC at November 16, 2005 constitute the majority of the 1,371,142
shares beneficially owned by MT Trading LLC and the other members of the
group listed first in this footnote. Director Roger Beit, the husband of
Sondra Beit, is the authorized spokesperson and representative of MT
Trading LLC, Sondra Beit, RH Trading LLC and LTC Racing LLC and has
investment authority over the investment account in which such shares are
held. Therefore, Mr. Beit may be deemed to hold voting and dispositive
power with respect to all shares of common stock held by each of the
persons referred to in this footnote. Mr. Beit disclaims beneficial
ownership of securities held by these persons except to the extent of his
pecuniary interest therein.

(3) Based on a Schedule 13G/A filed with the Commission on February 6, 2008 by
Dimensional Fund Advisors Inc. as to its beneficial ownership at December
31, 2007.

(4) Based on information contained in a Schedule 13D filed with the Commission
on September 11, 2008 by Everest Special Situations Fund, L.P. as to its
beneficial ownership at September 11, 2008.

(5) Based on information contained in a Schedule 13D/A filed with the
Commission on May 27, 2008 by Daniel Zeff as to his beneficial ownership
at May 23, 2008.

(6) Represents: (i) 52,600 shares that may be acquired pursuant to stock
options exercisable within 60 days after October 27, 2008; (ii) 527,441
shares owned, as to all of which Mr. Lampert has sole dispositive power;
and (iii) 5,600 shares held by a ss.501(c)(3) charitable trust of which
Mr. Lampert is a trustee with voting and dispositive power.

(7) Includes 2,600 shares, as to all of which Mr. Cooper has sole dispositive
power.

(8) Includes 3,000 shares held by the Notra Trading Inc. Profit Sharing Plan &
Trust, a retirement plan of which Mr. Gindi is a co-trustee and
participant.

(9) Represents shares that may be acquired pursuant to stock options
exercisable within 60 days after October 27, 2008.

(10) The group is comprised of Messrs. Ira B. Lampert, Cooper, Gindi, O'Neill,
Beit, Robinson, Scott Lampert, Stampfli and Angeli.

Fiscal Year-End Equity Compensation Plan Information

The following table sets forth aggregated information concerning our equity
compensation plans outstanding at June 28, 2008.

-----------------------------------------------------------------------------------------------------------------------
Number of Securities
Number of Securities Remaining Available for
to be Issued upon Future Issuance Under
Exercise of Equity Compensation Plans
Outstanding Options, Weighted-Average Exercise (excluding shares
Warrants and Rights Price of Outstanding reflected in the 1st
Outstanding at FY Options, Warrants and column)
Plan Category End (#) Rights
-----------------------------------------------------------------------------------------------------------------------

Equity Compensation Plans
-----------------------------------------------------------------------------------------------------------------------
Approved by Shareholders 86,407 $26.40 --
-----------------------------------------------------------------------------------------------------------------------
Equity Compensation Plans
-----------------------------------------------------------------------------------------------------------------------
Not Approved by Shareholders 53,277 $22.91 206,757
-----------------------------------------------------------------------------------------------------------------------
Total 139,684 $25.07 206,757
-----------------------------------------------------------------------------------------------------------------------

At June 28, 2008, we had a total of seven compensation plans under which shares
of our common stock were authorized for issuance that were adopted without
shareholder approval: (i) the 2002 Incentive Plan for Non-Officer Employees, New
Recruits and Consultants (the "First 2002 Incentive Plan") and the 2002
Incentive Plan for New Recruits (the "Second 2002 Incentive Plan"; collectively
with the First 2002 Incentive Plan, the "2002 Plans"); and (ii) five individual
stock option plans, four of which were issued to employees (two of whom are
executive officers) as an inducement to their employment with us and one (1) of
which was issued to a consultant as a retention inducement. None of the options
issued under any of these plans qualifies as an incentive stock option for
federal tax purposes.

At June 28, 2008, 99,600 and 100,000 shares of our common stock were reserved
for issuance pursuant to outstanding options granted under and options available
for grant under the First 2002 Incentive Plan and the Second 2002 Incentive
Plan, respectively. New recruits (including officers), non-officer employees and
consultants in our service are eligible to participate in the First 2002
Incentive Plan. Only new recruits (including officers) are eligible to
participate in the

Second 2002 Incentive Plan. The 2002 Plans generally provide for the granting of
stock, stock options, stock appreciation rights, restricted shares or any
combination of the foregoing to eligible participants. Shares subject to any
outstanding options under each of these plans which expire or otherwise
terminate prior to exercise will be available for subsequent issuance under the
plan. Except as otherwise required by law or the plan, the Compensation and
Stock Option Committee or the Board determine which eligible individuals are to
receive option grants, the number of shares subject to each such grant, the
vesting schedule for the option grant, the maximum term for which any granted
option is to remain outstanding, and the exercise price. The exercise price may
not be less than the fair market value of the option shares on the grant date.

At June 28, 2008, 30,217 shares of our common stock in the aggregate were
reserved for issuance under individual stock option plans that were issued to
employees (two of whom are executive officers) as an inducement to their
becoming employed by us, and to a consultant as an inducement for his continued
services, or were subsequently received by the employee or consultant, in
exchange for their inducement option, in connection with a stock option
repricing program. These plans were adopted for inducement of new employees and
consultants and have substantially the same terms and conditions as options
issued under the 2002 Plans. These stock options generally vest in three annual
installments beginning on the first anniversary of the employee's start date or
the grant date, have an exercise price equal to the closing price of the Common
Stock on the date of grant, and expire ten years after the grant date. For those
stock options that were received in exchange for the person's inducement option,
the vesting schedule and expiration date of the inducement option were carried
forward into the person's repriced stock option. The consultant's stock option
began vesting on the date of grant, continued vesting in annual installments and
became vested in full on April 24, 2004 since the consultant continued to make
his services available to us.

PROPOSAL THREE:

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

BDO Seidman, LLP ("BDO Seidman"), an independent registered public accounting
firm, was appointed by the Audit Committee to audit our financial statements for
Fiscal 2009. We expect that a representative of BDO Seidman will attend the
Annual Meeting, will have an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.

The following table presents fees for professional audit services provided by
BDO Seidman for the audit of our annual financial statements during Fiscal 2008
and Fiscal 2007 (in thousands):

FY 2008 FY 2007
------- -------
Audit Fees $302 $453
Audit Related Fees 31 --
Tax Fees -- --
All Other Fees -- --
-------------- ---- ----
Total $333 $453
==== ====

Audit Fees includes fees for services rendered for the audit of our annual
consolidated financial statements, the review of financial statements included
in our quarterly reports on Form 10-Q, and consents and other services normally
provided in connection with statutory and regulatory filings or engagements for
those fiscal years.

Audit-Related Fees would principally include fees for due diligence in
connection with potential transactions and accounting consultations.

Tax Fees would include fees for services rendered for tax compliance, tax advice
and tax planning. We obtain these types of services from a professional services
firm other than BDO Seidman.

All Other Fees would include fees for all other services rendered to us that do
not constitute Audit Fees, Audit-Related Fees or Tax Fees.

In considering the nature of the services provided by BDO Seidman, the Audit
Committee determined that such services are compatible with the provision of
independent audit services. The Audit Committee discussed these services with
BDO Seidman and management to determine that they are permitted under the rules
and regulations concerning auditor independence promulgated by the Commission to
implement the Sarbanes-Oxley Act of 2002, as well as the American Institute of
Certified Public Accountants.

Approval Policy

All services rendered by our independent auditors are pre-approved by the Audit
Committee in accordance with our Audit and Non-Audit Pre-Approval Policy for
independent auditor services and are monitored both as to spending level and
work content by the Audit Committee to maintain the appropriate objectivity and
independence of the core service of the independent registered public accounting
firm, which is the audit of our consolidated financial statements. Under the
policy, the terms and fees of annual audit services, and any changes thereto,
must be approved by the Audit Committee.

The policy also sets forth detailed pre-approved categories of other audit,
audit-related and other non-audit services that may be performed by our
independent auditors during the fiscal year, subject to the dollar limitations
set by the Audit Committee. The Audit Committee may, in accordance with the
policy, delegate to any of its members the authority to approve audit and
non-audit services to be performed by the independent auditors. Any Audit
Committee member who exercises this delegated authority must report any approval
decisions to the Audit Committee at its next scheduled meeting. The foregoing
pre-approval requirements are subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act that are approved
by the Audit Committee prior to completion of the audit.

The Board is seeking shareholder ratification of its selection of BDO Seidman.
If shareholders do not ratify the appointment of BDO Seidman as our independent
registered public accounting firm for Fiscal 2009 at the annual meeting, the
Audit Committee may reconsider the selection.

Our Board recommends a vote FOR the ratification of the appointment of BDO
Seidman as our independent registered public accounting firm for Fiscal 2009.
Ratification of the appointment of BDO Seidman as our independent registered
public accounting firm for Fiscal 2009 requires the affirmative vote of a
majority of the votes cast by the holders of shares present or represented and
entitled to vote at the annual meeting.

OTHER INFORMATION

Shareholder Proposals for the 2009 Annual Meeting

Pursuant to Rule 14a-8 under the Exchange Act, our shareholders may present
proper proposals for inclusion in our proxy statement and form of proxy and for
consideration at the next annual meeting by submitting their proposals to us in
a timely manner. Any shareholder of the Company who wishes to present a proposal
for inclusion in the proxy statement and form of proxy for action at the 2009
Annual Meeting of Shareholders must comply with our By-Laws and the rules and
regulations of the Commission, each as then in effect. Such proposals must be
mailed to us at our offices at 4000 Hollywood Boulevard, Presidential Circle -
6th Floor, North Tower, Hollywood, Florida 33021, attention: Secretary. Under
the rules of the Commission, any shareholder proposal intended to be presented
at the 2009 Annual Meeting of Shareholders must be received no later than June
30, 2009 in order to be considered for inclusion in our proxy statement and form
of proxy relating to such meeting. If a shareholder notifies us of an intent to
present a proposal at the 2009 Annual Meeting of Shareholders at any time after
September 13, 2009 (and for any reason the proposal is voted on at that
meeting), it will be considered untimely and our proxy holders will have the
right to exercise discretionary voting authority with respect to the proposal,
if presented at the meeting, without including information regarding the
proposal in our proxy materials.

Proxy Solicitation

In addition to solicitation by mail, the directors and employees of the Company
may solicit proxies from shareholders by telephone or other electronic means or
in person. Any director or employee of the Company who solicits proxies will not
receive additional compensation for such services. We do not expect that
specially engaged paid solicitors will solicit proxies. Although we might use
such solicitors if we deem them necessary, we have not made arrangements or
contracts with any such solicitors as of the date of this Proxy Statement.

Expenses of Solicitation

We will bear the cost of this proxy solicitation. In addition to the use of the
mails, some of our regular employees, without additional remuneration, may
solicit proxies personally or by telephone or facsimile. We will reimburse
brokers, dealers, banks, and other custodians, nominees and fiduciaries for
their reasonable expenses in forwarding solicitation materials to beneficial
owners of our common stock.

Other Business

As of the date of this proxy statement, our Board knows of no business to be
presented at the Annual Meeting other than as set forth in this proxy statement.
If other matters properly come before the Annual Meeting, or any of its
adjournments, the persons named as proxies will vote on such matters in their
discretion.

ANNEX A
PLAN OF DISSOLUTION AND LIQUIDATION

This Plan of Dissolution and Liquidation (the "Plan") is intended to
accomplish the dissolution and complete liquidation of Concord Camera Corp., a
New Jersey corporation (the "Company"), in accordance with Section 14A:12-4 and
other applicable provisions of the Business Corporation Act of New Jersey
("BCANJ") and in accordance with Sections 331 and 336 of the Internal Revenue
Code of 1986, as amended (the "Code").

1. Approval and Adoption of Plan.

This Plan shall be effective when all of the following steps have been
completed:

(a) The Company's Board of Directors (the "Board") shall have
adopted a resolution or resolutions with respect to the following:

(i) Dissolution and Complete Liquidation: The Board shall
determine that it is deemed advisable for the Company to be dissolved and
liquidated completely.

(ii) Adoption of the Plan: The Board shall approve this Plan
as the appropriate means for carrying out the dissolution and complete
liquidation of the Company.

(iii) Sale of Assets and Distributions: The Board shall
determine that, as part of the Plan, it is deemed expedient and in the best
interests of the Company to sell and monetize all or substantially all of the
Company's non-cash assets, satisfy, discharge and/or otherwise resolve the
Company's debts and other liabilities and distribute any remaining proceeds to
the Company's shareholders, as appropriate.

(b) Adoption of this Plan by the Company's Shareholders. The
majority of the votes cast by holders of shares of common stock of the Company,
no par value (the "Common Stock"), entitled to vote shall have approved and
adopted this Plan, including the dissolution of the Company and those provisions
authorizing the Board to sell all or substantially all of the Company's non-cash
assets, at the annual meeting of the shareholders of the Company or at a special
meeting of the shareholders of the Company called for such purpose by the Board.

2. Dissolution and Liquidation Period.

(a) Once the Plan is effective, the steps set forth below shall be
completed at such times as the Board, in its absolute discretion, deems
necessary, appropriate or advisable. Without limiting the generality of the
foregoing, the Board may direct the officers of the Company to proceed with the
following steps to effect the dissolution and liquidation of the Company or may
instruct the officers of the Company to delay the taking of any of the following
steps until the Company has performed such actions as the Board or such officers
determine to be necessary, appropriate or advisable for the Company to maximize
the value of the Company's assets upon liquidation; provided that such steps may
not be delayed longer than is permitted by applicable law.

A-1

(i) The filing of a Certificate of Dissolution of the Company
(the "Certificate of Dissolution") pursuant to Section 14A:12-4 of the BCANJ,
specifying the date (no later than ninety (90) days after the filing) upon which
the Certificate of Dissolution will become effective (the "Effective Date"), and
the completion of all actions that may be necessary, appropriate or desirable to
dissolve and terminate the corporate existence of the Company;

(ii) The cessation of all of the Company's business activities
and the withdrawal of the Company from any jurisdiction in which it is qualified
to do business, except and insofar as necessary for the sale of its non-cash
assets and for the proper winding up of the Company pursuant to Section 14A:12-9
of the BCANJ;

(iii) The negotiation and consummation of sales of all of the
non-cash assets and properties of the Company, including the assumption by the
purchaser or purchasers of any or all liabilities of the Company, insofar as the
Board or the officers of the Company deem such sales to be necessary,
appropriate or advisable;

(iv) The creation of a contingency reserve in such amount as
the Board determines to be necessary, appropriate or advisable, for settlement
and payment of liabilities, claims and obligations, including contingent
liabilities, of the Company and expenses of the dissolution and liquidation. If
there are insufficient assets to pay all liabilities, claims and obligations in
full, liabilities, claims and obligations shall be paid or provided for
according to their priority, and among liabilities, claims and obligations of
equal priority, ratably to the extent of assets legally available therefore.

(v) The distribution of the remaining funds of the Company and
the distribution of remaining unsold non-cash assets of the Company, if any and
if practicable, to its shareholders.

(b) If the Board determines to follow the procedures described in
Section 14A:12-12 of the BCANJ, then the additional steps set forth below shall,
to the extent necessary or appropriate, be taken:

(i) The giving of notice of the dissolution to all persons
having a claim against the Company pursuant to Section 14A:12-12 of the BCANJ;
and the rejection of any such claims in accordance with Section 14A:12-14 of the
BCANJ; or

(ii) The rejection of any such claims in accordance with
Section 14A:12-14 and the payment, or the making of adequate provision for
payment, of all such claims made against the Company and not rejected.

(c) Notwithstanding the foregoing, the Company shall not be required
to follow the procedures described in Section 14A:12-12 of the BCANJ, and the
adoption of the Plan by the Company's shareholders shall constitute full and
complete authority for the Board and the officers of the Company, without
further shareholder action, to proceed with the dissolution and liquidation of
the Company in accordance with any applicable provision of the BCANJ.

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3. Authority of Officers and Directors After the Effective Date.

(a) The Board and the officers of the Company shall continue in
their positions for the purpose of winding up the affairs of the Company as
contemplated by New Jersey law. The Board may appoint officers and either the
Board or the officers of the Company may hire employees and retain independent
contractors in connection with the winding up process. The Board is authorized
to pay to the Company's officers, directors and employees, or any of them,
compensation or additional compensation above their regular compensation, in
money or other property, in recognition of the extraordinary efforts they, or
any of them, will be required to undertake, or actually undertake, in connection
with the successful implementation of this Plan.

(b) Adoption of this Plan by holders of shares of Common Stock, as
provided in Section 1(b) of this Plan, shall constitute the approval by the
Company's shareholders of the Board's authorization of the payment of any such
compensation.

(c) The adoption of the Plan by the Company's shareholders shall
constitute full and complete authority for the Board and the officers of the
Company, without further shareholder action (except as otherwise required by
mandatory provisions of New Jersey law, including Section 14A:12-9(2)(d) of the
BCANJ), to do and perform any and all acts and to make, execute and deliver any
and all agreements, conveyances, assignments, transfers, certificates and other
documents of any kind and character which the Board or such officers deem
necessary, appropriate or advisable: (i) to sell, dispose, convey, transfer and
deliver the assets of the Company, whether before or after the Effective Date,
(ii) to satisfy, settle or provide for the satisfaction or settlement of the
Company's liabilities, claims and obligations, including contingent liabilities,
in accordance with the BCANJ, (iii) to distribute all of the remaining funds of
the Company and any unsold non-cash assets of the Company to the Company's
shareholders, and (iv) to dissolve the Company in accordance with the laws of
the State of New Jersey and cause its withdrawal from all jurisdictions in which
it is authorized to do business.

4. Conversion of Non-Cash Assets Into Cash or other Distributable Form.

Subject to approval by the Board, the officers, employees and agents of
the Company, shall, as promptly as feasible and whether before or after the
Effective Date, proceed to collect all sums due or owing to the Company, to sell
and convert into cash any and all corporate non-cash assets and, out of the
assets of the Company, to satisfy, settle and pay or otherwise resolve or make
adequate provision for the satisfaction, settlement and payment or resolution of
all debts, liabilities, claims and obligations of the Company pursuant to
Section 2 above, including all expenses of the sale of non-cash assets and of
the dissolution and liquidation provided for by the Plan.

5. Contingency Reserve.

It is specifically contemplated that the Board may establish a contingency
reserve of such amount as the Board or officers of the Company determine to be
necessary, appropriate or advisable ("Contingency Reserve"), for the settlement
and payment of liabilities, claims and obligations, including contingent
liabilities, of the Company and expenses in connection with

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completion of the Plan. If any of the money set aside in the Contingency Reserve
is not ultimately required for the settlement and payment of liabilities, claims
and obligations, including contingent liabilities, of the Company and expenses
in connection with completion of the Plan, the Company may, in the absolute
discretion of the Board, either make a second distribution to its shareholders
of the unused portion of such money or donate the unused portion of the money to
a charitable organization if such unused portion is determined to be, at the
sole discretion of the Board, de minimis.

6. Professional Fees and Expenses.

(a) It is specifically contemplated that the Board or the officers
of the Company may authorize the payment of retainer fees to law firms,
accounting firms, auditing firms, tax advisors and other professionals and
consultants selected by the Board for fees and expenses of the Company,
including, among other things, to cover any costs payable pursuant to the
indemnification of the Company's officers or members of the Board provided by
the Company pursuant to its Certificate of Incorporation, the BCANJ or
otherwise.

(b) In addition, in connection with and for the purpose of
implementing and assuring completion of this Plan, the Company may, in the
absolute discretion of the Board or the officers of the Company, pay any
brokerage, agency and other fees and expenses of persons rendering services to
the Company in connection with the collection, sale, exchange or other
disposition of the Company's property and assets and the implementation of this
Plan.

7. Indemnification.

The Company shall continue to indemnify its officers, directors, employees
and agents in accordance with its Certificate of Incorporation and any
contractual arrangements, for actions taken prior to and after the Effective
Date, in connection with this Plan and the winding up of the affairs of the
Company. The Board, in its absolute discretion, is authorized to obtain and
maintain insurance, including, without limitation, directors and officers
liability insurance, as may be necessary, appropriate or advisable to cover the
Company's obligations hereunder.

8. Liquidating Trust.

The Board may but is not required to establish a Liquidating Trust (the
"Liquidating Trust") and distribute assets of the Company to the Liquidating
Trust. The Liquidating Trust may be established by agreement with one or more
Trustees selected by the Board. If the Liquidating Trust is established by
agreement with one or more Trustees, the trust agreement establishing and
governing the Liquidating Trust shall be in form and substance determined by the
Board. The Trustees shall in general be authorized to take charge of the
Company's property, and to sell and convert into cash any and all corporate
non-cash assets and collect the debts and property due and belonging to the
Company, with power to prosecute and defend, in the name of the Company, or
otherwise, all such suits as may be necessary or proper for the foregoing
purposes, and to appoint an agent under it and to do all other acts which might
be done by the Company that may be necessary, appropriate or advisable for the
final settlement of the unfinished business of the Company.

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9. Liquidating Distributions.

(a) Liquidating distributions, in cash or in kind, shall be made
after the adoption of the Plan by the shareholders, and after the filing of a
Certificate of Dissolution of the Company as provided in Section 2 above, at
such time or times as the Board deems appropriate, to the Company's
shareholders, pro rata in accordance with the respective number of shares then
held of record; provided that in the opinion of the Board adequate provision has
been made for the satisfaction, settlement and payment or resolution of all
known, unascertained or contingent debts, obligations, claims and liabilities of
the Company (including costs and expenses incurred and anticipated to be
incurred in connection with the sale of non-cash assets and complete liquidation
of the Company). All determinations as to the time for and the amount and kind
of distributions to shareholders shall be made in the exercise of the absolute
discretion of the Board and in accordance with Section 14A:12-16 of the BCANJ.

(b) Any assets distributable to any creditor or shareholder of the
Company who is unknown or cannot be found, or who is under a disability and for
whom there is no legal representative, shall escheat to the applicable state or
be treated as abandoned property pursuant to applicable state law.

10. Amendment, Modification or Abandonment of Plan.

If for any reason the Company's Board determines that such action would be
in the best interests of the Company, it may amend, modify or abandon the Plan
and all action contemplated thereunder, notwithstanding shareholder approval,
without additional shareholder approval, prior to the filing of the Certificate
of Dissolution, or at any time after the filing of the Certificate of
Dissolution, to the extent permitted by the BCANJ; provided, however, that the
Company will not amend or modify the Plan under circumstances that would require
additional shareholder approval under the BCANJ and the federal securities laws
without complying with the BCANJ and the federal securities laws. Upon the
abandonment of the Plan, the Plan shall be void.

11. Cancellation of Stock and Stock Certificates.

(a) After known liabilities of the Company have been paid to the
full extent possible, and the remaining assets of the Company have been
distributed to the shareholders, the shareholders shall surrender any and all
certificates representing the stock of the Company and shall have no further
rights against the Company, whether arising out of each shareholder's status as
a shareholder or as a creditor of the Company.

(b) Following the filing of a Certificate of Dissolution of the
Company, the Company's share transfer books shall be closed and the Company's
capital stock and stock certificates evidencing the Company's capital stock will
be treated as no longer being outstanding.

12. Liquidation under Section 331 and 336.

It is intended that this Plan shall be a plan of complete liquidation
within the terms of Sections 331 and 336 of the Code. The Plan shall be deemed
to authorize such action as, in the

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opinion of counsel for the Company, may be necessary to conform with the
provisions of said Sections 331 and 336.

13. Filing of Tax Forms.

The appropriate officer of the Company is authorized and directed, within
thirty (30) days after the effective date of the Plan, to execute and file a
United States Treasury Form 966 pursuant to Section 6043 of the Code and such
additional forms and reports with the Internal Revenue Service as may be
appropriate in connection with this Plan and the carrying out thereof.

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