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Based on the facts and circumstances of this case; our
understanding of the importance of Mr. Beiner’s
contribution to the very existence and success of the
business; our analysis of compensation paid to chief
executives in other comparable companies; the financial
performance of Beiner, Inc., during the years in
question as compared to the financial performance of
other similar wholesaler distributors; and our
knowledge, judgment and experience in executive
compensation, it is my opinion that Mr. Beiner’s
reasonable compensation for the year ending
December 31, 1999 was $906,740 and that his reasonable
compensation for the year ending December 31, 2000 was
$1,533,093.
The relevant standard industrial classification (SIC) codes
5063 and 5065 include every (34 in total) publicly held wholesale
distributor of electrical or electronic parts and components that
filed reports with the Securities and Exchange Commission (SEC)
during 1999 and 2000. In reaching his opinion, Wertlieb reviewed
the financial statements of each of these companies and noted
their sales, pretax income, and chief executive officer
compensation. He broke that compensation into two parts. The
first part, “fixed compensation”, included annual salary and the
value of any special benefits reported as “other compensation” in
the company*s SEC filings. The second part, “variable
compensation”, included annual bonuses contingent on company
profits and the value of any stock awards or longterm incentive
payouts made during the year. The fixed compensation paid by the
34 companies ranged from $70,123 to $1,439,676 and averaged
$399,426. The variable compensation paid by the 34 companies
ranged from zero to approximately $3.4 million. The relationship
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