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The following is an excerpt from a DEF 14A SEC Filing, filed by BARNEYS NEW YORK INC on 5/4/2001.
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BARNEYS NEW YORK INC - DEF 14A - 20010504 - COMPENSATION_COMMITTEE

COMPENSATION COMMITTEE REPORT

The Compensation Committee is responsible for establishing and reviewing the salaries, compensation plans and other remuneration of the officers of the Company. The principal objectives of the Company's executive compensation are to
(i) compensate competitively its executive officers, (ii) attract and retain individuals important to the success of the Company, (iii) provide incentives that will motivate those executives and (iv) reward the Company's executives for achieving the business objectives of the Company over both the short and long terms.

In each fiscal year, the Committee considers the recommendations of the Chief Executive Officer, which is supported by data generated by the Company's Human Resources Department for each component of compensation of the Company's executive officers. The Committee reviews those recommendations and then approves them or makes such modifications as it deems appropriate.

Compensation Philosophy: The Company's compensation program applicable to all the executive officers is based on three primary elements:

o Base salary compensation
o Annual bonus incentive compensation
o Long term incentive compensation

The Company's executives receive no other form of compensation other than customary benefits.

Base Salary Compensation: The base salaries for the executive officers are determined based upon the responsibilities of the position, the experience level of the individual and the competitive conditions within the industry. The Company and the Compensation Committee consider the compensation paid to executive officers of comparable companies in the retail industry. When adjusting those salaries for individual executive officers in 2001, the Compensation Committee considered the financial performance of the Company in 2000, the performance of the individual executive officer, any changed duties and responsibilities and the base salaries paid to individuals in comparable positions in other retail companies.

Annual Bonus Incentive Compensation: The Compensation Committee and the Board of Directors approved the 2001 Employee Bonus Plan in which all executive officers other than the CEO are participants. The plan provides for a maximum bonus based on a percentage of an individual's salary reflecting his or her level within the Company. The amount of that maximum bonus payable to each participant is based on satisfaction of a combination of company and individual or business unit performance criteria.

Long Term Incentive Compensation: Both the Company's management and the Compensation Committee believe that significant stock ownership in the Company links the economic interest of stockholders and management and, therefore, is a major incentive for management. The Company's long term incentive plan is designed to provide the recipient with a proprietary interest in the growth and performance of the Company and the value of its shares. The Compensation Committee recommends grants of stock options to executive officers in accordance with the terms of the Employee Stock Option Plan. Those terms are discussed below in this Proxy Statement. All executive officers are participants in the Employee Stock Option Plan. The participants in the Employee Stock Option Plan and the level of participation are determined by the Compensation Committee, consisting of David Strumwasser, Robert Tarr, Jr. and Douglas Teitelbaum. The terms of Mr. Socol's participation in the Employee Stock Option Plan are also governed by his Employment Agreement.

CEO Compensation: Mr. Socol was elected Chairman, President and Chief Executive Officer of the Company in January 2001. The terms of his employment agreement are discussed in the Executive Compensation section of this Proxy Statement. The Compensation Committee believes that the compensation provided in that agreement is comparable in value to the prevailing competitive marketplace for companies similarly situated.

Section 162(m) of the Internal Revenue Code of 1986 (the "Code") limits a publicly-held corporation's deduction for compensation paid to certain executive officers in excess of $1 million per executive per taxable year, unless the

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compensation qualifies as "performance based" compensation. The Company believes that the options granted under the Employee Stock Option Plan at a time when the Compensation Committee consists only of outside directors (within the meaning of
Section 162(m) of the Code) should qualify for this exemption. As of today, annual cash compensation to be received by any executive officer, other than Mr. Socol, has been far below the $1 million threshold. With respect to the stock options granted to Mr. Socol and discussed below in Agreements With Executive Officers, the Company is seeking the requisite stockholder approval for purposes of Section 162(m) and once such approval is obtained, the Company believes these options will qualify for the exemption under 162(m).

COMPENSATION COMMITTEE

David Strumwasser
Robert J. Tarr, Jr.
Douglas Teitelbaum

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