BSHI Boss Holdings Inc (PK)

      The philosophy of the Committee relating to executive compensation is that the executive officers should be compensated in amounts and in a manner designed to (i) attract, motivate and retain talented executives who are capable of attaining the Company’s goals in a competitive and changing environment, (ii) encourage and reward superior performance, and (iii) strengthen the relationship between executive pay and shareholder value. For certain matters, the Committee periodically has retained management and benefits consultants, to provide advice on the type and amount of compensation to be paid to executive officers and concerning the Company’s equity compensation plans, but the Committee does not delegate its decision-making authority to such consultants.

      The Company’s Fiscal 2008 and current total compensation programs for executive officers consist of both cash and stock-based compensation. Salary levels for Company executives are reviewed and may be adjusted annually. In determining appropriate salaries, the Committee considers the CEO’s recommendations as to compensation for other officers, the scope of responsibility and individual performance for each officer, overall corporate performance, and general pay practices of industry competitors and other companies similarly situated to the Company. The members of the Committee have strong backgrounds in the regulation and management of both private and publicly held companies and use their experience to help evaluate the Company’s executive pay practices. Evaluation of corporate performance takes into account special circumstances such as weather variations, competitive conditions and unusual events which can have a material effect on the Company’s operating results compared with budgeted levels. The Committee’s analysis is a subjective process that utilizes no specific weighting or formula for these factors in determining salary amounts.

      Non-equity incentive plan compensation for each of Messrs. Bern, Brizz and Donze for the years reported was set by an annual individual executive incentive plan specific to the named executive. Mr. Bern’s incentive amounts were determined based on the Company’s consolidated earnings before taxes and he earned such incentive compensation as a percentage of consolidated earnings for the full year. Earnings before taxes must exceed a predetermined hurdle amount before any amounts are payable. Percentages increase on a sliding scale as Company earnings increase. The hurdle amounts, percentages and payment terms for Mr. Bern are established by the Compensation Committee of the Board in its discretion after review and recommendation by the Company’s chief executive officer. Similarly, non-equity incentive compensation for Mr. Brizz and Mr. Donze is determined based upon profitability of their respective subsidiaries for the year in question. Their goals, hurdles and percentage amounts also are reset annually. Mr. Bern’s incentive compensation for Fiscal 2008 is payable in two equal installments, one in March, 2009 and the other in March, 2010, with the 2010 installment dependent upon his continued service to the Company and the Company’s continued profitability in Fiscal 2009.

      Stock-based compensation for executive officers is provided under equity compensation plans approved by the Company’s shareholders. Under these plans, the stock-based compensation awarded and vesting periods are decided at the discretion of the Committee. The Committee has not utilized any specific formula for determining stock-based compensation. All stock-based compensation provided by the Company to date has been in the form of stock options, but under the Company’s 2004 Stock Plan the Committee has the flexibility to utilize restricted stock grants and/or SAR’s if it so determines. Any such grants and their timing are made by the Committee in its discretion.

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      In determining the total compensation package for the CEO for Fiscal 2008, the Committee determined in its discretion to utilize strictly cash compensation. Reimbursement of certain expenses incurred by Mr. Graziadio and a company affiliated with Mr. Graziadio in connection with the Company’s business is discussed below in the section titled “Certain Relationships and Related Transactions.”

      Due to its relatively small size, the Company currently does not have any defined benefit retirement or pension programs for its executive officers. As the Company matures, such programs could be considered on an as needed basis in order to attract and retain senior management. Accordingly, the Committee’s decisions regarding the provision of equity-based compensation currently is not impacted by consideration of other retirement or pension benefits to which the executive officer may be entitled. The Company currently does not have any contracts in place with executive officers that could result in the payment of compensation as a result of termination or a change-in-control. Although the Company encourages equity ownership by management, it does not have any program or policy requiring any particular form or amount of equity ownership. The Committee has not engaged in any benchmarking of total compensation for management as it is not aware of any similarly-sized, publicly-held, industry competitors in the gloves, boots and rainwear segment.

Equity Compensation Plans

      The Company has adopted and maintains its 1998 Incentive Stock Option Plan (the “1998 Employee Plan”) under which the Company issued qualified or non-qualified stock options to employees, consultants and other key persons and its 1998 Non-Employee Director Stock Option Plan (“1998 Director Plan”). Options granted to the named executives prior to 2005 were granted under the 1998 Employee Plan or the 1998 Director Plan. The Company also has adopted its 2004 Stock Incentive Plan for employees, directors and consultants (“2004 Stock Plan”). Under the 2004 Stock Plan, the Company may issue long-term incentive compensation in the form of stock options, performance-based awards, stock appreciation rights (“SAR’s”) and/or restricted stock units to eligible persons. The Company has no SAR’s outstanding. There were no grants of options or other equity-based compensation to executive officers under any plans during Fiscal 2008. The Company does not maintain any retirement or pension benefit plans for its executives, other than tax-qualified defined contribution plans and a non-qualified deferred compensation plan.

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The following table sets forth information concerning outstanding unexercised options and other equity plan awards as of December 27, 2008:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2008

	Option Awards	Stock
		Awards
			Equity
			Incentive
			Plan
	Number of	Number of	Awards:
	Securities	Securities	Number of
	Underlying	Underlying	Securities
	Unexercised	Unexercised	Underlying
	Options	Options	Unexercised	Option	Option
	(#)	(#)	Unearned	Exercise	Expiration
Name	Exercisable	Unexercisable	Options (#)	Price	Date
G. Louis Graziadio III	30,000	-0-	-0-	1.75	3/09/2009	None
	100,000	-0-	-0-	1.90	3/27/2012
	4,500	-0-	-0-	7.00	3/31/2014
	30,000	-0-	-0-	7.50	3/31/2015
Richard Bern	5,000	-0-	-0-	3.75	12/27/2012	None
	5,000	-0-	-0-	3.20	3/17/2013
	10,000	-0-	-0-	7.00	3/31/2014
James F. Sanders	6,000	-0-	-0-	1.75	3/09/2009	None
	4,000	-0-	-0-	3.625	12/31/2009
	10,000	-0-	-0-	7.50	3/14/2015

Director Compensation

      During Fiscal 2008, each of the Company’s non-employee directors earned an annual stipend of $15,000 and quarterly directors’ fees of $2,000. In addition, the Company pays non-employee directors $1,200 per special Board meeting attended (i.e., non-regularly scheduled meeting) or for more than four regular board meetings per year. During Fiscal 2008, Committee members received compensation of $1,000 per committee meeting attended. The total cash compensation paid to all non-employee directors during Fiscal 2008 was $102,000. The Company also may reimburse its directors for reasonable expenses incurred in connection with attending Board and committee meetings. Employee directors are not separately compensated for their service as a director.

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2008 DIRECTOR COMPENSATION

	Fees Earned or	Stock	Option
Name	Paid in Cash ($)	Awards	Awards	Total ($)
William R. Lang	27,000	-0-	8,000	35,000
Perry A. Lerner	25,000	-0-	-0-	25,000
Lee E. Mikles	27,000	-0-	-0-	27,000
Paul A. Novelly	23,000	-0-	-0-	23,000

      All cash consideration reflected in the “Fees Earned” column above was in respect of the directors’ annual stipends and committee meeting fees. During Fiscal 2008, the Company did not issue any non-qualified options under the 2004 Stock Incentive Plan. There were no awards of restricted stock during Fiscal 2008 and there were no directors’ options exercised. The amounts reflected in the “Option Awards” column above reflect the dollar amount recognized by the Company for financial statement reporting purposes with respect to the vesting during Fiscal 2008 of options awarded to the named directors during prior periods.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS

Equity Compensation Plan Information as of the end of Fiscal 2008

	Number of securities	Weighted-average	Number of securities
	to be issued upon	exercise price of	remaining available for
Plan Category	exercise of	outstanding	future issuance under
	outstanding options,	options, warrants	equity compensation
	warrants and rights	and rights	plan (excludes column a)
	(a)	(b)	(c)
Equity Compensation
Plans approved by	316,000	$3.34	122,834
security holders
Equity Compensation
Plans not approved	-0-	N/A	-0-
by security holders
Total	316,000	$3.34	122,834

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

      The following table sets forth, as of April 1, 2009, certain information regarding the beneficial ownership of the Company’s common stock by (i) each person known by the Company to be beneficial owner of more than five percent of the outstanding shares of Company common stock, (ii) each director; (iii) each named Executive Officer; and (iv) all directors and executive officers as a group.

	Stock Beneficially Owned
	No. of
Name and Address of Beneficial Owner (1)	Shares	% of Class (2)
Ginarra Partners, LLC (3)	576,388	24.62%
149 Palos Verdes Blvd., Suite G
Redondo Beach, CA 90277
Graziadio Family Trust u/d/t 10-13-1975 (4)	410,519	17.54%
16633 Ventura Boulevard, Suite 510
Encino, CA 91436
G. Louis Graziadio III (5)	287,500	12.28%
Chairman, President and CEO
Advisory Research, Inc. (6)	138,150	6.53%
180 No. Stetson St., Suite 5500
Chicago, IL 60601
Perry A. Lerner (7)	67,004	2.86%
Director
Lee E. Mikles (7)	27,500	1.17%
Director
Paul A. Novelly (7) (8)	114,783	4.90%
Director
William R. Lang (9) (10)	10,000	*
Director
Richard Bern (11)	28,500	1.22%
Operational Consultant
James F. Sanders (9) (12)	20,000	*
Secretary and General Counsel
All Directors and Executive Officers as a	1,542,194	65.88%
Group (Excludes Advisory Research, Inc.)

____________________
 

(1)

Unless otherwise noted, the Company believes all persons named in the table have sole voting and investment power with respect to shares of common stock beneficially owned by them. Under the rules of the Securities and Exchange Commission, a person is deemed to be a “beneficial” owner of securities if he or she has or shares the power to vote or direct the voting of such securities or the power to direct the disposition of such securities. More than one person may be deemed to be a beneficial owner of the same securities.

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(2)		Percent of class owned is based on the number of shares outstanding plus options exercisable by the named beneficial owners. An asterisk in this column indicates that the named person holds less than 1% of the issued and outstanding shares.
(3)		Mr. Graziadio has sole voting and investment power over these shares in his capacity as chief executive officer of Second Southern Corp., which is the manager of Ginarra Partners, LLC. Mr. Graziadio disclaims any pecuniary interest or beneficial ownership of the shares owned by Ginarra Partners, LLC.
(4)		Shares are owned by the Graziadio Family Trust, a trust established by Mr. Graziadio, but as to which he is neither a trustee nor a beneficiary. Mr. Graziadio disclaims beneficial ownership of all shares owned by the Graziadio Family Trust. Mr. Lang and Mr. Sanders serve as two of the three trustees of the Graziadio Family Trust.
(5)		Includes a total of 134,500 shares subject to options granted under the Company’s incentive stock plans. Does not include 576,388 shares held by Ginarra Partners, LLC, as to which Mr. Graziadio has sole voting and investment power by virtue of being the chief executive officer of the manager of Ginarra Partners. Does not include 410,519 shares which are owned by the Graziadio Family Trust, a trust established by Mr. Graziadio, but as to which he is neither a trustee nor a beneficiary. Mr. Graziadio disclaims beneficial ownership of all shares owned by the Graziadio Family Trust and Ginarra Partners, LLC.
(6)		Based on a Schedule 13G filed by Advisory Research, Inc. with the SEC on February 9, 2009.
(7)		Includes 15,500 shares subject to options granted under the Company’s 1998 Director Plan.
(8)		Includes 99,283 shares which are owned by St. Albans Global Management LLLP, a Delaware limited liability limited partnership, as to which Mr. Novelly is the chief executive officer. Mr. Novelly disclaims beneficial ownership of the shares owned by St. Albans Global Management LLLP.
(9)		Mr. Lang and Mr. Sanders serve as two of the three trustees of the Graziadio Family Trust (“Trust”) (see footnote 4 above). As a trustee, each shares voting and investment power with respect to the 410,519 shares owned by the Trust. Each of Mr. Lang and Mr. Sanders disclaims any pecuniary interest in or beneficial ownership of the shares owned by the Trust.
(10)		Includes 10,000 shares subject to options granted under the Company’s 2004 Stock Plan.

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(11)		Includes 20,000 shares subject to options granted under the Company’s 1998 Employee Plan.
(12)		Includes 10,000 shares subject to options granted under the Company’s 2004 Stock Plan and 4,000 shares subject to options granted under the Company’s 1998 Employee Plan.

Item 13. Certain Relationships and Related Transactions and Director Independence

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company reimburses or pays costs and expenses incurred by Second Southern Corp. and Ginarra Partners, LLC, companies affiliated with Mr. Graziadio, in connection with Mr. Graziadio’s execution of his duties as chairman and chief executive officer of the Company. These costs include clerical and administrative support, travel and entertainment expenses, and certain direct overhead costs including, but not limited to, postage, communication charges and office supplies. Payments to such affiliates of Mr. Graziadio for such costs and expenses in fiscal years 2008 and 2007 were $135,673 and $154,415, respectively. William R. Lang, a director of the Company, is the chief financial officer of Second Southern Corp.

      James F. Sanders, corporate secretary of the Company, provides general counsel services to the Company. During Fiscal 2008, Mr. Sanders was paid $127,775 for legal services. Mr. Sanders also is employed by Apex Oil Company, Inc., a company controlled by Paul A. Novelly, a director of the Company.

      Richard Bern, a former president of the Company’s Boss Manufacturing Company subsidiary, currently provides executive services to the Company as an operations consultant. Mr. Bern provides services in all of the Company’s significant operational areas, including sales, production, distribution and purchasing, including relations with foreign vendors.

      On July 30, 2004, the Company acquired all outstanding shares of common stock of Galaxy Balloons, Incorporated (“Galaxy”) from Terrence J. Brizz, who continues to serve as president of Galaxy. Under the stock purchase agreement, Mr. Brizz received payment of: (i) $200,000 of deferred purchase price, payable in two equal annual increments of $100,000 each on the first and second anniversaries of the purchase date, (ii) $50,000 under a non-compete agreement, similarly payable in two equal annual installments of $25,000 each, and (iii) up to an additional $400,000 of earn-out payments depending upon Galaxy’s financial performance during fiscal years 2005 through 2007. During Fiscal 2006, the Company paid $125,000 to Mr. Brizz in connection with the deferred purchase price and non-compete provisions of the Galaxy stock purchase agreement and $200,000 in earn-out payment with respect to Galaxy’s 2005 financial performance. Galaxy’s financial performance during Fiscal 2006 also exceeded the specified contractual benchmarks, thereby entitling Mr. Brizz to the final $200,000 earn-out payment, which amount was paid in March, 2007.

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DIRECTOR INDEPENDENCE

      Three of the Company’s five directors, Messrs. Lerner, Novelly and Mikles, are independent of the Company as determined under applicable rules and regulations of the NASDAQ Stock Market. Mr. Graziadio is Chief Executive Officer of the Company and Mr. Lang is employed by a company affiliated with Mr. Graziadio, so neither of them is independent of the Company.

      The members of the Audit Committee are Messrs. Mikles, Lerner and Lang. Mr. Mikles and Mr. Lerner are independent of the Company while Mr. Lang is not. The members of the Compensation Committee are Mr. Novelly and Mr. Lerner, both of whom are independent.

Item 14. Principal Accountant Fees and Services

      The Audit Committee approves the engagement of the Company’s independent auditors prior to their rendering of audit or non-audit services and sets their compensation. The firm of McGladrey & Pullen, LLP, Certified Public Accountants (“McGladrey”), served as the Company’s independent auditors for Fiscal 2008. Pursuant to SEC regulations, the Audit Committee approves all fees payable to the independent auditors for all routine and non-routine services provided. The Audit Committee considers and approves the budget for the annual audit and financial statement review services on a fixed fee basis prior to initiation of the work. Non-routine services in the ordinary course of business which are not prohibited under SEC regulation, such as tax planning, tax compliance and other services, generally are pre-approved on a case-by-case basis. All of the fees paid to the independent auditors in Fiscal 2008 were pre-approved by the Audit Committee.

      Audit Fees : During Fiscal 2008, the Company incurred fees of $130,050 for audit and financial statement review services from McGladrey and $131,000 for those services during Fiscal 2007.

      Audit-Related Fees : For Fiscal 2008, the Company did not incur any additional fees to McGladrey for audit related services and $1,400 for those services during Fiscal 2007.

      Tax Fees : During Fiscal 2008, the Company incurred fees of $99,400 to RSM McGladrey, Inc. (“RSM”), an affiliate of McGladrey, for tax compliance, tax advice and tax planning. During Fiscal 2007, the Company incurred fees of $47,125 to RSM for such services. Additional state tax services were required in 2008 for voluntary disclosure to states not previously filed in. This accounted for the increase in 2008 tax related fees to RSM.

      All Other Fees : During Fiscal 2008 and Fiscal 2007, the Company incurred no fees for services other than audit, audit-related and tax-related services from McGladrey.

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PART IV

Item 15. Exhibits and Financial Statements Schedules

The following exhibits are filed with this report.

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)	Boss Holdings, Inc.
By (Signature and Title)	/s/ Steven G. Pont
	Steven G. Pont, Vice President of Finance
	Principal Financial Officer and Chief Accounting Officer
	Date: April 28, 2009

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