AND COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Committee, reporting to the Board of Directors, has responsibility for:
a) Development of the management succession and leadership capability planning process.
b) Compensation of the company's executives.
c) Annual report on executive compensation for the company's annual proxy statement.
d) Administration of executive compensation and benefit plans.
STRUCTURE AND OPERATIONS
The Committee shall:
a) Meet at least four times annually.
b) Meet once a year with the CEO and the company's principal human resources executive to review performance criteria and compensation of key executives. Officers shall not be present when their performance and compensation are being discussed.
c) Report regularly to the Board of Directors on its activities.
d) Exercise sole authority to retain or replace outside counsel, compensation and benefits consultants or other experts to provide independent advice to the Committee, including the authority to approve the fees payable and any other terms of retention.
e) Evaluate annually the performance of the Committee and report the results of the evaluation to the Board of Directors.
f) Review this Charter annually.
g) Consist entirely of independent directors as defined in the Company's Corporate Governance Principles.
DUTIES AND RESPONSIBILITIES
The Committee shall:
a) Oversee and evaluate the human resources planning process and succession plans for the CEO and other senior executive positions. Recommend to the Board of Directors candidates for these positions.
b) Establish and review annually an emergency succession plan for the CEO and other senior executive positions.
c) Review periodically with the CEO the quality of the management group and the planning and implementation of programs for talent development, emphasizing alignment with the corporation's strategic and operating plans.
d) Establish and review the corporation's total compensation philosophy. Review and recommend to the Board of Directors new and revised executive compensation programs including cash incentives, equity, and perquisites. Review and recommend to the Board of Directors new employee benefit plans and substantial revisions to existing benefit plans.
e) Review the corporation's executive compensation and employee benefit programs to determine whether they are properly coordinated and achieving the intended purpose. Review policies for the administration of executive compensation programs and oversee the activities of those responsible for plan administration.
f) Review and approve performance goals and objectives relevant to the CEO. Review and approve CEO salary, bonus and awards in light of performance against these goals.
g) Review and approve corporate goals relevant to officers' compensation including annual performance objectives. Evaluate the performance of officers in light of these criteria and, based on such evaluation, approve annual salary, bonus and awards to officers.
h) Review and recommend to the Board of Directors all equity compensation plans of the company, including those that are not otherwise subject to the approval of the company's shareholders.
i) Review and approve all awards pursuant to the company's 2002 Omnibus Incentive Plan or any other equity-based plans.
j) Prepare an annual report on executive compensation for the company's proxy statement, in accordance with rules and regulations of the NYSE, SEC and other regulatory bodies.
k) Review and approve any contracts or other transactions with current or former elected officers of the corporation subject, in the case of the CEO, to ratification by the independent directors of the Board.
l) Discharge any responsibilities delegated by the Board of Directors.