2003 Committee Charter : PNW

Human Resources Committee/Charter

Committee Members:
Pamela Grant, Chairman
Michael L. Gallagher
Dr. Roy A. Herberger, Jr.
William S. Jamieson, Jr.
Robert G. Matlock


Human Resources Committee Charter:

GENERAL


The Human Resources Committee is composed of Directors who are independent within the meaning of applicable New York Stock Exchange rules.


Members of the Committee are selected by the full Board on at least an annual basis and may be removed by the full Board at any time.


The Committee is responsible to the Board of Directors and reports regularly to the Board on the activities of the Committee.


The Committee may create subcommittees and vest those subcommittees with the authority of the full Committee with respect to specific matters delegated to such subcommittees.


The Committee has sole authority to retain and terminate any consulting firm used to assist in the evaluation of director, Chief Executive Officer, or senior executive compensation, including sole authority to approve the consulting firm's fees and other retention terms.


HUMAN RESOURCES COMMITTEE DUTIES AND RESPONSIBILITIES

Review management's plans and programs for the attraction, retention, succession, motivation, and development of the human resources needed to achieve corporate objectives.
Review and approve policies on compensation, benefits, and perquisites, including incentive cash-compensation plans, equity participation, or other forms of executive incentives.
Recommend persons to the full Board for election or appointment as officers.
Annually review the goals and performance of all elected officers of the Company, including review of compensation, benefits, and perquisites, to satisfy the Committee that there is equity in the compensation practices and general integrity in conforming to approved plans and policies.
Review and approve corporate goals and objectives relevant to Chief Executive Officer compensation, assess the Chief Executive Officer's performance in light of those goals and objectives, and set the Chief Executive Officer's compensation level based on this assessment. In determining the long-term incentive component of Chief Executive Officer compensation, the Committee will consider the Company's performance and relative shareholder return, the value of incentive awards to chief executive officers at comparable companies, and the awards given to the Chief Executive Officer in past years.
Produce an annual report on executive compensation for inclusion in the Company's proxy statement, in accordance with applicable rules and regulations.
Make recommendations to the full Board for Directors' compensation, equity participation, benefits, and perquisites.
Act as the "Committee" under the Company's 2002 Long-Term Incentive Plan and 1994 Long-Term Incentive Plan for stock awards, or any successor or additional stock-based compensation plan(s), excluding from the Committee any Human Resources Committee member who does not meet the definition of "Non-Employee Director" under SEC Rule 16b-3.
Review any matters brought to the Committee's attention regarding labor relations.
Review and recommend changes to pension benefits.
Conduct a self-assessment on at least an annual basis to determine whether the Committee is functioning effectively, consistent with the self-assessment process reflected in the Company's corporate governance principles (see Paragraph 3(f) of the Corporate Governance Committee Charter).
Review and update the Committee's Charter at least annually.

MANAGEMENT'S RESPONSIBILITIES

Provide the Human Resources Committee with the necessary resources to discharge the Committee's duties and responsibilities, as reflected in this Charter and as assigned to the Committee by the Board of Directors.

Effective as of September 18, 2002.

/s/ WILLIAM J. POST

WILLIAM J. POST, Chief Executive Officer

/s/ PAMELA GRANT

PAMELA GRANT, Director and
Chairman of the Human Resources Committee
of the Board of Directors