Compensation of Directors
The Company targets compensation for service on the Board of Directors and its committees at
the 50th percentile of the market as defined by an analysis of the primary peer companies identified
on page 31. The Compensation Committee engages outside consultants for assistance in
determining the levels and components of compensation that are consistent with this objective. See
discussion beginning on page 26. The Chairman of the Board reviews the data and analyses
provided by the Company’s outside consultants and then makes recommendations to the
Compensation Committee regarding Director compensation. The Compensation Committee, in turn,
reviews the data and analyses provided by the Company’s outside consultants and the Chairman’s
recommendations and makes its own recommendations to the Board regarding Director
compensation. The Board of Directors then approves Board and Committee compensation based on
the recommendations of the Compensation Committee. Each year, the compensation levels
approved by the Board become effective at the Company’s annual meeting of shareholders and
remain in effect until the annual meeting of shareholders held in the following year.