Components of Executive Compensation Program

The components of the executive compensation program are:

• base salary,
• short-term bonus, and
• long-term incentives.

Base Salary: Base salary is the only fixed portion of an executive’s compensation. Each executive’s base salary is reviewed annually based on (1) a compensation range which corresponds to the executive’s job responsibilities; and (2) the executive’s individual performance.

The Company measures individual performance in large part through the management appraisal process. This process evaluates performance against a combination of financial and non-financial goals established in the following three areas:

• shareholder satisfaction,
• customer satisfaction, and
• employee satisfaction.

The other portion of the management appraisal process measures an executive’s performance relative to the six Company values:

• respect for the dignity of the individual,
• integrity,
• trust,
• credibility,
• continuous improvement and personal renewal, and
• recognition and celebration.