Leadership and Development

The Committee reviewed the Company’s leadership and organization development plans, as well as the Company’s profiles for succession candidates. It also discussed the Company’s leadership and development strategies. These are designed to provide leaders capable of creating effective organizations and executing business strategies that will drive the success of the Company. In addition, the Committee reviewed diversity activities and goals as part of the Company’s diversity program.

Company Policy on Qualifying Compensation

Under Section 162(m) of the Internal Revenue Code, the Company may not deduct certain forms of compensation in excess of $1,000,000 paid to any of the named executive officers that are employed at year end. The Committee believes that it is generally in the Company’s best interests to comply with Section 162(m). The Committee also believes, however, that there may be circumstances in which the Company’s interests are best served by maintaining flexibility, whether or not compensation is fully deductible under Section 162(m).

Richard S. Braddock, Chairman

Alice F. Emerson

Durk I. Jager

John J. Phelan, Jr.