Responsibility for compensation decisions for officers and Board members resides with the Board. For Section 16(b) officers of the Company, the Compensation Committee will recommend compensation changes annually. For Board members, the Nominating and Governance Committee will recommend compensation changes to the Board. The levels of compensation may change or may remain the same at the direction of the Board.

Management will report once a year to the Nominating and Governance Committee about the status of the Company's Board compensation in relation to other similar companies, both in the peer group and outside the group. For those comparisons outside of the peer group, companies of similar size should be used. Changes in Board compensation, if any, should come at the suggestion of the Nominating and Governance Committee as a recommendation to the Board for its decision. The Board continues to believe that an alignment of director interests with those of shareholders is important.

Similarly, management will report to the Compensation Committee annually about the compensation of officers and will recommend any required changes in the level of compensation. In conjunction with the recommendations, comparative studies within the peer group will be presented to the Committee. The Committee will then make recommendations to the Board for its decision.