2007 Spencer Stuart Board Index Findings Review of S&P 500 Proxies Spencer Stuart William B. Reeves Managing Director, Atlanta

2 Changing Director Profile >Board independence a reality and trend toward more independent board leadership 81% of directors are independent On 43% of boards, CEO is the only insider, up from 31% in % of boards separate the Chair and CEO roles, up from 25% in ’02 13% of Chairs are truly independent, up from 10% last year 94% of boards have lead/presiding director (up from 36% in ’03) >Profile of new directors continues to shift (329 in 2007) Fewer active CEOs – 33%; down from 41% in ’02 and 53% in ’00 More active and retired other corporate executives (e.g., division managers and functional unit leaders) – 21% vs. 7% in ’02 33% are first-time public company directors Slight increase in women – 19% vs. 16% in ’02 More bankers and investors -10% vs. 5% in ’02 Fewer lawyers, consultants and accountants - 5% vs. 16% in ’02

3 Changing Director Profile, cont’d >CEO increasingly likely to be sole inside director and less likely to serve on any outside boards CEO sole insider on 43% of boards, up from 31% in ’02 and 23% in ’98 S&P 500 CEOs serve on 0.8 outside boards, down from 1.2 in ’02 and 2.0 in ’98 >Women directors and women CEOs at all-time high 91% of boards have at least 1 woman director, up from 82% in ’02 55% of boards have 2 or more women directors and 15% have 3 or more women 15 women serve as CEOs, up from 7 in ’02 >Minority representation not growing For the largest 200 S&P 500 companies, minorities (including African-Americans, Hispanics and Asians) account for nearly 14% of directors, down slightly from ‘05 85% of these boards have at least one minority director >More companies appoint international directors Half of the top 200 S&P 500 companies have at least one director from outside the U.S., up from 45% in ’05

4 Trends in Governance Practices >Board size and number of meetings relatively stable 10.8 directors on average 8.3 board meetings/year on average, up from 7.5 in ‘02 >Mandatory retirement age more prevalent and older More boards have a retirement age: 79% vs. 55% in ’02 But older: 67% have age 72+ vs. 35% in ’02 >One-year board terms becoming more common 62% of boards now have a one-year term, compared to 40% in ’02

5 Trends in Governance Practices, cont’d >Greater disclosure of director recommendation sources Information on sources of new director recommendations was disclosed for 57% of new appointees. Director recommendations came from the following sources: -61% from executive search firms -19% from insiders (e.g., CEO, controlling shareholders) -18% from non-management directors >More disclosure of limits on other corporate directorships 55% of boards disclose limits on other corporate board service by their directors, up from 27% in ‘06 18% of boards limit other audit committee memberships for their own audit committee members, with the maximum typically set at 2 or 3. This is up from 5% in ’06

6 Committee Trends >Committees meeting more Boards with 11+ audit cmte mtgs: 35% vs. 1% in ‘02 Average number of audit committee meetings is 9.5 vs. 5.0 in ’02 Compensation committees met on average 6 times, up from 5.8 in ’05 Nominating committees met on average 5 times, up from 4.4 in ’05 >Audit chairs less likely to be CEOs/top executives Fewer active CEOs: 18% vs. 27% in ‘02 More retired CEOs: 24% vs. 18% More active/retired CFOs: 13% vs. 3% More active/retired accountants: 10% vs. 1% >Compensation and nominating committee chairs are most often retired CEOs/top executives CompCo chairs: 38% retired CEOs; 23% active CEOs NomCo chairs: 25% retired CEOs; 22% active CEOs

7 Non-Executive Chairs >35% of boards have separated the CEO/chair roles, up from 32% in ’06 and 25% in ’02 >13% of NECs are independent, up from 10% in ’06 >Independent NEC profile (n=60) 73% are retired; 27% active executives 50% are a former CEO of another company 17% are other retired executives/CFO/COO 10% are investors/involved in private equity 87% were on the board before becoming the chair >Additional compensation is paid to 83% of independent NECs Average additional compensation of $139,000

8 Lead and Presiding Directors >94% of boards have a lead or presiding director >More boards shifting toward lead director designation 40% designate lead director, up from 28% 60% designate presiding director, down from 72% in ‘04 >Fewer boards rotating presiding directors Of boards with a presiding director, 19% rotate the role, down from 27% in ’06 And, for those that still rotate, trend is to rotate annually instead of at every board meeting >Role most often filled by retired or active CEOs/presidents/chairs >Additional compensation is paid to 32% of lead/presiding directors Average additional compensation of $22,600

9 Director Compensation >New disclosure requirements bring transparency to director and top executives’ compensation >Board compensation reflects increased demands on directors All-inclusive average total compensation is $211,000 -Stock awards - 41% -Options - 16% -Cash - 35% -Other – 8% (e.g., insurance premiums, charitable award programs) Average cash retainer of $68,560 is up 8% from ’06 and 73% greater than $39,538 in ‘02 Fewer boards paying meeting fees: 52% vs. 70% But, meeting fees are higher: $2,027 vs. $1,596 More pay equity in addition to retainer: 72% vs. 42% Fewer pay with stock options: 42% vs. 77%

10 Committee Compensation >Committee compensation has increased for chairs and is shifting toward retainers for members Retainers for committee chairs more prevalent and larger -More boards pay: 88% vs. 55% -Average retainer amount has increased 74% to $10,358 from $5,968 in ‘02 Committee meeting fees less common -Fewer boards pay, although still a majority: 54% vs. 64% in ‘02 -Average fees have increased to $1,549 from $1,191 Committee member retainers increasing in popularity -More boards pay: 31% vs. 13% -Average retainer amount has increased to $6,468 from $4,822

11 SSBI Supplemental Survey of Corporate Secretaries >Boards seek more women and minority directors 73% of boards seek to bring on minorities 70% seek to bring on women >Boards seek new skills Financial expertise - 77% Active CEO/COO – 68% Retired CEO/COO – 49% International expertise – 52% Technology expertise – 36% Marketing expertise – 35% Legal expertise – 8% HR expertise – 7% Other (e.g., industry) – 22% Source: 2007 Spencer Stuart Board Index Supplemental Survey. 119 corporate secretaries responding.

12 >CEO succession approach varies 25% of boards do not have an emergency succession plan 62% of boards include CEO succession on the agenda annually; 34% more than once a year Primary responsibility for succession planning split between nominating committee (41%) and compensation committee (40%), although many boards now cite that multiple committees or the entire board are responsible 53% of boards use a formal review process to assess potential successors. Of these, 44% benchmark internal candidates against external ones 23% of boards encourage top internal candidates to take on outside public board directorships >Shareholder engagement increasingly prevalent 37% of boards, up from 22% in ’06, report that individual directors had direct contact with shareholders Most frequently raised topics: CEO compensation (28%), majority voting (22%), and other concerns about board composition (17%) Source: 2007 Spencer Stuart Board Index Supplemental Survey. 119 corporate secretaries responding. Supplemental Survey of Corporate Secretaries, cont’d

13 >Majority cite limits on outside board service 58% of boards limit outside public board service for their CEOs. -7% allow 0 outside boards -34% allow 1-2 outside boards -17% allow 3-4 outside boards 32% of boards limit outside board service for other senior executives -11% allow 0 outside boards -19% allow 1-2 outside boards -3% allow 3 outside boards >SEC disclosure requirements have impacted compensation committees 82% of boards spent additional time discussing and reviewing executive compensation 46% held more frequent meetings 27% attribute compensation policy changes to the new rules Source: 2007 Spencer Stuart Board Index Supplemental Survey. 119 corporate secretaries responding. Supplemental Survey of Corporate Secretaries, cont’d