Incentive Pay Questions

• Do you clearly articulate your compensation philosophy and principles?
• Are you paying for performance in a way that really maximizes shareholder value?
• Are shareholders getting what they pay for from their investments in executive compensation?
• Are competitive payouts in line with competitive performance? (i.e. If you are paying at the 75^th percentile, are you performing at the 75^th percentile?)
• Do you consistently track performance as well as pay to a peer group?
• Do your incentive plans use the right performance incentive measures for your company, industry, and strategy?
• Do you set goals based on consistent internal and external standards of performance rather than negotiated budgets?
• Are you comfortable with your company’s perquisite policies?
• Are your compensation pay levels and practices compared on a regular basis to a peer group that would make logical sense to an independent observer?

Long Term Incentive Questions

• Do your long-term incentives make the most effective use of shareholder resources possible?
• Have you examined individual tally sheets for each executive before making annual pay decisions?
• Have you considered this year’s long-term incentive grant in light of the number of share options and restricted shares already held by each individual?
• Have you seen the calculated change-in-control payments for each senior executive and are you comfortable with those numbers?
• Are you comfortable with senior executives’ retirement arrangements, including SERP’s?. Have you seen a calculation of how much they would be paid?

If you answered “yes” to these questions —

Congratulations, you’ve shown good business judgment and are on your way to preparing a straightforward executive compensation disclosure report you can be proud of.

Next Step

We don’t mean to be cavalier about the magnitude and detail of material to be disclosed in next year’s proxy statement. There is much work to do. However, this is also an opportunity to “get it right” and make changes to your compensation philosophy and programs, so that you are pleased to report exactly what, how and why your company pays its executives.

In order to facilitate the process, it is best to begin planning now for the 2007 proxy season, when the rules will be in effect.

For more information concerning SEC’s new policies and how they’ll affect you, contact us at info@delvesgroup.com or (312) 441-9710.