STEVEN HALL & PARTNERS

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1 STEVEN HALL & PARTNERS E X E C U T I V E C O M P E N S A T I O N C O N S U L T A N T S shp@shallpartners.com

2 ABOUT US Steven Hall & Partners ( SH&P ) is an independent compensation consulting firm, specializing exclusively in the areas of executive compensation, board remuneration and related corporate governance issues. By focusing solely on this critical and complex segment of the human resources arena, we are able to provide our clients with the highest quality expertise and best counsel available on a practical basis. We specialize in conceptualizing total compensation policy, establishing overall compensation structures and designing state-of-the-art incentives in short, providing creative direction through executive compensation. Our services span the full spectrum from initial design to turnkey installation. Our recommendations are tailored to the needs of each client; and reflect the client s unique history, culture, structure, strategies, challenges, goals and personnel. We serve clients of varying size, from startups to companies in the Fortune 50, in a wide variety of industries at all stages of the business cycle. Additionally, we work with privately owned and not- forprofit organizations with varied structures. We believe the diversity of our experience serves as a strong foundation for our advice. While we recognize that competitive practices are different across industries, we also believe that one size does not fit all, and that well- designed compensation programs should be tailored to the specifics of each client situation, rather than simply follow industry trends. We are leery of industry generalizations that might serve to pigeon hole companies by industry into programs that are not best suited to their individual facts and circumstances. Rather, we believe that companies should design compensation programs that best attract, retain and motivate executives to execute the company s business plan, taking into account the personalities of the executives involved and the corporate culture of the organization. This may involve searching for the best ideas of other industries to gain a competitive advantage in attracting, retaining and motivating executives. 1

3 ABOUT US WHY CHOOSE SH&P? Our Experience and Proven Judgment We bring a unique level of in-depth practical experience and proven judgment to each of our client engagements. Our managing directors have significant experience serving as independent advisors to Boards of Directors, Compensation Committees and senior management and in providing actionable advice tailored to each client s specific needs. Our Breadth of Technical Expertise Our managing directors are all experienced and knowledgeable professionals in the areas of executive and director compensation. In addition, each managing director possesses particular areas of interest, focus and expertise on a wide range of topics, including SEC disclosure rules, shareholder advisory firms, shareholder outreach, tax and accounting rules, compensation benchmarking and incentive designs. We believe that this breadth of expertise is unique among our comparators and represents an important competitive advantage, as it allows us to provide comprehensive guidance to our clients on accounting, tax, legal and regulatory issues. This is of particular importance since Board committees with decision-making authority over compensation face increased responsibility for the quality of disclosure and require support on technical issues to meet their fiduciary duty to be fully informed in making decisions. We Are Recognized Thought Leaders Our principals are frequently quoted in notable publications such as The Wall Street Journal, The New York Times, The Washington Post, Fortune, and BusinessWeek and have been interviewed on Good Morning America, ABC News, CNBC, Fox Business, and National Public Radio. We have been asked to author articles for various trade publications, including Directorship, Corporate Board Member, Corporate Secretary, The Corporate Board, Corporate Governance, Directors & Boards and Workspan. Annually since the list s inception, Steven Hall has been recognized as a member of the Directorship 100, a group of professionals influential in corporate governance by Directorship and the National Association of Corporate Directors. Additionally, Mr. Hall is the co-author of the book Executive Compensation Best Practices and of a chapter on effective compensation committee practices for The Handbook of Board Governance. 2

4 We Focus on the Best Interests of Shareholders We help our clients to develop compensation programs that are competitive and tightly aligned with short- and long-term strategic initiatives of the Company, promote the creation of corporate and shareholder value and reflect consideration of current governance issues and best practices. We Are Creative, Strategic Problem Solvers Our clients span a variety of industries and include private and public companies with a wide range of revenues and market capitalizations. This breadth of experience permits us to think outside the traditional approach of what do our peers do? and provides the opportunity to offer solutions from similar situations in other industries. Our Advice and Recommendations Are Tailored to Each Client We tailor each of our recommendations to Board and/or Committee policy direction, as well as the business strategy, goals and specific needs of each client and its executive group. We do not provide clients with off the shelf solutions. In compensation, one size does not fit all. We Are Completely Independent Our independence is critical to our reputation and our livelihood, and we guard it vigilantly. Our founding partners have long held the belief that regardless of whether we are retained by the Compensation Committee or management, our advice and viewpoint should always be driven by what is in the best interests of shareholders. This recognition that our positions, views and recommendations are driven by our commitment to shareholders assures that we will always act in a manner that is independent and unbiased. 3

5 ABOUT US PHILOSOPHY We believe that the foundation for all compensation programs should be the organization s strategic plan and the compensation philosophy established by the Compensation Committee in conjunction with management. This is particularly critical in today s Say on Pay environment. Compensation is one of the clearest ways to communicate a company s priorities and values, and properly designed compensation programs are vital to reinforce the strategy and motivate achievement of the organization s business objectives. Conversely, when compensation programs are inconsistent with the organization s strategy, mission and/or philosophy, the result can be costly. When it comes to executive compensation design, too often companies seek competitive parity rather than competitive advantage. While a thorough understanding of market practice is important, it is critical to assess this information in the context of the specific strategy and objectives of the company. We know from experience that one size does not fit all, and work with clients to design compensation programs which reflect their specific facts and circumstances as well as their short- and long-term strategic objectives. A creative combination of various compensation and benefit vehicles can be designed to deliver competitive, strategically focused compensation while maximizing effectiveness, tax and accounting efficiencies. Additionally, we believe that balanced programs consisting of multiple compensation vehicles utilizing different but complimentary performance metrics and targets drive responsible growth and mitigate risk. While accounting, legal, tax and shareholder considerations should never be the sole reason for the selection of a particular plan, a nuanced examination of their impact on both the company and its executives should be included in any analysis. Knowledge and awareness of the views of institutional investors and the public are also important considerations when determining executive compensation strategy, design and opportunities available. But this does not mean that such considerations should receive undo weighting in the decision process. The role of the Compensation Committee is to adopt a program that will create shareholder and corporate value. Based on our experiences with clients over the years, we continue to believe that carefully designed compensation programs tightly aligning pay with the long-term performance of the corporation are in the best interests of shareholders, and that diligent education campaigns and governance road shows can go a long way towards influencing key stockholders and advisory services. 4

6 HOW WE WORK We create dedicated engagement teams for each of our clients. Team members are chosen based on the industry and project needs of each client. We believe that this team approach offers our clients the best expertise of our entire firm, rather than simply the best of one particular individual. ENGAGEMENT TEAMS Each of our teams is led by one of our managing directors. These individuals are recognized and seasoned experts in the field who bring their in-depth experience and proven judgment to each client assignment. Our lead consultants do not merely parachute in to deliver reports or attend Board meetings, but rather are actively involved in all aspects of the engagement. They provide strategic and conceptual guidance for all projects completed on behalf of the client, analyze data and develop recommendations, and serve as the primary author of all client deliverables. The lead consultant also serves as the primary point of contact for all client interactions. For many engagements, lead consultants are assisted by a second senior consultant who serves as project leader and coordinates the data collection and analysis required to support the lead consultant s recommendations. This project leader is also fully briefed on all client matters and prepared to assist clients in the event that the lead consultant is temporarily unavailable. These team leaders are supported by a cadre of consultants and analysts, all of whom are experienced and capable practitioners. As needed, our engagement teams also rely upon in-house experts with specialized knowledge and expertise in areas such as ISS policies (both governance and new share requests) and negotiations with ISS staff, survey market pricing, 280G calculations, accounting and tax matters, comprehensive shareholder outreach programs, CD&A drafting and responses to SEC comment letters, and technical design and drafting of incentive plans compliant with 162(m), 409A and ISS guidelines. 5

7 OUR SERVICES EXECUTIVE COMPENSATION - FOR PROFIT ORGANIZATIONS Executive compensation is one of the clearest ways to communicate a company s priorities and values. Our Executive Compensation services range from strategy development to program review and benchmarking. Executive Compensation Strategy and Program Review Develop compensation philosophy and objectives Evaluate link between compensation programs and philosophy Assess all elements of compensation program, individually and holistically Incentive Strategy Short- and long-term plan design Selection of appropriate financial and non-financial metrics, target performance levels and measurement systems Long-term incentive programs; vehicle mix and vesting provisions Share allocation and utilization; modeling for additional share reserves Special incentives for IPOs, LBOs, bankruptcies, M&As and startups Competitive Benchmarking Develop and review comparator group Compensation and performance evaluations Proxy disclosure and compensation survey analysis Shareholder Outreach Development of comprehensive shareholder outreach and approval strategies Pay versus performance evaluation Preparation for, and analysis following, Say on Pay votes Liaise with proxy advisory firms and evaluate reports Other Executive Benefits Supplemental retirement income plan development Deferred compensation and capital accumulation programs Retention and other special incentives Employment and severance agreement design and negotiation 6

8 EXECUTIVE COMPENSATION - NON-PROFIT ORGANIZATIONS Unlike their peers at public companies, directors of non-profit Boards may be personally penalized if the IRS determines that the compensation awarded to certain executives was not reasonable. Therefore, our clients often struggle to balance the need to pay competitively to retain talented executives with the desire to honor the organization s mission and use donor resources responsibly. Executive Compensation Strategy and Program Review Review organizational objectives and relationship to compensation programs Develop and review executive compensation philosophy Review current compensation programs Assist with communication and implementation of program changes Reasonableness Determination Develop procedures for systematically making pay determinations Peer group evaluation and analysis Competitive benchmarking Written analysis as to reasonableness of compensation; reasonableness opinion DIRECTOR REMUNERATION Today, Directors spend more time than ever on board matters. Additionally, the market for qualified director talent is increasingly competitive and scrutiny of director compensation levels is increasing. We assist clients in ensuring that their director compensation program enables them to attract and retain their directors. Evaluating Director Compensation Peer group evaluation and selection Marketplace compensation evaluation Vehicles and the appropriate balance of cash and equity compensation Current trends and best practices 7

9 OUR SERVICES CORPORATE GOVERNANCE Quality compensation programs are the direct result of good corporate governance practices. We strive to ensure our clients follow the proper process in developing and reviewing their compensation programs and are kept abreast of current governance trends and widely regarded best practices. Development and Review of Related Policies Director and executive stock ownership guidelines Clawback policy design and implementation Hedging and pledging policies for executives and directors Compensation Committee Compensation Committee charter, calendar and meeting agendas Updates on latest regulatory requirements, current trends and best practices Attendance at Committee meetings Performance evaluations for the Board, Committees and senior management Disclosure and Communication Comprehensive shareholder outreach program design and support Drafting and/or review of Compensation Discussion and Analysis, related proxy tables and disclosure Advise on, and assist with disclosure, of other public filings Communications regarding changes in compensation and/or benefits programs EXPERT WITNESS As recognized experts in executive compensation, director remuneration and related corporate governance matters, we serve as expert witnesses on these topics. We have served as expert witness for both the defense and plaintiff. Testimony, Opinions and Litigation Support Compensation reasonableness Option backdating Processes and procedures Assess historical pay trends 8

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