PRÁCTICA 7: DEMODULACIÓN AM Primera Parte

• Sir Winfried Bischoff • William D. Green

• Charles E. Haldeman, Jr.

• Harold McGraw III • Robert P. McGraw

• Hilda Ochoa-Brillembourg • Douglas L. Peterson • Sir Michael Rake • Edward B. Rust, Jr. • Kurt L. Schmoke • Sidney Taurel

• Richard E. Thornburgh

Unless you specify otherwise, the Board intends the accompanying proxy to be voted for these nominees.

Biographical information about these nominees can be found on pages 12 through 20 of this Proxy Statement.

Item 2. Proposal to Approve, on an Advisory Basis, the Executive

Compensation Program for the Company’s Named Executive Officers

Under the rules of the SEC, the Company is required to provide its shareholders with the opportunity to cast an advisory vote on the executive compensation program for the Company’s named executive officers. This pro- posal is frequently referred to as a “say-on-pay” vote. At the 2011 Annual Meeting, shareholders voted, on an advisory basis, in favor of casting the advisory say-on-pay vote on an annual ba- sis. The Company’s executive compensation program is intended to attract, motivate and reward the executive talent required to achieve our corporate objectives and increase share- holder value. We believe that our executive compensation program is both competitive and strongly focused on pay-for-performance princi- ples, and provides an appropriate balance between risk and rewards. In particular, our executive compensation program:

• aligns executive compensation with shareholder value on an annual and long-term basis through a combination of base pay, annual cash in- centives and long-term stock-based incentives; • includes a mix of compensation elements that

emphasizes performance results, with

approximately 85% of the targeted compensa- tion for Mr. Douglas L. Peterson, the Company’s Chief Executive Officer, and a significant por- tion of the targeted compensation for the other named executive officers being performance- based;

• delivers annual incentive payouts to executives based on the achievement of approved performance goals, which were based on net income and revenue goals for 2013;

• aligns the interests of executives with those of shareholders through long-term stock-based incentives comprised of performance share units that are based on the achievement of earnings per share targets. For 2013, the performance share unit award vests at the

• has features designed to further align execu- tive compensation with shareholder interests and mitigate risks, including stock ownership requirements, the Senior Executive Pay Re- covery Policy (a “claw-back” policy), an anti- hedging and pledging policy and limited perquisites.

Our executive compensation program is de- scribed in the Compensation Discussion and Analysis (“CD&A”), related compensation tables and other narrative executive compensation dis- closures required by the disclosure rules of the SEC, all of which are found in this Proxy State- ment. In particular, the CD&A, beginning on page 31 of this Proxy Statement, describes the Company’s executive compensation program in detail, and we encourage you to review it. Since the vote on this proposal is advisory, it is not binding on the Company. Nonetheless, the Compensation and Leadership Development Committee, which is responsible for approving the overall design and administering certain aspects of the executive compensation program, will take into account the outcome of the vote when making future executive compensation decisions. The Board of Directors recommends that you approve the following resolution that will be submitted for a shareholder vote at the 2014 Annual Meeting in support of the Compa- ny’s executive compensation program:

RESOLVED: That the shareholders of the Com- pany approve, on an advisory basis, the execu- tive compensation program for the Company’s named executive officers as disclosed pursuant to the rules of the SEC, including the

Compensation Discussion and Analysis, related compensation tables and other narrative execu- tive compensation disclosures included in the Proxy Statement for this Annual Meeting.

Item 3. Proposal to Ratify the Appointment of the Company’s

Independent Registered Public Accounting Firm

The Board, after receiving a favorable recom- mendation from the Audit Committee, has again selected Ernst & Young LLP to serve as the in- dependent Registered Public Accounting Firm of the Company and its subsidiaries for 2014. Al- though not required to do so, the Board is sub- mitting the selection of this firm for ratification by the Company’s shareholders for their views. Ernst & Young LLP has advised the Company that it has no direct, nor any material indirect, financial interest in the Company or any of its subsidiaries. The Board and the Audit Commit- tee may change the appointment at any time if they determine that a change would be in the best interests of the Company and its share- holders.

The following resolution will be offered by the Board of Directors at the Annual Meeting: RESOLVED: That the selection by the Board of Directors of Ernst & Young LLP to serve as the independent Registered Public Accounting Firm of the Company and its subsidiaries for 2014 be, and hereby is, ratified and approved.

The Board of Directors’