Committee intended to exercise its discretion according to several factors. A critical factor was the Company’s EPS growth ranking relative to certain peer companies, and a schedule was established showing specific reductions in payout at various growth ranks. Below a minimum rank, the Committee intended to exercise its discretion as to whether any payout would be made. The Committee retains the ability to deviate from the schedule if circumstances warrant.

If and when vested, PSUs related to the 2006 LTIP awards are to be paid in cash based on the market value of the registrant’s stock at that time. For example, if 1,000 PSUs related to the 2006 LTIPs ultimately vest after the performance period has passed and the stock value at that time is $50 per share, the recipient would be paid $50,000. PSUs do not earn dividends and may not be voted during the performance period. PSUs may be forfeited in certain events related to termination of employment, and vesting of a prorated number of units is to be accelerated upon certain change in control events. The 2006 LTIPs are designed to tie each executive’s long-term compensation directly to shareholder value and to a specific EPS target. The structure and documentation for the 2006 LTIPs are substantially the same as that used for the 2005 awards, except that the 2005 awards are payable in actual shares rather than cash.

Conventional Stock Options

Shares subject to conventional stock options were granted to certain eligible persons, including executive officers. The shares subject to options granted to the registrant’s 2005 Named Executive Officers are: J. Kenneth Glass, 23,189 shares; Gerald L. Baker, 12,896 shares; Charles G. Burkett, 10,365 shares; and Jim L. Hughes, 9,567 shares. Larry B. Martin did not receive a 2006 option award in view of his previously-announced retirement that is scheduled to occur later this year. The 2006 option grant date is April 21, 2006. The option price per share in all cases is the fair market value of the registrant’s common stock on the grant date ($40.71). The Committee also approved revisions to the form of grant notice. All options granted at this time to executives have seven-year terms and become exercisable 50% on the third anniversary of the grant date, and 50% on the fourth anniversary. Acceleration of vesting for certain reasons, forfeiture, and early termination of the options are governed by the Plan and the notice of grant.

Performance Stock Options

In addition to the conventional option grants described above, the Committee granted stock options for 57,084 shares to Mr. Glass and for 51,601 shares to Mr. Baker that have a performance feature. Specifically, the performance options generally will be retained, or be forfeited, in proportion to the extent to which certain performance criteria are achieved or not achieved. To the extent that performance options are retained, they will not immediately vest, but instead will continue to vest on the same schedule as conventional options. The primary performance criterion for the 2006 performance options is the extent to which the registrant achieves certain earnings per share growth targets for 2006. The 2006 performance option grant date is April 21, 2006. The option price per share in all cases is the fair market value of the registrant’s common stock on the grant date.

Conventional Restricted Stock (RS)

The Committee granted conventional RS shares to certain eligible persons, including executive officers. The number of RS shares granted to the registrant’s 2005 Named Executive Officers are: J. Kenneth Glass, 4,637 shares; Gerald L. Baker, 2,579 shares; Charles G. Burkett, 2,073

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