Board Involvement in Strategic Planning

The Company generally conducts an annual strategic planning process for its lines of business and certain functional areas. The results of this strategic planning process form the basis for the more specific planning activities of the lines of business and functions that occur throughout the year, including budgeting, organizational planning, investment analysis, and product planning.

The strategic planning process generally occurs in the spring. Prior to commencing the formal process, the Company’s senior management determines the scope and direction of the process for the year based on several factors, including evolution of the Company’s business since completion of the previous strategic plan, its financial performance, economic and market trends and conditions, competitive environment, and product development and launch plans. The strategic planning process generally is led by the Vice President of Strategy and Business Development with oversight from the Chief Executive Officer, Chief Financial Officer, and other executive officers.

The strategic planning process generally involves completion by each line of business of a long-term financial plan, supported by analyses of a number of relevant issues, including market conditions, competition, product strategy, new product development, cost of goods and operating expenses, capital investments, geographic issues, and organizational requirements. Major corporate service functions may also develop long-term plans to support the Company’s long-term strategic plan. The long-term financial plans of the individual business lines are aggregated, analyzed and adjusted to ensure alignment with the company’s long-term financial goals.

At the conclusion of the strategic planning process, the Company completes a discussion document that is shared with the Board of Directors consisting of the long-term financial plan together with analysis and discussion of the key strategies, considerations, and risks underlying the plan. The plan is then approved by the Board. The first year of the long-term financial plan becomes the basis for determining the budget for the next year.

Many of the corporate plans that follow from the annual strategic plan also are discussed at least annually by the Board and its committees, including organizational plans and annual budgets. In addition, management presents detailed reviews of the strategy and performance of the Company’s lines of business to the Board throughout the year. Board members have regular informal contact with the Chief Executive Officer regarding strategic matters and have full access to financial and strategic materials prepared throughout the year including a monthly report of financial results.

While it is the responsibility of management to conduct the day-to-day business of the Company, the Board of Directors oversees the development and execution of business strategies and continually monitors the Company’s performance against its plans.

September 30, 2009