ADVANCING EXEMPLARY BOARD LEADERSHIP

NATIONAL ASSOCIATION OF CORPORATE DIRECTORS

Evaluating CEO Performance

February 26, 2015 The Four Season’s Hotel | Austin, Texas AGENDA 7:00 am Registration / Networking / Breakfast Buffet Opens 7:30 am Breakfast / Roundtable Intros and Topic Discussion 7:50 am Program Presentation Begins 8:30 am Audience Q&A 9:00 am Adjourn and 9:15 am Final Networking

© 2015 National Association of Corporate Directors

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Austin Sponsors

Media Partners / In Kind Sponsors

SUSTAINING BOARD SPONSOR

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DIRECTOR LEVEL

107 Full Board Members – Texas TriCities Committed to Excellence in Governance

Germania Farm Mutual Insurance Association Greater Houston Women’s Chamber of Commerce Group 1 Automotive Halcon Resources Corporation Halliburton Hanger, Inc. Harvest Natural Resources, Inc. HCC Insurance Holdings, Inc. Hercules Offshore, Inc. HomeAway Houston Wire & Cable Company Ignite Restaurant Group Independence Contract Drilling - NEW Integrated Electrical Services, Inc. Integrity Bank KBR, Inc. Key Energy Services, Inc. Kirby Corporation KMG Chemicals, Inc. Kraton Performance Polymers, Inc. LGI Homes, Inc. Linn Energy, LLC Luby's, Inc. LyondellBasell Industries Magnum Hunter Resources Corp. Main Street Capital Corp. McDermott International, Inc. Midstates Petroleum Company MRC Global, Inc. Nabors Industries National Instruments Corp. Newfield Exploration Company Newpark Resources, Inc. Noble Corporation Oiltanking Partners LP

Orion Marine Group, Inc. Parker Drilling Company Phillips 66 Pioneer Energy Services Powell Industries, Inc. PROS Holdings, Inc. Quanta Services, Inc. Rackspace Hosting, Inc. Rignet, Inc. Rush Enterprises, Inc. Sanchez Energy Corporation Service Corporation International Sharps Compliance SolarWinds, Inc. Southwest Water Company - NEW Spectra Energy Partners, LP Sterling Construction Co Stewart Information Services Corporation Swift Energy Company SYSCO Corporation Team, Inc. TDECU NEW!!!! Tesoro Logistics LP Tesoro Corporation TETRA Technologies Thermon Group Holdings, Inc. Trecora Resources Triumvir, LLC USAA USA Compression Partners USA Truck Waste Management, Inc. Weatherford International Ltd. Westlake Chemical Corporation WILBROS

Active Power Advanced Micro Devices, Inc. Alder Koten Anadarko Petroleum Corporation Atwood Oceanics, Inc. Baker Hughes Biglari Holdings, Inc. BPZ Energy, L.L.C. Bristow Group, Inc. Buckeye Partners, L.P. C.H. Guenther & Son, Inc. Cal Dive International, Inc. Cameron International Cardtronics, Inc. Carrizo Oil and Gas CenterPoint Energy Chicago Bridge & Iron Company Cirrus Logic, Inc. ConocoPhillips Crestwood Midstream Partners, Crown Castle International CST Brands Cyberonics, Inc. Delek Holdings Dynegy, Inc. Eagle Rock Energy Partners, L.P. Endeavour International Energy XXI (Bermuda) Limited ERCOT Exterran Holdings, Inc. Fallbrook Technologies, Inc. Flotek Industries FMC Technologies, Inc. Forbes Energy Services Forestar Group, Inc. Freescale Semiconductors

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Announcing the Newest Additions to Texas TriCities Chapter

Austin Area New Members

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Cordell Bennigson

Daniel Buche Charles Burtch Mark Rollans

Wayne Scholtz Glenn Schweets Richard Smith

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NACD Chapters Nationwide

NACD Arizona NACD Atlanta

NACD Capital Area NACD Carolinas

NACD Chicago NACD Colorado

NACD Connecticut NACD Florida

NACD Heartland NACD Minnesota

NACD New England NACD New Jersey

NACD New York NACD North Texas

NACD Northern California NACD Northwest

NACD Philadelphia NACD Research Triangle

NACD Southern California NACD Texas TriCities

NACD Three Rivers Chapter NACD Utah

NACD members are welcome to attend events at ALL chapter locations!

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NACD Global Board Leaders’ Summit

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New month. New venue. New name. As the premier event on the directors’ calendars each year, NACD’s annual conference brings together the best and the brightest in corporate governance for three days of dialogue, networking, and cutting-edge insight. This dynamic event is carefully crafted to deepen our collective understanding of the challenges and opportunities facing boardrooms today and in our future. With a new venue, in a new month, and with a new name, our 2015 Global Board Leaders’ Summit will convene more than 1,200 of the world’s leading directors and industry experts with a mission to raise the bar for boardroom leadership across the globe. Join us in our nation’s capital this fall to envision new possibilities and inspire progress.

“The future is here. It’s time to do our own imagining and lead our companies into a paradigm of continuous reinvention.”

– Reatha Clark King, NACD Board Chair

NACD Global Board Leaders’ Summit September 26-29, 2015

Marriott Marquis • Washington, DC Register before March 31, 2015 and save $1500.

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Upcoming Texas TriCities Chapter Programs HOUSTON PROGRAMS Mar 5 Board Oversight in the Era of Disruptive Market Forces Breakfast 7:00am – 9:00am Houstonian Hotel and Spa Apr 2 Innovative Healthcare Solutions: Which Companies and Boards are Succeeding Breakfast 7:00am – 9:00am Houstonian Hotel and Spa May 7 Blindsided: Managing Unknown Corporate Risks from the Boardroom Breakfast 7:00am – 9:00am Houstonian Hotel and Spa

AUSTIN PROGRAMS Apr 22 Member and Prospective Member Happy Hour – Capital Grille 5:30pm – 7:00pm Apr 23 Conscious Capitalism and the Board: A Conversation with Walter Robb, Co-CEO, Whole Foods The Four Seasons Breakfast 7:00am – 9:00am

SAN ANTONIO PROGRAMS Apr 10 Cybersecurity Oversight in 2015 Westin Riverwalk Hotel

Breakfast 7:00am – 9:00am

REGISTER AT texastricities.nacdonline.org

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Upcoming 2015 National Programs

REGISTER AT WWW.NACDONLINE.ORG

Conferences Mar 3 | New York, NY

*Leading Minds of Compensation

May 12-13 | San Diego, CA

NACD Strategy & Risk Forum

Director Professionalism Mar. 23-24 | Miami, FL

June 1-2 | Philadelphia PA

*Advanced DP Class

Aug 17-18 | Laguna Beach, CA

Nov 9-10 | Washington, DC

The Master Class

March 26-27 | Miami, FL

June 4-5 | Philadelphia, PA

Aug. 20-21 | Laguna Beach, CA

Dec 10-11 | Scottsdale, AZ

Webinars Feb 26 | Boardroom Excellence Series

Mar 12 | Compensation Committee Series

Mar 26 | Audit Committee Series

May 14 | Compensation Committee Series

June 18 | Boardroom Excellence Series

June 25 | Audit Committee Series

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Moderator ____________________________________________________ Jackie Kimzey Director, Tangoe, Inc., Invodo, Verified Person Panelists _____________________________________________________ Stuart Guthrie Managing Director, Russell Reynolds Associates Joel Trammell Chief Executive Officer, Khorus, Inc. Director, Black Box, Network Services, Austin Technology Council, Rise School of Austin, Packet Design, iGrafix

Program Panelists

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Assessment of a Sitting CEO

Stuart G. Guthrie

CEO Assessment Competencies

Leading Teams and Communication

Vision and Strategic Direction

Financial Acumen

Building Capabilities

Leads the company and sets a philosophy that is well understood, widely supported, consistently applied and effectively implemented; sets standard for strong safety and ethical compliance

Ensures the development of a long-term strategy; establishes objectives and plans that meet the needs of shareholders, customers, employees, and all corporate stakeholders; ensures consistent and timely progress toward strategic objectives; obtains and allocates resources consistent with strategic objectives

Establishes appropriate annual financial goals and longer-term financial objectives and manages to consistently achieve these goals; ensures that appropriate accounting systems are maintained to protect assets and maintains effective control of operations

Develops, attracts, retains, motivates, and supervises an effective top management team capable of achieving objectives; provides for management succession

Keys to Success Individual Competencies

Human Resources

Communications/External Customer Orientation

Board Relations

Ensures the development of effective recruitment, training, retention and personnel communications plans and programs to provide and motivate the necessary human resources to achieve objectives; establishes and monitors diversity programs to provide equal opportunity employment for all employees

Serves as chief spokesperson, communicating effectively with shareholders and all stakeholders; ensures that the company and its operating units contribute appropriately to the well-being of their communities and industries; represents the company in community and industry affairs

Works closely with the board of directors to keep them fully informed on all important aspects of the status and development of the company; facilitates the board’s governance, composition, and committee structure; implements board policies and recommends policies for board consideration

Keys to Success Organizational Competencies

Source: Sample competencies, US National Association of Corporate Directors

CEO Assessment – Differentiating Characteristics

CEOs vs. Non-CEO Executives Percent Differences in Attribute Scores

0%

5%

10%

15%

20%

25%

30%

Forward-Thinking Intrepid Team-Building

A

B

C

13%

27%

22%

16% 14%

17% 15%

14% 10%

1

2

3

A Strategic yet tactical B Tough yet emotionally sensitive C Decisive yet inclusive

Paradoxes 1. Calculated

Risk Taking

2. Biased Toward (Thoughtful) Action

3. Efficient Reader of People

Top 3

Source: Russell Reynolds Associates.

F.I.T. Attribute CEO Differentiator %Var

Forward Thinking Forward Thinking •Plans ahead and is prepared for the future 13%

Intrepid

Calculated Risk Taking •Is comfortable taking calculated but not careless risks 27%

Biased Toward (Thoughtful) Action •Is biased toward execution but not too impulsive 22%

Optimistic •Actively and optimistically pursues new opportunities 16%

Constructively Tough Minded •Is thick-skinned and perseverant but not insensitive 14%

Team-Building

Efficient Reader of People •Seeks to understand different perspectives but does not overanalyze 17%

Measured Emotion • Displays intensity/emotion but maintains control 15%

Pragmatically Inclusive •Involves others in decisions but also is an independent decision maker 14%

Willingness to Trust •Is comfortable with a variety of people but is not too trusting 10%

Source: Russell Reynolds Associates.

CEO Assessment – Differentiating Characteristics

Texas TriCities Chapter Program

Thank you for attending! To review past programs, please visit:

http://texastricities.nacdonline.org/Resources/meeting.cfm

Visit texastricities.nacdonline.org to register for upcoming programs. To get involved with the NACD Texas TriCities Chapter, please contact our Chapter Administrators:

Julie Pitts, Executive Director, julie@nacdttc.org

Becky White, Chapter Administrator, becky@nacdttc.org

Julie Cell: 713.459.8104 | Becky Cell: 832.444.2431

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