Board Committees

Pentair's board of directors has four standing committees that perform essential corporate governance functions. These four committees currently consist of independent directors, and meet prior to each full Board of Directors' meeting and additionally, as needed. Management representatives attend each committee meeting.

• The Audit Committee assists the Board with oversight of accounting and financial reporting processes and audits of financial statements. These responsibilities include the integrity of the financial statements; com-pliance with legal and regulatory requirements; the independence and qualifications of our external auditor; and performance of both internal and external audit functions and external auditor. Pentair's Board has unanimously determined that all members of its audit committee are financially literate under NYSE rules and at least one member has financial management expertise. In addition, the Board has determined that all members of the audit committee qualify as "audit committee financial experts" under SEC regulations.
• The Compensation Committee sets and administers policies that govern executive compensation, includes establishing and reviewing executive salaries, admin-istering the management incentive and executive officer performance plans, and administering equity-based compensation under the omnibus stock incentive plan. The committee is responsible also for annual reviews of Pentair's management succession plans and for evaluating our CEO performance.
• The Governance Committee identifies individuals qualified to become Directors; recommends nominees to the Board for election at annual meetings of share-holders; and oversees public policy matters and compliance with the Code of Conduct. In addition, the Governance Committee monitors developments in director comp-ensation and, as appropriate, recommends changes in director compensation and applicable corporate governance principles to the Board.
• The International Committee assists management in formulating growth, development and organizational strategies for international business divisions and guides the direction of Pentair's operations outside North America.