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The primary functions of the Compensation Committee are (1) to discharge the Board’s responsibilities relating to compensation of Embarq’s executives in general and its principal senior officers in particular, (2) to report on executive compensation in Embarq’s annual proxy statement in accordance with applicable rules and regulations and (3) to review with management plans for the orderly development and the succession of senior officers.
The Compensation Committee will be comprised of at least three members. All Committee members must satisfy the independence and the other director qualification standards set forth in Embarq’s Corporate Governance Guidelines. In addition, unless the Board specifically determines otherwise, the Committee members also must meet the definition of a “non-employee director” under Section 16 of the Securities Exchange Act of 1934 and the definition of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986. The members and chair of the Compensation Committee will be appointed by the Board and will serve until removed by the Board or their successors have been duly appointed and qualified.
The Compensation Committee will meet as often as required to fulfill its responsibilities as set forth in this Charter and will meet no less than three times a year, including at least once annually without the Chairman and CEO. The Committee may meet in person or telephonically. The chair or his or her designee will preside over all Committee meetings. The Committee will report regularly to the Board on its decisions, recommendations and other activities. Any individual whose performance or compensation is to be discussed at a Committee meeting should not attend such meeting, or at least the relevant portion thereof, unless specifically invited by the Committee.
To fulfill its responsibilities and duties, the Compensation Committee will:
1. Develop and oversee Embarq's compensation programs and practices for executives generally and for principal senior officers in particular. The Committee also will have, as an important objective, the responsibility of ensuring that Embarq’s compensation and general human resource programs and practices are competitive and are effective in attracting, retaining and motivating highly qualified personnel.
2. Review and approve Embarq’s goals and objectives relevant to the Chairman and CEO’s compensation, evaluate the performance of the Chairman and CEO in light of those goals and objectives, and set the annual compensation levels for the Chairman and CEO based on the Board’s and the Committee’s performance evaluations and the Committee-approved compensation principles.
3. Review and approve Embarq’s goals and objectives relevant to compensation of principal senior officers, review management’s assessment of the performance of these principal senior officers, and set the annual compensation levels for these principal senior officers based on their performance evaluations and the Committee-approved compensation principles.
4. Make recommendations to the Board regarding director compensation.
5. Approve or, as appropriate, make recommendations to the Board with respect to incentive-compensation plans and equity-based compensation plans, including any amendments to them.
6. Determine, approve and ratify awards under incentive compensation and equity-based compensation plans, including amendments to the awards made under any such plans, and review and monitor awards under such plans.
7. Review and approve any proposed employment agreement with a principal senior officer. The Committee will review and approve any severance, retention or other termination plans and any severance, retention or other termination payments proposed to be made to any current or former principal senior officer, except for any such payment made in accordance with a plan previously approved by the Board or the Committee.
8. Review and approve executive compensation disclosures made in Embarq’s annual proxy statement and the report on executive compensation contained in the annual proxy statement.
9. With input from the Board, annually review with management plans for the orderly development and the succession of senior officers.
10. Periodically review the terms of and compliance with Embarq’s stock ownership guidelines for executive officers and outside directors.
11. Review and oversee the design and administration of the Company’s broad-based employee benefit programs, including, without limitation, defined benefit and contribution retirement plans.
12. Delegate authority to subcommittees when appropriate.
13. Annually review and reassess the adequacy of this Charter.
14. Annually evaluate the Committee’s performance, using procedures established or approved by the Nominating and Corporate Governance Committee.
15. Perform any other activities consistent with this Charter, Embarq’s Bylaws, Articles of Incorporation and applicable law as the Board considers appropriate and delegates to the Committee, including duties assigned to it in Embarq’s equity-based compensation plans, qualified retirement plans or other plans.
The Compensation Committee has the sole authority, at Embarq’s expense, to (1) retain, to determine the fees and other terms of engagement, and to terminate a compensation consultant to assist it regarding the Chairman and CEO’s and senior executive officers’ compensation, and (2) engage the services of other advisors to assist it in the discharge of its duties. The Committee also will have full access to Embarq’s records, officers, employees and outside advisors as necessary to perform its duties. At least once every three years, the Committee will retain a compensation consultant to report on whether the current compensation programs and agreements provide an appropriate level of compensation to (1) senior executive officers, and whether they provide a sufficient retention incentive, and (2) the Board’s non-employee members.