Date of Most Recent Amendment:  May 12, 2005

Prepared by: Robert F. Wrobel

Approved and

Adopted by:  The Board of Directors

 
Alpharma Inc.
Compensation Committee Charter

 

 

Organization

 

This charter governs the operations and activities of the Compensation Committee.  The Committee shall be nominated by the Chairman of the Board and appointed by the Board of Directors and shall comprise at least three directors.  Members of this Committee shall be independent directors as that term is defined in the Alpharma Corporate Governance Principles.

Statement of Policy

 

The Compensation Committee, in order to assist the Board in the discharge of its responsibilities relating to compensation of the Company’s directors, executives, and other key employees of the Company:

·         Reviews, approves, and modifies, as necessary, the Company’s compensation and benefit philosophy;

·         Reviews, approves, and modifies, as necessary, executive compensation programs, plans and awards;

·         Administers the Company’s short- and long-term incentive plans and other stock or stock-based incentive plans;

·         Issues an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations; and

·         Reviews, approves, and modifies and revises, as necessary or desirable, general employee  benefit plans of the Company to the extent that such plans have either a substantial financial impact on the Company or provide benefits intended primarily for the CEO or members of the Senior Management Leadership Team.

Responsibilities

 

The Committee shall have the following responsibilities and the necessary power and authority, including budgetary and fiscal authority, to carry out such duties and responsibilities:

A.       Reviews and approves corporate goals and objectives relevant to CEO compensation, coordinates and consolidates input from members of the Board of Directors to provide an evaluation of the CEO’s performance in light of those goals and objectives, and establishes the CEO’s compensation level based on this evaluation.

B.       Takes all actions necessary with respect to incentive compensation plans and equity-based plans, including, but not limited to:

·         Approving equity incentive guidelines and general size of overall grants;

·         Approving specific grants to the CEO and members of the Senior Management Leadership Team;

·         Interpreting the plans;

·         Determining rules and regulations relating to the plans;

·         Designating categories of employees eligible to participate in the long-term incentive plans;

·         Imposing limitations, restrictions, and conditions upon any award as the Committee deems appropriate; and

·         Establishing, maintaining, revising, and rescinding rules and regulations relating to the Company’s incentive plans.

C.      Administers awards and compensation programs and plans intended by the Committee to qualify for an exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended, including:

·         Determining performance measures and goals;

·         Setting thresholds, targets, and maximum awards;

·         Reviewing periodically performance compared to goals; and

·         Evaluating past performance compared to goals.

D.      Takes all action necessary with respect to general employee benefit plans to the extent such plans have either a substantial financial impact on the Company  or provide benefits intended primarily for the CEO or members of the Senior Management Leadership Team including but not limited to approving, amending and interpreting such plans as may be necessary from time to time.

E.       Performs an annual performance evaluation of the Committee and its members.

F.       Holds overall responsibility for approving, evaluating, modifying, terminating, and monitoring the compensation plans, policies, and programs of the Company in regard to the CEO and members of the Senior Management Leadership Team.

G.      Makes recommendations to the Board of Directors, consistent with the guidelines set forth in the Corporate Governance Principles, with respect to approving, evaluating, modifying, terminating and monitoring the compensation plans, policies and programs of the Company as they relate to members of the Board.

H.      Establishes and maintains a management succession plan, including policies and principles for CEO selection and performance review, as well as policies regarding succession in the event of an emergency or the retirement of the CEO.

I.         The Committee may from time to time form and delegate authority to a subcommittee of one or more members, when appropriate and in accordance with applicable rules and regulations.

J.        The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for consideration and approval.

K.       The Committee may perform any other activities consistent with this Charter, the Company’s By-laws and applicable law, as the Committee deems appropriate or as requested by the Board.

Committee Operating Processes

Meetings

 

                Meetings may be called by the Chairman of the Compensation Committee by oral or written notice, communicated to each member not less than twenty four hours before such meeting.

 

                Action may be taken without a meeting if all members of the Committee consent to such action and confirm such unanimous consent in writing either prior or subsequent to the taking of such action.

 

Reports

 

                The Compensation Committee shall report to the Board at its next regularly scheduled meeting on any material actions taken by the Committee.  Minutes of all meetings of the Committee shall be kept in the ordinary course of business and shall be open for inspection at all times upon the request of any member of the Board of Directors.

 

Quorum

 

                A majority of the Committee shall constitute a quorum for the transaction of business and an affirmative vote of the majority of the members who attend the meeting shall be required for approval of any action.

 

Use of Third Party Providers

 

The Committee shall have the authority to use third party service providers in executing its duties.  The Committee shall have the sole authority to approve retain, terminate and approve the fees and other retention terms of any such third party service providers.

 

 

 

K:\Legal\Corporate\Alpharma Inc\Committee Charters - Working Folder\Comp Committee Charter.051205.Final.doc