2003 Committee Charter : ILA
COMPENSATION AND BENEFITS COMMITTEE
1. Formation. There will be a committee of the Board of Directors (the "Board") known as the Compensation and Benefits Committee (the "Committee").
2. Number. The Committee will be composed of two or more directors as determined by the Board.
3. Independence. Each director must be independent of management, and free from any other relationship that, in the determination of the Board (a) might interfere with the exercise of such director's independent judgment or (b) result in a lack of compliance with the (i) rules of the New York Stock Exchange1, (ii) the provisions of the Sarbanes-Oxley Act or (iii) the rules of the United States Securities and Exchange Commission. Each proxy statement for Aquila's annual shareholder meetings must disclose the basis for this determination by the Board.
4. Term. The members of the Committee will be elected by the Board of Directors at the annual meeting of the Board and will serve until their successors are duly elected. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the Committee.
The Committee's purpose is to:
· discharge the board's responsibilities relating to compensation of Aquila's executives;
· to produce an annual report on executive compensation for inclusion in Aquila's proxy statement, in accordance with applicable rules and regulations; and
· establish and maintain Aquila's retirement and employee benefit programs.
The Committee will meet at least two times annually, or more frequently as circumstances dictate.
The duties and responsibilities of the Committee are to:
· review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance in light of those goals and objectives, and have the sole authority to set the CEO's compensation level based on this evaluation;
· make recommendations to the Board with respect to incentive-compensation plans for members of senior management and all equity-based plans (provided, however, that the Committee may delegate authority with respect to equity-based plans for non-senior management employees);
· review and approve the salary, bonuses and other benefits, direct and indirect, of members of senior management;
· recommend compensation for directors;
· review and approve the corporate goals established for Aquila's employee benefit programs, including Aquila's qualified and non-qualified retirement programs and welfare plans;
· establish or amend or make recommendations that the Board establish or amend employee benefit programs as the Committee considers necessary or appropriate from time to time; and
· exercise the Board's fiduciary duties with respect to Aquila's employee benefit programs.
V. ANNUAL PERFORMANCE EVALUATION
There will be an annual performance evaluation of the Committee.
VI. REVIEW AND PUBLICATION
This Charter will be made available on Aquila's website. The Committee must review and reassess the continued adequacy of this Charter at least annually.
1 Under currently proposed NYSE rules, a person will not be considered to be independent if such person or any of their immediate family members: