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Compensation Committee Charter

The Compensation Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Administaff, Inc. (the “Company”) to (1) oversee and administer the Company’s compensation policies, plans and practices; and (2) to prepare the annual report required by the rules of the Securities and Exchange Commission on executive compensation for inclusion in the Company’s annual proxy statement.

Membership and Meetings
The Committee shall consist of a number of directors fixed from time to time by the Board of Directors, not less than two. The members of the Committee shall be appointed and may be removed by the Board in its discretion upon the recommendation of the Nominating and Corporate Governance Committee. The Committee shall comply with the independence requirements of The New York Stock Exchange. In addition, it is expected that each member shall be (a) a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, and (b) an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.

The Committee shall meet as often as its members shall determine to be necessary, or as meetings may be called by the Chair of the Committee, any two members of the Committee or the Chairman of the Board, but in any event shall meet at least four times each year. The Committee may invite members of management or others to attend meetings and/or to furnish pertinent information. The Committee shall also meet in executive session as required. The Board shall appoint one member of the Committee as Chair. The Chair of the Committee shall be responsible for scheduling all meetings of the Committee, determining the agenda for each meeting (following consultation with other members of the Committee and with management), presiding over meetings of the Committee and coordinating reporting to the Board. In the absence of the Chair, the majority of the members of the Committee present at a meeting shall appoint a member to preside at the meeting.

The Committee shall make regular reports to the Board, and all actions of the Committee shall be reported to the Board at the next regular meeting of the Board.

The Committee may form and delegate authority to subcommittees as it deems appropriate.

Duties and Responsibilities
The Committee shall:

1. Establish a compensation policy that is designed to attract and retain key executives responsible for the success of the Company and motivate senior management to enhance long-term stockholder value.

2. Establish bonus policies and other forms of compensation or benefits for all employees of the Company.

3. Review and approve the corporate goals and objectives relevant to compensation of the chief executive officer and senior management (direct reports to the chief executive officer) of the Company.

4. Evaluate at least once a year the chief executive officer’s performance in light of those goals and objectives and, either as a Committee or together with the other independent directors (as directed by the Board), determine and approve the compensation of the chief executive officer.

5. Annually review the performance of other senior management of the Company and recommend to the Board for approval the compensation for such individuals. For the purposes of this charter, “compensation” for the chief executive officer and other senior management of the Company shall include: (a) annual base salary, (b) bonus, (c) long-term incentive compensation, (d) equity-based compensation, (e) employment agreements and extensions thereto, severance arrangements and change in control agreements or provisions, (f) any special or supplemental benefits, including management perquisites, and (g) all other forms of compensation.

6. In determining the long-term incentive component of the compensation of the chief executive officer and other senior management, the Committee will consider the Company’s performance and relative shareholder return, the value of similar incentive awards to chief executive officers and senior management at comparable companies, and the awards given to the chief executive officer and senior management in past years.

7. Review, approve and recommend to the Board all incentive-compensation plans and equity-based plans of the Company.

8. Review and determine the awards for all employees eligible to participate in the Company’s equity-based incentive plans, except to the extent the Board delegates responsibility for the review and determination of awards for employees other than senior management of the Company to the chief executive officer.

9. Review new executive compensation programs; review on a periodic basis the operation of the Company’s executive compensation programs to determine whether they are properly coordinated; establish and periodically review policies for the administration of executive compensation programs; and take steps to modify any executive compensation programs that yield payments and benefits that are not reasonably related to executive performance.

10. Establish and periodically review policies in the area of management perquisites.

11. Review from time to time and make recommendations to the Board with respect to the compensation and benefits of non-employee directors of the Company, including incentive-compensation plans and equity-based plans.

12. Have oversight of any Company stock ownership guidelines for the directors, the chief executive officer and senior management of the Company.

13. Issue an annual compensation committee report on executive compensation as required by the rules of the Securities and Exchange Commission for inclusion in the Company’s annual proxy statement.

14. Annually review and report to the Board on the succession planning with respect to the chief executive officer, and recommend to the Board a successor to the chief executive officer when a vacancy occurs through retirement or otherwise, including emergency procedures for succession in the event of unexpected death, disability, or departure of the chief executive officer.

15. Review and report to the Board on succession planning with respect to other members of the senior management team and other proposed changes involving senior management positions.

16. Report regularly to the Board.

17. Perform such duties as may, from time to time, be delegated to the Committee under the compensation and benefit plans of the Company or its subsidiaries.

18. Exercise such other duties and responsibilities as may be assigned by the Board from time to time.

In carrying out these duties and responsibilities, the Committee shall:

  • Take into account various qualitative and quantitative indicators of corporate and individual performance.
  • Seek to set salaries comparable to peer group companies, considered to be certain companies in the service industry and in the same revenue category as the Company.
  • In evaluating the performance of management, take into consideration such factors as revenue growth, acquisitions, achievement of expansion goals and profitability.
  • Recognize performance and achievements that are more difficult to quantify, such as the successful supervision of major corporate projects, demonstrated leadership ability, and contributions to the industry and the community.


In exercising its authority, duties and responsibilities under this Charter, the Committee shall have and may exercise all the powers and authority of the Board. The Committee shall have the sole authority to retain and terminate any compensation consultants retained to assist in the evaluation of director, chief executive officer and senior management compensation, including the sole authority to approve the consultant’s fees and other retention terms. The Committee shall be assisted by the Company’s human resources, legal and accounting staff and in addition, to the extent it deems necessary or appropriate, the Committee may obtain assistance from such other persons, who need not be employees of the Company, or organizations, with the expenses incurred in their use to be paid by the Company. The foregoing authority includes the authority to retain, terminate and obtain advice and assistance from external legal, accounting or other advisors and consultants.

Annual Review of Charter and Performance

At least annually, the Committee shall review and reassess the adequacy of this Charter. The Committee shall report the results of the review to the Board of Directors, and, if necessary, recommend that the Board of Directors amend this Charter. The Committee shall annually review its own performance.

As adopted by the Board of Directors on November 18, 2003.


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