AGERE SYSTEMS INC.
COMPENSATION COMMITTEE CHARTER
The purposes of the Compensation Committee (the "Committee") of
the board of directors (the "Board") of Agere
Systems Inc. (the "Corporation") are:
- to discharge the Board's
responsibilities relating to compensation of the Corporation's directors
and executive officers, including approving individual executive officer
- to review and recommend to
the Board compensation plans, policies and benefit programs for employees
prepare the report on executive compensation required to be included in
the Corporation's annual proxy statement.
Composition and Term of Office
- The Committee will consist of
not fewer than two members, each of whom shall be a director who satisfies
the independence requirements of the New York Stock Exchange (the
"NYSE") Listed Company Manual, as interpreted by the Board in
its business judgment.
- One member shall serve as
Chairman of the Committee. The members of the Committee shall serve
one-year terms, and shall be appointed by the Board annually on the day of
the Annual Meeting of Stockholders or on such other date as the Board
shall determine. Members of the Committee may be removed or replaced by
Committee Meetings - Operating Principles
- The Committee shall meet with
such frequency and at such intervals as it shall determine is necessary to
carry out its duties and responsibilities, but in any case, at least two
times each year.
- Meetings of the Committee may
be called as needed by the Chairman of the Committee, the Chairman of the
Board, the Chief Executive Officer ("CEO") or the Senior Vice
President, Human Resources.
- The Chairman will preside,
when present, at all meetings of the Committee. The Committee may meet by
telephone or videoconference and may take action by written consent.
- The Committee shall have the
sole right to retain and terminate compensation consultants to assist in
the evaluation of director, CEO or executive officer compensation,
including the sole authority to approve the consultant's fees and other
- The Committee shall have the
authority to obtain advice and assistance from any officer or employee of
the Corporation or from any outside legal expert or other advisor.
- The Committee may request
that members of management or outside consultants and advisors of the Committee, be present to assist the Committee in
performing its duties.
- Minutes of each meeting will
be kept and distributed to the entire Committee.
- The Committee may form, and
where legally permissible may delegate authority to, subcommittees when
the Committee deems it appropriate or desirable to facilitate the
operation or administration of the plans or programs. Where legally
permissible, the Committee may also delegate authority to committees
consisting of employees when the Committee deems it appropriate or
desirable for the efficient administration of employee compensation and
Compensation/Employee Benefits Responsibilities
The Committee shall perform the following functions:
- Provide oversight and
guidance for compensation and benefit philosophy for all employees of the
- 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 determine the CEO's compensation level based on this
evaluation. This includes salary, annual incentive and long term incentive
programs, whether stock or cash, and determinations relating to the
deductibility of compensation under Section 162(m) of the Internal Revenue
Code of 1986.
- Review and approve other
significant terms of employment for the CEO.
- Review and approve the
compensation, including base salary and incentive awards and other
significant terms of employment, for individuals reporting directly to the
CEO and holding a position classified as Vice President or higher
(together with the CEO, the "Executive Committee") and any other
Section 16 officer of the Corporation.
- Review and make
recommendations to the Board with respect to incentive compensation plans
and equity-based plans.
- Confer, as needed, with the
Senior Vice President, Human Resources on compensation and benefit
- Review the performance of the
individual members of the Executive Committee.
- Review and make
recommendations to the Board on matters concerning the directors' annual
retainer, as well as any other compensation programs relating to the
- Prepare the report on
executive compensation for inclusion in the Corporation's proxy statement
in accordance with applicable rules and regulations.
- Exercise any fiduciary,
administrative or other function assigned to the Committee under any of
the Corporation's health, benefit or welfare plans.
- Following each Committee
meeting, report at the next meeting of the full Board all significant
items discussed at the Committee meeting.
- Review and reassess the
adequacy of this Charter annually and recommend any proposed changes to
the Board for approval.
- Prepare the report required
by the rules of the Securities and Exchange Commission to be included in
the Company's annual proxy statement.
- Conduct an annual performance
evaluation of the Committee.
- Take such further actions or
provide such further advice as the full Board may from time to time
delegate to the Committee.