2003 Committee Charter : ILA





1. Formation. There will be a committee of the Board of Directors (the "Board") known as the Corporate Governance Committee (the "Committee").

2. Number. The Committee will be composed of at least three directors, all of whom shall be independent, as determined by the Board in accordance with the listing standards of the New York Stock Exchange, as may be amended from time to time. [1]

3. Term and Operation. The members of the Committee will be elected by the Board of Directors at the annual meeting of the Board and will serve at the pleasure of the Board until their successors are duly appointed or they resign or are removed by the Board. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the Committee. A majority of the Committee members will be a quorum for the transaction of business and the action of a majority of those present at a meeting at which a quorum is present will be the act of the Committee. The Committee may not delegate its authority.


The Committee's purposes are to:

Oversee and make recommendations to the Board regarding the governance of the Company;

Identify individuals qualified to become Board members and recommend to the Board director nominees for consideration at the next annual meeting of shareholders; and

Develop and recommend to the Board a set of corporate governance principles applicable to the Company and periodically review such principles.


The duties and responsibilities of the Committee are to:

Develop and recommend to the Board a set of corporate governance principles applicable to the Company, review and reassess the adequacy of such guidelines at least annually, and recommend to the Board any changes deemed appropriate;

Develop and make policy recommendations on the size and composition of the Board;

Select and review possible candidates for Board membership consistent with the Board's criteria for selecting new directors;

Oversee, on behalf of the Board, annual evaluations of the performance of the members of the Board (and the Board committees, with the exception of the Committee) and the overall functioning of the Board and the Board committees and review such evaluations;

Recommend a slate of nominees to the Board as part of the nomination process for Board members in connection with each annual meeting of the Company's stockholders;

Generally advise the Board on corporate governance matters;

Ensure that new directors receive an appropriate orientation and develop an appropriate continuing education program for all directors;

Review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval;

Consider issues related to director retirement policies;

Review on no less than an annual basis with the Company's chairman and chief executive office the Company's succession plans relating to positions held by elected corporate officers and make recommendations to the Board regarding the election of individuals to such positions;

Consider questions of possible conflicts of interest between Board members and elected senior officers;

Monitor and recommend to the Board any alteration in the charter or membership composition of any of the Board committees; and

Recommend annually to the Board the membership composition of the Board committees.


The Committee will meet at least two times annually, or more frequently as circumstances dictate.

The Chair will preside at each meeting and, in consultation with the other members of the Committee, will set the frequency and length of each meeting and the agenda of items to be addressed at each meeting. The Chair will ensure that the agenda for each meeting is circulated to each Committee member in advance of the meeting.


The Board or a committee designated by the Board will annually evaluate the performance of the Committee.


The Nominating/Corporate Governance Committee has the authority to obtain advice and seek assistance of independent, professional advisors. The Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve such search firm's fees and other retention terms.


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 listing standards, each director must be independent of management and free from any other relationship that, in the determination of the Board, might interfere with the exercise of such director's independent judgment. Each proxy statement for Aquila's annual shareholder meetings must disclose the basis for this determination by the Board.

At a minimum, a person will not be considered to be independent if such person or any of his or her immediate family members:

Were employed within the last five years by Aquila;

Has been affiliated or employed by a present or former auditor of Aquila within 5 years after the end of either (a) the employment or affiliation or (b) the audit relationship;

Has been employed by a company at time in which an executive officer of Aquila served on the compensation committee of such company; or

Has a direct or indirect (e.g., as a partner, shareholder or executive officer of another company) business relationship with Aquila, except those relationships the Board determines do not interfere with the exercise of independent judgment because among other things, they are immaterial to Aquila, the director or, if applicable, the organization with whom the director or family member is affiliated.

In appointing members to the Committee, the Board must consider:

Whether an individual has sufficient time to commit to service on the Committee; and

Whether an individual has experience in carrying out the purposes of the Committee.