- W. Richard Anderson
- Bruce W. McCullough
- Loren Singletary
VANGUARD NATURAL RESOURCES, LLC
AMENDED AND RESTATED COMPENSATION COMMITTEE CHARTER
OF THE BOARD OF DIRECTORS
(ADOPTED OCTOBER 30, 2013)
The Compensation Committee (the “Committee“) of Vanguard Natural Resources, LLC (the “Company“) assists the Board of Directors of the Company (the “Board“) with its responsibilities relating to compensation of the Company’s executives and directors and oversight of the Company’s compensation programs and policies.
The purposes of the Committee are to:
- Review, evaluate and approve the agreements, plans, policies and programs of the Company to compensate the Company’s executive officers and directors.
- Review and discuss with the Company’s management the Compensation Discussion and Analysis (“the CD&A“) to be included in the Company’s proxy statement for its annual meeting of unitholders (“the Proxy Statement“) or Annual Report on Form 10-K (the “Form 10-K“), as applicable, and determine whether to recommend to the Board that the CD&A be included in the Proxy Statement or Annual Report on Form 10-K, as applicable, in accordance with applicable rules and regulations.
- Produce the Compensation Committee Report as required by Item 407(e)(5) of Regulation S-K for inclusion in the Proxy Statement or Form 10-K, as applicable, in accordance with applicable rules and regulations.
- Otherwise discharge the Board’s responsibilities relating to compensation of the Company’s executive officers and directors.
- Perform such other functions as the Board may assign to the Committee from time to time.
The Committee shall consist of at least three members of the Board. Each member of the Committee must meet the independence and experience requirements of The NASDAQ Stock Market LLC (the “NASDAQ“). Notwithstanding the foregoing membership requirements, no action of the Committee will be invalid by reason of any such requirement not being met at the time such action is taken.
The members of the Committee shall be elected by the Board [annually] and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. One member of the Committee will be elected by the Board as Chairman and will be responsible for the scheduling of regular and special meetings and the functioning of the Committee. If a Chairman is not designated by the Board or present at a meeting, the Committee may designate a Chairman by majority vote of the Committee members then in office. Any vacancy on the Committee will be filled by, and any member of the Committee may be removed by, an affirmative vote of a majority of the Board. The Board may, pursuant to the limited liability company agreement of the Company, as may be amended or restated from time to time (the ” LLC Agreement”), remove a member of the Committee at any time, with or without cause, provided that the Board must, at all times, assure that the Committee will have a Chairman and sufficient members to satisfy the requirements set forth above relating to the number and qualifications of Committee members.
The Committee may appoint a subcommittee consisting of at least two Committee members to exercise any and all of the powers and authority of the Committee as provided in the resolutions establishing such subcommittee. Each subcommittee will keep minutes and regularly report to the Committee.
- The Committee will meet at the call of its Chairman, two or more members of the Committee or the Chairman of the Board. The Committee shall meet as often as it determines, and generally should meet not less frequently than quarterly. Meetings of the Committee will be held at such time and place, and upon such notice as its Chairman may from time to time determine. The Committee shall conduct special meetings as determined by the Chairman of the Committee or at the request of the Chief Executive Officer (“the CEO”), President or Chief Financial Officer. Meetings may be in person, by telephone or videoconference as needed to conduct the business of the Committee. The Committee may also take action by unanimous written consent to the fullest extent permitted by the Delaware Limited Liability Company Act or the LLC Agreement. The Committee shall maintain minutes of all of its meetings.
- Meetings may, at the discretion of the Committee, include other directors, members of the Company’s management, independent advisors and consultants or any other persons whose presence the Committee believes to be necessary and appropriate. Those in attendance may observe meetings of the Committee, but may not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event are not entitled to vote. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including, but not limited to, any director that is not a member of the Committee.
- A majority of the members of the Committee will constitute a quorum for the transaction of business, and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee.
- The Chairman shall schedule and preside at all meetings of the Committee. In the absence of the Chairman, a majority of the members of the Committee present at a meeting shall appoint a member to preside at the meeting.
- The Chair of the Committee shall report to the Board following each Committee meeting, and as otherwise required by the Chairman of the Board or designate a Chair pro tempore in the absence of its Chairman. The Committee may designate a secretary of the Committee at the meeting.
- The Committee may determine additional rules and procedures.
- The Committee will maintain minutes of its meetings and make regular oral or written reports to the Board, directly or through its Chairman, of its actions and any recommendations to the Board.
- Each member of the Committee as well as the Chairman will be paid the fee set by the Board for his or her services as a member, or Chairman, as the case may be, of the Committee. Subject to the Company’s Corporate Governance Guidelines and other policies, Committee members, including the Chairman, will be reimbursed by the Company for all reasonable expenses incurred in connection with their duties as Committee members or as Chairman.
The Committee has the authority to:
- Retain and determine funding for outside counsel or other experts or consultants, as it deems appropriate in its sole discretion. Any communications between the Committee and legal counsel in the course of obtaining legal advice shall be considered privileged communications of the Company. The Committee shall take all necessary steps to preserve the privileged nature of those communications. The Committee shall have the sole authority to retain and terminate any compensation consultant engaged to assist in the evaluation of compensation of directors and executive officers of the Company, including the sole authority to approve such consultant’s fees and other retention terms. The Company must provide for appropriate funding, as determined by the Committee, for payment of (a) compensation to any advisers employed by the Committee and (b) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
- Conduct or authorize investigations into any matter within the scope of the responsibilities delegated to the Committee as it deems appropriate, including the authority to request any officer, employee or adviser of the Company to meet with the Committee or any advisers engaged by the Committee.
- Delegate to its Chairman, any one of its members or any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. However, subcommittees do not have the authority to engage independent legal counsel and other experts and advisers unless expressly granted such authority by the Committee. Each subcommittee will keep minutes and regularly report to the Committee.
V. Duties and Responsibilities
The Committee shall have the duties and responsibilities set forth below:
- Establish and periodically review policies concerning perquisites and fringe benefits for each of the Chairman of the Board, President, CEO, and other executive officers of the Company and its subsidiaries;
- Establish company goals and objectives, consistent with unitholder-approved compensation plans for performance-based compensation for the CEO and other executive officers, for the defined performance period.
- Establish the maximum amount of performance-based compensation for the CEO and other executive officers for the defined performance period.
- Review and certify, in writing, whether established goals and objectives of any performance-based compensation plans have been met for the completed performance period.
- Review and approve performance-based compensation, if any, for the CEO and other executive officers based on the established company goals and objectives for the completed performance period.
- Obtain through discussions with management of the Company a general understanding of the compensation philosophy and design used throughout the entire organization.
- Review and recommend to the Board for approval performance-based compensation, if any, for officers other than the CEO and executive officers based on the established company goals and objectives for the completed performance period.
- Determine and approve the CEO’s compensation level based on the Committee’s evaluation of the CEO (the CEO may not be present during voting or deliberation on his or her compensation).
- Determine and recommend to the Board the compensation levels for executive officers of the Company other than the CEO based on the Committee’s evaluations.
- Report to the Board on the performance of the CEO and other executive officers in light of the established company goals and objectives for the performance period.
- Review, modify (if necessary) and approve the Company’s peer companies, if any, and data sources for purposes of evaluating the Company’s compensation competitiveness and establishing the appropriate competitive positioning of the levels and mix of compensation elements.
- Review and advise on compensation of non-employee directors, including committee chairmen compensation. [Review director compensation and make a recommendation to the Board regarding the form and amount of director compensation. The Committee will consider that a director’s independence may be jeopardized if (a) his or her compensation and perquisites exceed customary levels, (b) the Company makes substantial charitable contributions to organizations with which the director is affiliated or (c) the Company enters into consulting contracts with (or provides other indirect forms of compensation to) the director or an organization with which the director is affiliated (directors who are employees of the Company will not receive any additional compensation for service on the Board).]
- Review and approve management’s recommendations with regard to the budget and guidelines for merit-based compensation.
- Review existing cash-based and equity-based compensation plans.
- Approve all new cash-based, equity-based and performance-based compensation plans and all modifications to existing compensation plans.
- Review and approve, or review and recommend to the Board for its approval, any transaction in equity securities of the Company, or derivatives of those equity securities, between the Company and any officer or director of the Company who is subject to the reporting and short-swing liability provisions of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act“), as amended.
- Review, as it deems necessary, appropriate matters related to the Company’s compliance with applicable laws and regulations affecting employee and director compensation and benefits, including, but not limited to, Rule 16b-3, Section 162(m) and Section 13(k) of the Exchange Act.Produce a Compensation Committee Report on executive compensation to be included in the Company’s annual proxy statement as required by the rules and regulations of the Securities and Exchange Commission (the “SEC”).
- Review and discuss with management of the Company the Compensation Discussion and Analysis to be included in the Company’s proxy statements, recommend inclusion of the Compensation Discussion and Analysis in the Company’s proxy statements to the Board and review other material disclosures concerning executive compensation matters.
- Review and recommend to the Board how frequently the Company should permit unitholders to have an advisory vote on executive compensation (“say-on-pay”). This review should take into account the historical results of unitholder advisory votes on the frequency of say-on-pay resolutions at the Company.
- Following each unitholder meeting at which say-on-pay resolutions are proposed for a unitholder advisory vote, the Committee will review the results of the advisory vote, and consider whether to make any adjustments to the Company’s executive compensation policies and practices.
- Ensure that unitholders are given the opportunity to vote on equity-compensation plans, as may be required by law, the LLC Agreement or Corporate Governance Guidelines and the listing standards of the NASDAQ.
- Prepare and recommend to the Board for adoption a clawback policy that complies with applicable rules and regulations, including the rules and regulations of the SEC, and the listing standards of the NASDAQ.
- Review and discuss with management the Company’s disclosure controls and procedures relating to executive compensation matters.
- Review and approve any employment agreements, severance arrangements, change-in-control arrangements or special or supplemental employee benefits, and any material amendments to the foregoing, applicable to executive officers.
- Review new-hire and promotion compensation arrangements for executive officers.
- Administer the Company’s unit plans.
- Grant awards under the unit plans or delegate that responsibility (as it relates to non-executive officer awards) to the CEO and/or one or more executive officers.
- Conduct and review an annual Committee performance evaluation, as administered by the Nominating and Corporate Governance Committee.
- Review and assess the adequacy of this charter annually and recommend any proposed changes to the Board for approval.
- 30. Review areas of particular difficulty in attracting and retaining staff.
- Review and develop succession planning policies and criteria for the Chief Executive Officer and other executive officers of the Company and its subsidiaries, and confer periodically with the Board on succession planning,
- Take any other actions as may be required from time to time by applicable law, the rules of the NASDAQ, the SEC, the LLC Agreement or the Board.
VI. Posting Requirement
The Company will make this Charter available on or through the Company’s website as required by applicable rules and regulations. In addition, the Company will disclose in its Proxy Statement or in its Form 10-K, as applicable, that a copy of this Charter is available on the Company’s website and provide the website address.