- W. Richard Anderson
- Bruce W. McCullough
- Loren Singletary
VANGUARD NATURAL RESOURCES, LLC
AMENDED AND RESTATED CONFLICTS COMMITTEE CHARTER
OF THE BOARD OF DIRECTORS
ADOPTED OCTOBER 30, 2013
The Board of Directors (the “Board“) of Vanguard Natural Resources, LLC (the “Company“) has established the Conflicts Committee (the “Committee“) as a standing committee of the Board.
The Committee’s primary purpose is to carry out the duties as set forth in the Third Amended and Restated Limited Liability Company Agreement, as may be amended or restated from time to time (the “LLC Agreement“), of the Company as well as other duties delegated by the Board that relate to conflicts of interests between any Affiliate of the Company (excluding the Company and any Group Member), on the one hand, and the Company or any Group Member, on the other. The Committee shall also advise the Board on actions to be taken by the Company or matters related to the Company upon request of the Board.
III. Certain Definitions
Capitalized terms not otherwise defined herein shall have the meaning as set forth in the LLC Agreement.
IV. Committee Membership
The Committee shall be composed entirely of one or more Independent Directors, each of whom (a) is not an Officer or employee of the Company or any Subsidiary of the Company, (b) is not a manager, director, officer or employee of any Affiliate of the Company, (c) is not a holder of any ownership interest in the Company Group other than Units and (d) meets the independence standards and other standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder and by the National Securities Exchange on which the Common Units are listed or admitted to trading.
The members of the Committee shall be appointed by the Board. Committee members may be replaced by the Board. Any vacancy on the Committee shall be filled by, and any member of the Committee may be removed without cause by, an affirmative vote of a majority of the Board. 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.
V. Committee Authority and Responsibilities
The Committee shall act on an informed basis, in good faith, and in the honest belief that any action taken by the Committee is in the best interests of the Company. In the Committee’s determination of what is “fair and reasonable” to the Company and in connection with the Committee’s resolution of any conflict of interest, the Committee is authorized to consider (a) the relative interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (b) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (c) any applicable generally accepted accounting practices or principles; and (d) such additional factors as the Committee determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances.
The Committee is delegated all authority of the Board as may be required or advisable to fulfill the purposes of the Committee. The Committee has the authority to engage consultants, attorneys, independent accountants and other service providers (together, “Consultants,” and each a “Consultant“) to assist in the evaluation of conflicts matters. The Committee shall have sole authority to retain and terminate any such Consultants, including sole authority to approve the Consultant’s fees and other retention terms. The Committee may form, and delegate some or all of its authority to, subcommittees when it deems appropriate.
With respect to any contribution of assets to the Company in exchange for Company Securities, the Committee, in determining whether the appropriate number of Company Securities are being issued, may take into account, among other things, the fair market value of the assets, the liquidated and contingent liabilities assumed, the tax basis in the assets, the extent to which tax-only allocations to the transferor will protect the existing members of the Company against a low tax basis, and such other factors as the Committee deems relevant under the circumstances. Without limiting the generality of the preceding statements, the Committee’s specific responsibilities include, but are not limited to, seeking the approval of any resolution of a conflict of interest between any Affiliate of the Company (excluding the Company and any Group Member), on the one hand, and the Company or any Group Member, on the other. The Committee shall report the results of its consideration of any such conflict of interest to the Board. Any such approval shall constitute Special Approval of such matter and no other action of the Board shall be required to approve such matter.
- Meetings. The Committee shall meet at the call of the Chairman, two or more members of the Committee, or the Chairman of the Board. Meetings may, at the discretion of the Committee, include members of the Company’s management, independent consultants, and such other persons as the Committee or the Chairman may determine. The Committee may meet in person, by telephone conference call, or in any other manner in which the Board is permitted to meet under law or the LLC Agreement. The Committee shall keep such records of its meetings as it deems appropriate.
- Quorum and Approval. A majority of the members of the Committee shall constitute a quorum. The Committee shall act on the affirmative vote of a majority of members present at a meeting at which a quorum is present. The Committee may also act by unanimous written consent in lieu of a meeting. Any action taken by unanimous written consent in lieu of a meeting shall be deemed to have occurred when the last member of the committee executing such consent shall have signed the consent.
- Rules. The Committee may determine additional rules and procedures, including designation of a chairman pro tempore in the absence of the Chairman and designation of a secretary to the Committee at any meeting thereof.
- Reports. The Committee shall maintain minutes of its meetings and make regular oral or written reports to the Board, directly or through the Chairman.
- Review of Charter. Each year the Committee shall review the need for changes in this Charter and recommend any proposed changes to the Board for approval.
- Performance Review. Each year the Committee shall review and evaluate its own performance and shall submit itself to the review and evaluation of the Board.
- Fees. Each member of the Committee shall be paid the fee set by the Board for his or her services as a member of, or Chairman of, the Committee. Committee members, including the Chairman, will be reimbursed for all reasonable expenses incurred in connection with their duties as Committee members or as Chairman.
VII. Posting Requirement
The Company shall make this Charter available on or through the Company’s website as required by applicable rules and regulations. In addition, the Company shall disclose in its proxy statement for its annual meeting of unitholders or in its Annual Report on Form 10-K, as applicable, that a copy of this Charter is available on its website and provide the website address.