WARREN RESOURCES, INC.

 

COMPENSATION COMMITTEE CHARTER

 

 

The Compensation Committee (the "Committee") shall report to the Board of Directors of Warren Resources, Inc. (the “Company”) on the Committee's final decisions regarding the implementation (or establishment) of the compensation programs adopted by the Committee for the Company’s officers, directors, employees and consultants, as well as contracts for management services, if any. The Committee shall take such other actions as directed by the Board of Directors in addition to the actions described in this Charter.

Membership of the Committee 

 

·         The Committee shall be composed of at least three directors, all of whom are not executives or employees of the Company.

 

·         The Committee shall be composed solely of individuals unrelated to and not subject to the control of any “disqualified individual” as defined by Section 4958 of the Internal Revenue Code

 

Meetings of the Committee

 

·         The Committee shall meet at least two times a year, except as otherwise determined by the Chair.

 

·         The Committee shall report at least annually to the Board of Directors or as otherwise determined by the Chair.

 

    

Key Responsibilities of the Committee

 

·         The Committee shall be responsible for establishing the policy and its application with respect to compensation paid by or on behalf of the Company to its directors, officers, executives, top administrative staff and contract management services and the awarding and granting of stock options, restricted stock, stock appreciation rights and any other stock based compensation authorized under any stock option or stock incentive plan of the Company. The Committee shall, from time to time, review and approve, as necessary, the design and administration of all compensation programs applicable to its directors, officers, executives, top administrative staff and contract management services, and all modifications thereto. This review and approval shall include:

 

(i)                   review and approval of the terms of the employment or management services agreement by and between the Company and any person or entity, which agreement is for the purpose of obtaining executives and/or top administrative staff services for the Company, and which review may include, as the Committee determines to be necessary, review and approval of any underlying employment agreement between such management company and individuals who will be performing such management services on behalf of the Company through such management company agreement;

 

(ii)                 approval of base  salaries for the Chief Executive Officer, the President and the Executive Vice President of the Company;

 

(iii)                review and approval of the terms of any annual and/or long term incentive or bonus plans in which any executive or top administrative staff of the Company participates, including, but not limited to, review and approval of performance goals, thresholds for bonuses, maximum bonuses and operating, qualitative and other targets applicable to such incentive or bonus plans;

 

(iv)                approval of incentive award payouts under or on behalf of such programs;

 

(v)                  approval of the terms of all other employment contracts and compensation and benefit plans applicable to or on behalf of executives or top administrative staff except to the extent the authority to do such has been delegated by the Committee to the Chief Executive Officer, the President and Executive Vice President of the Company;

 

(vi)                the awarding and granting of stock options, restricted stock, stock appreciation rights and any other stock based compensation authorized under any stock option or stock incentive plan of the Company, and

 

(vii)               monitoring the application and ongoing operations of all compensation and benefit plans in which executives and top administrative staff participate whether through management contract or not.

 

·         The Committee shall be responsible for reviewing management organization and establishing a management development and succession planning policy including process. The Committee shall approve appraisal and development actions applicable to key executives including the Chief Executive Officer, the President, the Executive Vice President and other key executives and top administrative staff, as it deems appropriate. The Committee shall also have responsibility to review and approve key executive and top administrative staff succession candidates along with related developmental plans, and participate in the executive and top administrative staff recruitment process as necessary and appropriate.

 

·         The Committee, in the exercise of its business judgment, shall obtain and rely upon appropriate market compensation and other data prepared by independent third parties as to comparability and shall document the basis for all relevant determinations in its formal minutes.

 

·         To assist in the performance of its duties and responsibilities the Committee may retain and rely upon such competent advisors and counsel as it may deem appropriate.

 

·         The Committee will assure that the policies which it adopts and implements are in compliance with applicable laws and regulations.