GMX Resources Inc.
CHARTER OF COMPENSATION COMMITTEE
(Adopted by the Board on May 27, 2004)
The Compensation Committee shall evaluate and report to the full Board of Directors, the compensation of the officers of the Company to assure that they are compensated effectively in a manner consistent with the overall objectives of the Company, taking into consideration historical compensation levels, internal equity considerations, competitive practice, and any requirements of appropriate regulatory bodies.
The Committee shall consist of two or more "independent directors" as defined in and determined pursuant to the Corporate Governance Rules of the NASDAQ Stock Market, Inc. ("NASDAQ"). The Committee members shall be elected annually by the Board for terms of one year, or until their successors shall be duly elected and qualified. The Board may remove any Committee member at any time. Unless a Committee Chairman is elected by the full Board, the Committee members may designate a Chairman.
The Committee will meet in person at least once a year and at such additional times as may be necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee or the Chief Executive Officer of the Company. All meetings of and other actions by the Committee shall be held and taken pursuant to the Bylaws of the Company, including Bylaw provisions governing notice of meetings and waiver thereof, the number of Committee members required to take actions at meetings and by written consent, and other related matters.
Reports of meetings of and actions taken at meetings or by consent by the Committee since the most recent Board meeting (except to the extent covered in an interim report circulated to the Board) shall be made by the Committee Chairman or his/her delegate to the Board of Directors at its next regularly scheduled meeting following the Committee meeting or action and shall be accompanied by any recommendations from the Committee to the Board of Directors. In addition, the Committee Chairman or his/her delegate shall be available to answer any questions the other Directors may have regarding the matters considered and actions taken by the Committee.
In carrying out its mission, the Committee shall have the following responsibilities and authority (it being understood that the Committee may condition its approval of any compensation decision on Board ratification to the extent required to comply with applicable tax law or SEC Rule 16b-3):
· Annually evaluate the performance and compensation of the Chief Executive Officer and make a recommendation to the Board with respect to the amounts and individual elements of total compensation for the Chief Executive Officer consistent with the Company’s compensation objectives. The Chief Executive Officer may give a report to, and answer questions from, the Compensation Committee relating to his or her performance and compensation, but shall not be present during voting or deliberations.
· Annually evaluate in conjunction with the Chief Executive Officer the performance and compensation of other executive officers and approve the individual elements of total compensation for each such person.
· Periodically evaluate in conjunction with the Chief Executive Officer the terms and administration of the Company’s annual and long-term incentive plans to assure that they are structured and administered in a manner consistent with the Company’s compensation objectives as to participation, annual incentive awards, corporate financial goals, actual awards paid to the Company’s executive officers, and total funds reserved for payment under the compensation plans, if any.
· Periodically evaluate in conjunction with the Chief Executive Officer (and recommend for approval any proposed amendments to) existing equity-related plans and evaluate and recommend for approval the adoption of any new equity-related plans, in each case if any of the Company’s officers or directors may participate in any such plan, and determine when it is necessary (based on advice of counsel) or otherwise desirable: (a) to modify, discontinue or supplement any such plans; or (b) to submit such amendment or adoption to a vote of the Company’s shareholders.
· Perform an annual self-evaluation of the Compensation Committee’s performance and annually reassess the adequacy of and, if appropriate, propose to the Board, any desired changes in, the Compensation Committee’s Charter.
· Perform such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board of Directors of the Company and/or the Chairman of the Board of Directors, or as designated in plan documents.
The Compensation Committee shall have the right to use reasonable amounts of time of the Company’s internal staff and the Company's outside counsel and may, with the approval of the Board, hire independent compensation experts, lawyers and other consultants to assist and advise the Committee in connection with its responsibilities. The Committee shall not be entitled to use the Company's independent accountants for any assistance unless the Audit Committee shall have determined that the rendering of any services is permissible.