Compensation Committee Charter
Adopted by the Board of Directors on
September 23, 2005
The Board of Directors of Abraxas Petroleum Corporation (the "Company") has constituted and established a Compensation Committee (the "Committee") with authority, responsibility and specific duties as described in this Compensation Committee Charter.
The Committee shall consist of directors who qualify as independent directors under the rules and regulations of the exchange(s) on which the Company's securities are listed or quoted and any other applicable laws, rule or regulations and must be free of any relationship that, in the opinion of the Board of Directors, as evidenced by its election of such Committee members, would interfere with the exercise of independent judgment as Committee members.
MISSION STATEMENT AND PRINCIPAL FUNCTIONS
The Committee's primary responsibility is to assure that the senior executives of the Company and its wholly-owned subsidiaries are compensated effectively in a manner consistent with the stated philosophy underlying the development and administration of the Company's annual and long term compensation plans which is to align the interests of management with those of the Company's stockholders. The Committee shall also communicate to stockholders the Company's compensation policies and the principles underlying such policies, as required by the Securities and Exchange Commission. More specifically, the Committee shall be responsible for the following:
Review from time to time and approve the Company's stated compensation strategy to ensure that management is rewarded appropriately for its contributions to Company growth and profitability and that the executive compensation strategy supports organization objectives and stockholder interests.
Annually review, approve and communicate to the Board of Directors and the Chief Executive Officer the corporate goals and objectives relevant to the Chief Executive Officer.
Annually evaluate the performance of the Chief Executive Officer and communicate to him or her and the Board of Directors the results of that evaluation.
Annually review and determine the individual elements of total compensation for the Chief Executive Officer and communicate to the Board of Directors and in the annual Board Compensation Committee Report to stockholders the factors and criteria on which the Chief Executive Officer's compensation is based, including the relationship between the Company's performance and the Chief Executive Officer's compensation. The Chief Executive Officer may not be present during voting or deliberations relating to his compensation.Annually evaluate the Committee's own performance and communicate to the Board of Directors the results of that evaluation.
Review and approve the individual elements of total compensation for the senior management of the Company other than the Chief Executive Officer and communicate in the annual Board Compensation Committee Report to stockholders the relationship between the Company's performance and executive compensation.
Assure that the Company's executive incentive compensation program, including any annual and long-term incentive plans, is administered in a manner consistent with the Company's compensation strategy as to participation, target annual award levels, corporate financial goals, actual awards made to senior management, total funds reserved for payment under compensation plans and shares, options and other forms of incentives reserved and available for issuance under the Company's long term incentive plans.
Approve, subject, where appropriate, to Board of Directors' approval and submission to stockholders, all new equity-related incentive plans for senior management.
Approve, subject to Board of Director approval, annual retainer and meeting fees for members of the Board of Directors and committees of the Board and fix the terms and awards of stock compensation for members of the Board.
Approve revisions to the Company's executive salary range structure, annual salary increase guidelines and review compensation arrangements among members of the Board of Directors.
Review with the Chief Executive Officer matters relating to management succession.
Review the Company's employee benefit programs and approve changes subject, where appropriate, to stockholder or Board of Director approval.
If appropriate, hire experts in the field of executive compensation to assist the Committee with its reviews.
Such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board of Directors of the Company or as designated in plan documents.
The Committee will meet as often as necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee or any member of the Committee. All meetings of the Committee shall be held pursuant to the bylaws of the Company with regard to notice and waiver thereof, and written minutes of each meeting shall be duly filed in the Company records. A majority of the members of the Committee shall constitute a quorum. Reports of meetings of the Committee shall be made to the Board of Directors at its next regularly scheduled meeting following the Committee meeting accompanied by any recommendations to the Board of Directors approved by the Committee.