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ARTICLE
1
STATUS
The
Compensation Committee is a committee
of the Board of Directors.
ARTICLE
2
DEFINITIONS
The
following definitions shall for
all purposes, unless otherwise clearly
indicated to the contrary, apply
to the terms used in this Compensation
Committee Charter.
“Board”
means the Board of Directors of
the Fund.
“Committee”
means the compensation committee
appointed by the Board.
“Family
member” includes a person’s
spouse, parents, children and siblings,
whether by blood, marriage or adoption,
or anyone residing in such person’s
home.
“Fund”
means NGP Capital Resources Company,
a Maryland corporation.
“Independent”
means that the director:
(a)
Is not currently, and has not been
at any time within the past three
years, employed by the Fund, NGP
Investment advisor, L.P., NGP Administration,
LLC, or Natural Gas Partners, L.L.C.,
or any portfolio company of the
Fund over which the Fund exercises
a controlling influence over management
or policies or of which the Fund
owns beneficially, directly or indirectly,
more than 25% of the voting securities.
(b)
Is not currently, and has not been
at any time within the past three
years, a partner or employee of
a present or former auditor of the
Fund or of an affiliate.
(c)
Is not an executive officer of another
entity where at any time during
the past three years any of the
Fund’s executive officers
serve on the compensation committee
of such other entity.
(d)
Has not accepted any payments from
the Fund or any parent or subsidiary
of the Fund in excess of $60,000
during any period of twelve consecutive
months within the three years preceding
the determination of independence,
other than compensation for board
or board committee service, payments
arising solely from investments
in the Fund’s securities,
or benefits under a tax-qualified
retirement plan or non-discretionary
compensation.
(e)
Is not a partner in, controlling
shareholder or an executive officer
of any organization to which the
Fund made, or from which the Fund
received, payments for property
or services in the current or any
of the past three fiscal years that
exceed 5% of the recipients consolidated
gross revenues for that year, or
$200,000, whichever is more, other
than (i) payments arising solely
from investments in the Fund’s
securities or payments under non-discretionary
charitable contribution matching
programs.
(f)
Does not have a family member in
any of the foregoing five categories.
(g)
Has no material relationship with
the Fund.
(h)
Is not an “interested person,”
as defined in Section 2(a)(19) of
the Investment Company Act of 1940,
of the Fund.
(i)
Is a “Non-employee Director”
for purposes of Rule 16b-3 under
the Securities Exchange Act of 1934.
(j)
Satisfies the requirement of an
“outside director” for
purposes of Section 162(m) of the
Internal Revenue Code.
“No
material relationship” means
that after considering all relevant
facts and circumstances, the Board
of the Fund has affirmatively determined
that the director has no material
commercial, industrial, banking,
consulting, legal, accounting, charitable,
familial, or other relationship
(either directly or as a partner,
shareholder, or officer of an organization
that has a relationship with the
Fund) with the Fund or a portfolio
company of the Fund. Ownership of
shares of the Fund shall not be
a bar to an independence finding.
ARTICLE
3
ORGANIZATION
AND MEMBERSHIP REQUIREMENTS
The
Committee shall be appointed by
the Board and shall be comprised
of at least three directors each
of whom shall be Independent. The
Board will designate one member
of the Committee as its chairperson.
ARTICLE
4
AUTHORITY
The
Committee’s creation and authority
is derived directly from the Board.
The Committee shall have the resources
and authority appropriate to discharge
its responsibilities, including
authority to retain outside legal
counsel or other experts or consultants
to advise the Committee at the expense
of the Fund.
The
Committee may request any officer
or employee of the Fund or the Fund’s
outside legal counsel to attend
a meeting of the Committee or to
meet with any members of, or consultants
to, the Committee.
The
Committee may seek outside expert
advice to support its recommendations
and decisions. The Committee shall
have sole authority to retain and
terminate any consulting firm to
be used to assist in the evaluation
of investment advisor, director,
chief executive officer, or senior
executive compensation, including
sole authority to approve such firm’s
fees and other retention terms.
ARTICLE
5
DUTIES
AND RESPONSIBILITES
The
Committee is directly responsible
for:
(a)
reviewing and approving performance
goals and objectives relative to
the compensation of the Fund’s
investment advisor or, if the Fund
ceases to have a separate investment
adviser and directly compensates
its executive officers, relative
to the compensation of the Fund’s
Chief Executive Officer;
(b)
evaluating the performance of the
Fund’s investment advisor
or Chief Executive Officer, as the
case may be; and
(c)
together with the other independent
directors of the Board, determining
and approving the compensation of
the Fund’s investment advisor
or Chief Executive Officer, as the
case may be, based on the Committee’s
evaluation.
The
Committee shall request and evaluate
such information as the Committee
shall consider to be reasonably
necessary to evaluate the performance
of the Fund’s investment advisor.
In
addition, the Committee:
(a)
if the Fund directly compensates
its officers and employees, makes
recommendations to the Board with
respect to non-CEO compensation,
incentive compensation plans, and
equity-based plans;
(b)
periodically reviews director compensation
and recommends any appropriate changes
to the Board;
(c)
produces a report on the Fund’s
executive compensation practices
and policies for inclusion in the
Fund’s proxy statement if
required by applicable proxy rules
and regulations; and
(f)
makes recommendations to the Board
on the Fund’s executive compensation
practices and polices.
ARTICLE
6
MEETINGS
The
Committee shall meet at least two
times a year. The chairman of the
Committee may call special meetings
at any time. Personal written, personal
telephonic, telegraphic, or facsimile
transmission (confirmed by telephone)
notice of any special meeting of
the Committee shall be given to
each member at least 24 hours prior
to the time of the meeting. Any
member may waive notice of a meeting.
The
Committee shall meet periodically
in separate executive sessions with
management and as a committee to
discuss any matters that the Committee
or any of these persons believe
should be discussed privately.
ARTICLE
7
PROCEDURE;
QUORUM
The
Committee shall choose a chairman,
shall keep regular minutes of its
proceedings and report the same
to the Board when requested, shall
fix its own rules or procedures,
and shall meet at such times and
at such place or places as may be
provided by this charter or such
rules, or by resolution of the Committee,
or resolution of the Board. At every
meeting of the Committee, the presence
of a majority of all the members
shall constitute a quorum and the
affirmative vote of a majority of
the members present shall be necessary
for the adoption by the Committee
of any resolution. Members of the
Committee may participate in a meeting
of the Committee by means of conference
telephone or similar communications
equipment by means of which all
persons participating in the meeting
can hear each other and such participation
shall constitute presence in person
and attendance at such meeting,
except where a person participates
in the meeting for the express purpose
of objecting to the transaction
of any business on the ground that
the meeting is not lawfully called
or convened. If a quorum shall not
be present at any meeting of the
Committee, the members present thereat
may adjourn the meeting from time
to time, without notice other than
the announcement at the meeting,
until a quorum shall be present.
ARTICLE
8
ACTION
WITHOUT A MEETING
Unless
otherwise restricted by the Fund’s
Articles of Incorporation or Bylaws,
any action required or permitted
to be taken at any meeting of the
Committee may be taken without a
meeting if a written consent thereto
is signed by all members of the
Committee and such written consent
is filed with the minutes of proceedings
of the Committee. Such consent shall
have the same force and effect as
a unanimous vote at a meeting.
ARTICLE
9
COMPENSATION
Members
of the Committee shall be paid such
compensation for attending Committee
meetings as shall be set by the
Board from time to time.
ARTICLE
10
ANNUAL
REVIEW
At
least once each year the Committee
and the Board shall:
(a)
Evaluate the performance of the
Committee;
(b)
Review and reassess the adequacy
of this charter and make appropriate
changes; and
(c)
Confirm the independence of the
members of the Committee.
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