The Compensation Committee of L&L Energy, Inc. (the “Company”) is appointed by the Board of Directors (the “Board”) to assist the
Board in discharging its responsibilities relating to compensation of the directors and executive officers of the Company.
II. Committee Composition.
The Committee shall be comprised of three members of the Board. The members of the Committee shall satisfy all applicable
requirements then in effect of the NASDAQ, or any stock exchange or national securities association on which the Company’s securities
are listed or quoted and any other applicable regulatory requirements, including without limitation requirements relating to director
independence ("Independence Requirements"), nomination and size of the Committee. In addition, at least two of the Committee members
shall qualify as (1) “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and (2) “outside directors” under the regulations promulgated under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).
The members of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance
Committee and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation,
retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the
Board.
The Chairman of the Compensation must be a non-management member of the Board. The Chairman shall establish an annual calendar
with a proposed agenda of the compensation-related matters to be addressed at each of the Committee's scheduled meetings during the
year. Committee members are expected to make suggestions for agenda items.
III. Delegation of Duties.
The Committee may delegate authority, duties and responsibilities (or functions) to one or more members of the Committee or to the
Company's officers, when appropriate, but no such delegation shall be permitted if the authority is required by law, regulation or listing
standard to be exercised by the Committee as a whole or is otherwise prohibited by law, regulation or listing standard.
IV. Meetings.
The Committee shall meet as often as its members deem necessary to fulfill the Committee’s responsibilities. The presence at a meeting in
person or by telephone of a majority of the members of the Committee or subcommittee, as applicable, shall constitute a quorum for the
transaction of business. The Committee or subcommittee, as applicable, shall act upon the vote of a majority of its members at a duly
called meeting at which a quorum is present. Any action of the Committee, a subcommittee or officer to whom the Committee has
delegated authority may be taken by a written instrument signed by all of the members of the Committee, subcommittee or such officer, as
applicable. The Committee shall have the authority to establish other rules and procedures for notice and conduct of its meetings
consistent with the Company’s bylaws and the Corporate Governance Practices and Policies.
All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote.
Additionally, the Committee may invite to its meetings any director, member of management of the Company and such other persons as it
deems appropriate in order to carry out its responsibilities. However, when necessary, the Committee may meet in executive session
without such other persons present.
V. Powers and Duties.
The following functions shall be the recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this
Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional or substitute
functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal
or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time
related to the purposes of the Committee outlined in Section I of this Charter.
The Committee shall have the following specific powers and duties:
1. To review and approve the Company's overall compensation philosophy and policies for executive officers of the Company and its
subsidiaries generally; to review and approve the compensation, including salary, bonuses and benefits of the executive officers of the
Company other than the Chief Executive Officer ("CEO"); and to review, approve and recommend the compensation of the CEO (including
salary, bonuses and benefits) for approval by the directors serving on the Board who satisfy the Independence Requirements;
2. To review and approve the corporate goals and objectives relevant to the compensation of the CEO, with the primary overall objectives
of the Company's executive compensation program focused on attracting, retaining and motivating the Company''s management and
providing a strong link between executive compensation and performance. The Committee shall oversee and evaluate the performance of
the executive officers in light of their respective goals and objectives, request and obtain detailed information about executive
compensation packages and, based on such review and evaluation, determine and approve the annual salary, bonus, equity grants,
performance-related pay, perquisites, retirement benefits, deferred compensation, tax gross-ups, supplemental executive retirement
plans, severance payments, change-in-control agreements and all other compensation and benefits of the executive officers and, in the
case of the CEO, recommend these compensatory arrangements for approval by the directors serving on the Board who satisfy the
Independence Requirements;
3. To request that management obtain information in order for the Committee to assess executive compensation, including compensation
surveys and studies of the compensation practices of comparable companies;
4. To oversee, review, monitor and make recommendations to the Board with respect to compensation plans, equity-based plans and
plans pertaining to incentive compensation, pensions, benefits and retirement savings and to exercise all the authority of the Board with
respect to the administration and interpretation of such plans;
5. To review and approve all equity- and cash-based awards pursuant to the Company’s plans;
6. To review and approve any employment contract or related agreement, such as a severance arrangement or a supplementary pension,
for any executive officer;
7. To review director compensation, if any, and recommend from time to time to the Board any proposed changes to such compensation;
8. To review periodically the need for a Company policy regarding compensation paid to the Company’s executive officers in excess of
limits deductible under Section 162(m) of the Code;
9. To serve as a counseling committee to the CEO of the Company regarding compensation matters and such other matters as the Board
may from time to time direct;
10. To review the procedures and policies of the Company designed to ensure compliance with applicable laws and regulations relating to
compensation of executive officers and to monitor the results of these compliance efforts;
11. To maintain minutes or other records of meetings and activities of the Committee and to report to the Board following meetings of or
actions taken by the Committee;
12. To have prepared and to review and discuss with management the Company's compensation discussion and analysis disclosure
required by the Securities and Exchange Commission (the "SEC") and, based on this review and discussion, recommend to the Board the
inclusion of such disclosure in the Company's proxy statement or annual report on Form 10-K, in accordance with applicable rules and
regulations promulgated by the SEC, the NASDAQ and other regulatory bodies;
13. To produce a compensation committee report on executive officer compensation as required by the SEC to be included in the
Company's annual proxy statement or annual report on Form 10-K filed with the SEC;
14. To conduct or authorize investigations into any matters within the Committee’s purpose and powers;
15. To review and reassess the powers of the Committee and the adequacy of this Charter periodically and recommend any proposed
changes to the Board for approval;
16. To conduct an annual performance review and evaluation of the Committee; and
17. To consider such other matters in relation to the compensation polices of the Company as the Committee or the Board may, in its
discretion, determine to be advisable.
VI. Committee Resources.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the
Committee deems appropriate. The Committee shall have the authority to retain special legal, accounting or other advisers to advise the
Committee, including without limitation the sole authority to retain and terminate any compensation consulting firm used to assist in the
evaluation of director, CEO or senior executive compensation and the sole authority to approve such firm’s fees and other retention terms.
The Company shall provide for appropriate funding for such counsel or experts retained by the Committee.
VII. Understanding as to the Committee’s Role.
Management of the Company is responsible for the day-to-day operation of the Company’s business. As a result, the Company’s officers
and employees and other persons who may be engaged by the Committee may have more time, knowledge and detailed information
about the Company than do the Committee members. The Committee will review information, opinions, reports or statements presented to
the Committee by the Company’s officers or employees or other persons as to matters the Committee members reasonably believe are
within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the
Company. While the Committee has the responsibilities and powers set forth in this charter, each member of the Committee, in the
performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these experts.
Accordingly, the Committee’s role does not provide any special assurances with regard to matters that are outside the Committee’s area of
expertise or that are the traditional responsibility of management.
Approved as of July 10, 2008
Board in discharging its responsibilities relating to compensation of the directors and executive officers of the Company.
II. Committee Composition.
The Committee shall be comprised of three members of the Board. The members of the Committee shall satisfy all applicable
requirements then in effect of the NASDAQ, or any stock exchange or national securities association on which the Company’s securities
are listed or quoted and any other applicable regulatory requirements, including without limitation requirements relating to director
independence ("Independence Requirements"), nomination and size of the Committee. In addition, at least two of the Committee members
shall qualify as (1) “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and (2) “outside directors” under the regulations promulgated under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).
The members of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance
Committee and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation,
retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the
Board.
The Chairman of the Compensation must be a non-management member of the Board. The Chairman shall establish an annual calendar
with a proposed agenda of the compensation-related matters to be addressed at each of the Committee's scheduled meetings during the
year. Committee members are expected to make suggestions for agenda items.
III. Delegation of Duties.
The Committee may delegate authority, duties and responsibilities (or functions) to one or more members of the Committee or to the
Company's officers, when appropriate, but no such delegation shall be permitted if the authority is required by law, regulation or listing
standard to be exercised by the Committee as a whole or is otherwise prohibited by law, regulation or listing standard.
IV. Meetings.
The Committee shall meet as often as its members deem necessary to fulfill the Committee’s responsibilities. The presence at a meeting in
person or by telephone of a majority of the members of the Committee or subcommittee, as applicable, shall constitute a quorum for the
transaction of business. The Committee or subcommittee, as applicable, shall act upon the vote of a majority of its members at a duly
called meeting at which a quorum is present. Any action of the Committee, a subcommittee or officer to whom the Committee has
delegated authority may be taken by a written instrument signed by all of the members of the Committee, subcommittee or such officer, as
applicable. The Committee shall have the authority to establish other rules and procedures for notice and conduct of its meetings
consistent with the Company’s bylaws and the Corporate Governance Practices and Policies.
All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote.
Additionally, the Committee may invite to its meetings any director, member of management of the Company and such other persons as it
deems appropriate in order to carry out its responsibilities. However, when necessary, the Committee may meet in executive session
without such other persons present.
V. Powers and Duties.
The following functions shall be the recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this
Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional or substitute
functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal
or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time
related to the purposes of the Committee outlined in Section I of this Charter.
The Committee shall have the following specific powers and duties:
1. To review and approve the Company's overall compensation philosophy and policies for executive officers of the Company and its
subsidiaries generally; to review and approve the compensation, including salary, bonuses and benefits of the executive officers of the
Company other than the Chief Executive Officer ("CEO"); and to review, approve and recommend the compensation of the CEO (including
salary, bonuses and benefits) for approval by the directors serving on the Board who satisfy the Independence Requirements;
2. To review and approve the corporate goals and objectives relevant to the compensation of the CEO, with the primary overall objectives
of the Company's executive compensation program focused on attracting, retaining and motivating the Company''s management and
providing a strong link between executive compensation and performance. The Committee shall oversee and evaluate the performance of
the executive officers in light of their respective goals and objectives, request and obtain detailed information about executive
compensation packages and, based on such review and evaluation, determine and approve the annual salary, bonus, equity grants,
performance-related pay, perquisites, retirement benefits, deferred compensation, tax gross-ups, supplemental executive retirement
plans, severance payments, change-in-control agreements and all other compensation and benefits of the executive officers and, in the
case of the CEO, recommend these compensatory arrangements for approval by the directors serving on the Board who satisfy the
Independence Requirements;
3. To request that management obtain information in order for the Committee to assess executive compensation, including compensation
surveys and studies of the compensation practices of comparable companies;
4. To oversee, review, monitor and make recommendations to the Board with respect to compensation plans, equity-based plans and
plans pertaining to incentive compensation, pensions, benefits and retirement savings and to exercise all the authority of the Board with
respect to the administration and interpretation of such plans;
5. To review and approve all equity- and cash-based awards pursuant to the Company’s plans;
6. To review and approve any employment contract or related agreement, such as a severance arrangement or a supplementary pension,
for any executive officer;
7. To review director compensation, if any, and recommend from time to time to the Board any proposed changes to such compensation;
8. To review periodically the need for a Company policy regarding compensation paid to the Company’s executive officers in excess of
limits deductible under Section 162(m) of the Code;
9. To serve as a counseling committee to the CEO of the Company regarding compensation matters and such other matters as the Board
may from time to time direct;
10. To review the procedures and policies of the Company designed to ensure compliance with applicable laws and regulations relating to
compensation of executive officers and to monitor the results of these compliance efforts;
11. To maintain minutes or other records of meetings and activities of the Committee and to report to the Board following meetings of or
actions taken by the Committee;
12. To have prepared and to review and discuss with management the Company's compensation discussion and analysis disclosure
required by the Securities and Exchange Commission (the "SEC") and, based on this review and discussion, recommend to the Board the
inclusion of such disclosure in the Company's proxy statement or annual report on Form 10-K, in accordance with applicable rules and
regulations promulgated by the SEC, the NASDAQ and other regulatory bodies;
13. To produce a compensation committee report on executive officer compensation as required by the SEC to be included in the
Company's annual proxy statement or annual report on Form 10-K filed with the SEC;
14. To conduct or authorize investigations into any matters within the Committee’s purpose and powers;
15. To review and reassess the powers of the Committee and the adequacy of this Charter periodically and recommend any proposed
changes to the Board for approval;
16. To conduct an annual performance review and evaluation of the Committee; and
17. To consider such other matters in relation to the compensation polices of the Company as the Committee or the Board may, in its
discretion, determine to be advisable.
VI. Committee Resources.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the
Committee deems appropriate. The Committee shall have the authority to retain special legal, accounting or other advisers to advise the
Committee, including without limitation the sole authority to retain and terminate any compensation consulting firm used to assist in the
evaluation of director, CEO or senior executive compensation and the sole authority to approve such firm’s fees and other retention terms.
The Company shall provide for appropriate funding for such counsel or experts retained by the Committee.
VII. Understanding as to the Committee’s Role.
Management of the Company is responsible for the day-to-day operation of the Company’s business. As a result, the Company’s officers
and employees and other persons who may be engaged by the Committee may have more time, knowledge and detailed information
about the Company than do the Committee members. The Committee will review information, opinions, reports or statements presented to
the Committee by the Company’s officers or employees or other persons as to matters the Committee members reasonably believe are
within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the
Company. While the Committee has the responsibilities and powers set forth in this charter, each member of the Committee, in the
performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these experts.
Accordingly, the Committee’s role does not provide any special assurances with regard to matters that are outside the Committee’s area of
expertise or that are the traditional responsibility of management.
Approved as of July 10, 2008
Charter-Compensation Committee
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| L&L ENERGY, INC. |