BLUEKNIGHT ENERGY PARTNERS G.P., L.L.C.
COMPENSATION COMMITTEE CHARTER
Revised: March 9, 2010
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Blueknight Energy Partners G.P., L.L.C. (together with its affiliates and subusidiaries, including Blueknight Energy Partners, L.P., the “Company”) will assist the Board in discharging its responsibilities relating to compensation of the Company’s executive officers, including the named executive officers (as defined in Item 402(a)(3) of Regulation S-K), and the members of the Board. The Compensation Committee has overall responsibility for approval, evaluation and oversight of all compensation plans, policies and programs of the Company.
The Committee shall consist of no fewer than two members. The members of the Committee (a) may not be officers or employees of the Company or directors, officers, or employees of the Company’s affiliates and (b) must meet the independence standards established by the NASDAQ Marketplace Rules (or any other exchange upon which Blueknight Energy Partners, L.P.’s securities are traded, if applicable) and the Securities Exchange Act of 1934, as amended, to serve on an audit committee of a board of directors. The Board shall appoint the members of the Committee. The Board shall also have the power to replace any of the members of the Committee. The Board shall appoint one member of the Committee as the Chair of the Committee.
The Committee shall meet at such times and with such frequency as it determines to be necessary or appropriate, or as meetings may be called by the Chair of the Committee, any two members of the Committee or the Chairman of the Board, if any. The Committee may invite members of management or others to attend meetings and/or to furnish pertinent information. The Committee shall also meet in executive session. The Chair of the Committee shall be responsible for scheduling meetings of the Committee, determining the agendas for meetings (following consultation, as the Chair considers appropriate, with other members of the Committee and with management), presiding over meetings of the Committee and coordinating reporting to the Board. In the absence of the Chair, the majority of the members of the Committee present at a meeting shall appoint a member to preside at the meeting.
Committee Authority and Responsibilities
1. The Committee shall review and discuss with management the Compensation Discussion and Analysis (“CD&A”) required by Item 402 of Regulation S-K (or any successor rule or regulation) to be included in the Company’s annual report on Form 10-K (the “Form 10-K”) or other applicable filing with the Securities and Exchange Commission (the “SEC”) and determine whether to recommend to the Board that the CD&A, in the form prepared by management, be included in the Company’s Form 10-K or other applicable SEC filing. The Committee shall also be responsible for producing an annual Compensation Committee Report for inclusion in the Company’s Form 10-K or other applicable SEC filing, which shall state whether (a) the Committee reviewed and discussed the CD&A with management and (b) based on such review and discussion, the Committee recommended to the Board that the CD&A be included in the Company’s Form 10-K or other applicable SEC filing, or such other statements as are then required pursuant to applicable SEC rules and regulations.
2. The Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of senior executive compensation and shall have sole authority to approve the consultant’s fees and other retention terms. The Committee shall have the authority to cause the Company to pay the fees and expenses of such consultants. The Committee shall also have authority to obtain advice and assistance from internal or external human resource, legal, accounting or other advisors.
3. The Committee shall annually review and approve general compensation policies of the Company with respect to all officers, including each of the named executive officers and other key executives and directors.
4. The Committee shall annually review and approve the Company’s goals and objectives relevant to the compensation of the senior executives (including the named executive officers), shall evaluate the senior executives’ performance in light of these goals and objectives and shall approve the compensation levels of the senior executives based on this evaluation.
5. The Committee shall annually review and make recommendations to the Board, for the senior executives, including each of the named executive officers, of the Company:
(a) the annual base salary level;
(b) awards under other incentive compensation plans and equity-based plans, including under any long-term incentive plan;
(c) employment agreements, severance arrangements, and change in control agreements/provisions, in each case as, when and if appropriate;
(d) any special or supplemental benefits; and
(e) any promotions of senior executives.
In determining the long-term incentive component of any compensation of the senior executives of the Company, including the chief executive officer and the other named executive officers, the Committee should consider the Company’s performance and relative unitholder return, the value of similar incentive awards to senior executives at comparable companies and such other factors that the Committee deems relevant.
6. The Committee may form and delegate authority to subcommittees when appropriate.
7. The Committee shall make regular reports to the Board and keep records of its meetings.
8. The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Compensation Committee shall annually review its own performance.
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. With respect to consultants retained to assist in the determination or evaluation of director, CEO or named executive officer compensation, this authority shall be vested solely in the Committee.