Corporate Governance Guidelines
Sanchez Energy Corporation
The Board of Directors (the "Board") of Sanchez Energy Corporation (the "Company") has adopted these Corporate Governance Guidelines (these "Guidelines") to provide an effective framework for the functioning of the Board and its committees. These Guidelines are not intended to bind the Board in any particular circumstance or to affect the Board's obligations or authority under the Bylaws of the Company (the "Bylaws") or applicable laws and regulations. These Guidelines are subject to amendment from time to time by the Board.
Director Independence and Qualifications
A majority of the directors of the Board will be “independent” in accordance with the listing standards of the New York Stock Exchange (the “NYSE”). Board members have an affirmative obligation to inform the Chief Executive Officer promptly of changes in their circumstances or any transactions or relationships that may impact their designation by the Board as “independent.” The Board will annually review and determine the independence of each director. In making its determination, the Board will carefully consider all facts and circumstances it deems relevant to the determination.
The function of the Board is to provide guidance to and controls on the activities of the Company, in the exercise of the business judgment of each individual director. In discharging that obligation, directors should be entitled to rely reasonably on the honesty and integrity of their fellow directors and the senior management of the Company and its outside advisors and auditors.
The Board shall hold regularly scheduled meetings at least four times per year. Additional meetings may be scheduled as necessary or appropriate in light of circumstances. The Chief Executive Officer will prepare an annual schedule of meetings for the Board and the standing committees. To the extent practicable, the schedule shall reflect agenda subjects that are generally of a recurring nature and are expected to be discussed during the year in question.
The Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. Subject to applicable rules and regulations, the Board may add new committees or remove existing committees as it deems advisable in the fulfillment of its responsibilities. Each committee will perform its duties as assigned by the Board in compliance with the Bylaws and such committee’s charter.
Standards of Conduct
The Board shall adopt and maintain a Code of Business Conduct and Ethics (the “Code”) for the directors, officers and employees of the Company in compliance with the requirements of the NYSE. The Code shall be posted on the Company’s website and shall be reviewed and updated periodically by the Board. Each director shall act at all times in accordance with the requirements of the Code.
The Board will determine annually the form and amount of director compensation. Directors who are employees of the Company or its affiliates will not be separately compensated for their services as directors. The Board will take into consideration the responsibilities of the directors and fees and other forms of compensation being paid by other companies comparable to the Company. The Board will consider that directors’ independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which a director is affiliated, or if the Company enters into consulting contracts with or provides other indirect forms of compensation to a director or an organization with which the director is affiliated.
Director Interaction with External Constituencies
The Board believes that the management speaks for the Company. Individual directors may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. However, it is expected that Board members would do this with the knowledge of management and, absent unusual circumstances or as contemplated by the charters of the committees of the Board, only at the request of management. If comments from the Board are appropriate, they should, in most circumstances, come from the Chairman of the Board.
Director Access to Officers, Employees and Other Advisors
Directors are encouraged to keep themselves informed with respect to the Company and its operations. Directors will have full and free access to officers, employees and books and records of the Company. Any meetings or contacts that a director wishes to initiate may be arranged through the Chief Executive Officer or made directly by the director. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company and will, to the extent appropriate, copy the Chief Executive Officer on any written communications (including e-mail) between a director and an officer or employee of the Company. The Board also welcomes regular attendance at each Board meeting by senior officers of the Company. To the extent they consider it necessary and appropriate, directors also will have access to the Company’s independent advisors using the same procedures.
Communication with the Board
Any stockholder or interested parties may contact an individual director, the Board as a group, or a specified Board committee, including the independent directors, by submitting a communication in an envelope marked “Confidential” addressed to the relevant member(s) of the Board, c/o the Secretary, at the following address:
Director Orientation and Continuing Education
Each new director should participate in an orientation program, which should be conducted as soon as reasonably practicable after the meeting at which a new director is elected or appointed, as applicable. The orientation will include presentations by senior management to familiarize new directors with the Company’s business and strategic plans, significant financial, accounting and risk management issues, compliance programs, the Code, Board procedures, principal officers and internal and independent auditors. The Company will facilitate the participation of directors in relevant continuing education programs. All directors are invited to participate in the orientation and continuing education programs
Chief Executive Officer Evaluation; Management Succession
The Board will conduct an annual review of the Chief Executive Officer’s performance to ensure that the Chief Executive Officer is providing appropriate leadership for the Company in the long- and short-term.
Annual Performance Evaluation
The Board will conduct an annual self-evaluation to determine whether the Board and its committees are functioning effectively.
Conflicts with Agreements
These Guidelines are in addition to and are not intended to and shall not change or interpret any federal or state law or regulation, including Delaware General Corporation Law, or the charter documents of the Company. These Guidelines shall in no way alter, amend or repeal any provision of the Bylaws. To the extent that these Guidelines conflict with any provision of the Bylaws, the provisions contained in the Bylaws shall govern.
The Board does not believe it should limit the number of terms for which an individual may serve as director. Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience with, and understanding of, the Company’s history, policies and objectives. However, to ensure that the Board remains composed of experienced and effective members, the Board will evaluate the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term.
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