Compensation Committee Charter
The purpose of the Compensation Committee (the "Committee") of the Board of Directors of FNB Bancorp (the "Company") and First National Bank of Northern California (the "Bank") is to assist in discharging the Board's responsibilities relating to compensation for directors, officers, and key management personnel of the Company and the Bank. The Committee shall have the authority and responsibilities described below.
The Committee shall be composed of not less than three (3) members who shall be selected by the Board of Directors from its own members, none of whom shall be an officer or employee of the Company or the Bank, and who shall hold office at the pleasure of the Board of Directors. Each Committee member shall be an "outside director" for the purpose of Section 162(m) of the Internal Revenue Code and a "non-employee director" for the purpose of Rule 16b-3 of the Securities Exchange Act of 1934. The Committee shall elect its own chairperson.
Responsibilities and Duties:
The Committee is charged with the responsibility for overseeing the Company's compensation philosophy and for determining that the directors, officers, and key management personnel of the Company are compensated with salary, supplemental and incentive compensation, and benefits that are equitable, competitive, and consistent with such philosophy.
The Committee shall:
Review, evaluate, and set the compensation of, and benefits provided to, the Company's executive officers at least annually, and report to the Board of Directors concerning its evaluation Three members of Executive Management also serve on the Board of Directors of the Company and the Bank and all three abstain from the executive compensation decisions made by the Board of Directors. Thomas C. McGraw is Chief Executive Officer of the Company and the Bank; Jim D. Black is President of the Company and the Bank; and Anthony J. Clifford is Executive Vice President and Chief Operating Officer of the Company and the Bank.
- The Compensation Committee will review compensation plans to insure conformity with Treasury requirements at least semiannually so long as the Company has issued and outstanding Preferred Stock that is owned by the U. S. Department of the Treasury. Without limiting the foregoing, the Committee shall review and approve corporate goals and objectives relevant to the compensation of the Senior Executive Officers, evaluate the performance of the Senior Executive Officers in light of those goals and objectives, and set the level of the Senior Executive Officer's compensation based on that evaluation. In determining the long-term incentive component of the Senior Executive Officer's compensation levels, the Committee will consider the Company's performance and relative shareholder return, the effectiveness of risk management strategies utilized during the year, the value of similar incentives to the Senior Executive Officers of comparable companies, and the awards given to the Chief Executive Officer in prior years.
- Administer the Company's executive incentive plans, the Salary Continuation Plan, the Bank and the Company's Deferred Compensation Plan, the Bank and the Company's qualified retirement plan and the Company's stock option plans.
- Review and advise on: (i) general salary, (ii) employee benefits, and (iii) all matters of compensation with the Company's and the Bank's management.
- Evaluate annually the Compensation Policy to ensure that there are no incentives for short term performance gains at the expense of the long-term benefits of the bank or that provide incentives to manipulate earnings.
- Review and recommend compensation to be paid to the Company's directors.
- Prepare an annual report of executive compensation for inclusion in the Company's proxy statement.
- Review compliance with applicable rules and regulations relating to compensation including those of the Securities and Exchange Commission, the Internal Revenue Service, the OCC, and the U.S. Department of the Treasury.
- The Committee shall have the sole authority, at the expense of the Company, to engage, review, and terminate any legal or consulting firm to advise the Committee in evaluating compensation of the Company's directors and executive officers and to approve any such firm's fees and other retention terms. The Committee may request any officer or employee of the Company, or the Company's outside counsel, or other consultants to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
- The Committee shall: (a) produce a compensation committee report on executive officer compensation as required by the SEC to be included in the listed company's annual proxy statement or annual report on Form 10-K with the SEC; and (b) produce a certification on the incentive compensation arrangements for its senior executive officers as required by the Treasury Department of the United States to be included in the Company's annual proxy statement as long as the Treasury holds Preferred Stock issued by the Company in the Troubled Asset Relief Program of the Emergency Economic Stabilization Act of 2008.
- Conduct an evaluation of its own performance annually.
- Review and reassess the adequacy of this Charter at least annually and submit any changes to the Board of Directors for approval.
The Committee may form and delegate authority to subcommittees when it deems it appropriate.
- The Committee shall hold at least two meeting each year and others as the Committee or its Chairperson determines.
- The Committee's Chairperson, the Chairman of the Board, the Chief Executive Officer, the President, or a majority of the Committee's members may call a meeting of the Committee at any time and at any place they deem it to be proper for the transaction of the Committee's business.
- A majority of the Committee's members shall constitute a quorum. The acts of a majority of the members present at a meeting at which a quorum is present shall constitute action by the Committee.
- Committee members may participate in Committee meetings in person, by conference telephone, or by any other appropriate facility.
- A report of all Committee meetings will be provided to the Board of Directors at a subsequent meeting. Minutes of all Committee meetings will be taken and maintained.
- The Committee may adopt rules and procedures for the conduct of its affairs that it deems necessary and which are consistent with this Charter and the Company's Bylaws.
The Committee also shall perform such other functions as it deems appropriate from time-to-time with respect to, and within the scope of, its specified duties and responsibilities or such other duties as the Board of Directors may assign to it from time to time.