Amended and Restated Effective as of August 1, 2014
1. Purpose. The primary purpose of the Organization and Compensation Committee (the “Committee”) of Jacksonville Bancorp, Inc. (the “Company”) is to develop and oversee the implementation of the Company’s philosophy with respect to the compensation of key employees. The Committee shall have the overall responsibility for (i) determining the compensation of the Company’s Chief Executive Officer and all other Executive Officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Act”)) of the Company; and (ii) designing, approving, and evaluating the executive compensation plans, policies and programs on behalf of the Board of Directors of the Company (the “Board”).
2. Membership. The Committee shall consist of a minimum of three (3) directors, each of whom must be an independent director as defined by the Board in accordance with all applicable laws, rules, regulations and listing standards, including the listing standards of the Nasdaq Stock Market, Section 162(m) of the Internal Revenue Code, and Rule 16b-3 under the Act.
3. Appointment. The Board shall appoint the members of the Committee at the annual meeting of the Board.
4. Vacancy. In the event a vacancy occurs on the Committee prior to the annual meeting of the Board, the Board shall appoint a member to fill such vacancy at such time.
5. Qualification. In appointing members to serve on the Committee, the Board shall consider (a) the business and professional experience and background of the member, (b) the member’s knowledge of and familiarity with executive compensation matters, (c) the member’s understanding of the business and operations of the Company, and (d) any other criteria or factors that the Board, in its discretion, shall deem to be relevant to the purpose and the fulfillment of the duties and responsibilities of the Committee.
6. Term. The Board shall determine, in its discretion, the term of membership of the Committee.
7. Chair. Unless the Board elects a Chair of the Committee, the Committee may, in its discretion, designate a Chair by an affirmative vote of the majority of the members of the Committee.
8. Resignation; Removal. Any Committee member may resign from the Committee upon notice to the Chair of the Board. The Board may remove any member of the Committee at any such time the Board determines, in its reasonable judgment, that (a) such member no longer meets the qualification standard set forth in Section 5 of this Charter, or (b) it is in the best interest of the Company or its shareholders to remove such member from the Committee.
9. Meetings. The Committee shall meet at least twice annually or more frequently, as may be necessary or appropriate to carry out its responsibilities. Meetings may be called by the Chair of the Committee, by any two members of the Committee or by the Chair of the Board. All meetings of the Committee shall be held pursuant to the bylaws of the Company with regard to notice and waiver thereof, and written minutes of each meeting shall be duly filed in the Company records. Reports of meetings of the Committee shall be made to the Board at its next regularly scheduled meeting following the Committee meeting and shall be accompanied by any recommendations to the Board approved by the Committee.
10. Quorum. A majority of the members of the Committee will constitute a quorum for the transaction of business. The Committee may act by unanimous written consent in accordance with applicable law.
11. Conflict. If at any time during the exercise of his or her duties on behalf of the Committee, a Committee member has a direct conflict of interest with respect to an issue subject to determination or recommendation by the Committee, such Committee member shall abstain from participation, discussion and resolution of the instant issue, and the remaining members of the Committee shall advise the Board of their recommendation on such issue. The Committee shall be able to make determinations and recommendations even if only one (1) Committee member is free from conflicts of interest on a particular issue.
12. Evaluation. The Board shall perform and conduct an annual performance evaluation of the Committee to determine and assess whether the Committee is fulfilling all of its duties and responsibilities hereunder and under all applicable laws, rules, regulations and listing standards.
13. Duties and Responsibilities. The Committee shall have the duty and the responsibility to perform the following:
(a) Review and approve the Company’s goals and objectives with respect to the compensation of the Chief Executive Officer of the Company;
(b) Evaluate the job performance of the Chief Executive Officer in light of the Company’s goals and objectives;
(c) Establish and determine, in executive session, the compensation level, including all base salary, bonus, stock option and long-term compensation, of the Chief Executive Officer;
(d) Establish and determine, in consultation with the Chief Executive Officer, as determined in the reasonable judgment of the Committee, the compensation levels of the Executive Officers of the Company, including all base salary, bonus pay, stock option grants and other compensation of the Executive Officers;
(e) Approve grants of stock options, restricted stock, performance shares, stock appreciation rights, and other equity based incentives under and administer the Company’s equity-based compensation plans as provided under such plans;
(f) Make its independent perspective available to management for consultation in respect of the Company’s policies with regard to major issues of compensation;
(g) Review with management and recommend to the Board the adoption of all new employee benefits plans, and any additions, deletions or modifications to the Company’s employee benefit plans;
(h) Make recommendations to the Board regarding the amount of the Company’s contribution(s), if any, to the Company’s employee benefit plans;
(i) Review on a periodic basis the operation of the Company’s executive compensation plans to determine whether they are properly coordinated;
(j) Make recommendations to the Board regarding expense reimbursement policies of the Company;
(k) Prepare, over the names of the Committee members, the required Compensation Committee Report for the Company’s proxy statement required for the Company’s annual meeting of shareholders;
(l) Review the description of the Committee’s processes and procedures for the consideration and determination of executive compensation to be included in the Company’s annual proxy statement or annual report on Form 10-K filed with the SEC, including the description of the role of any compensation consultant whose role is required to be identified in the Company’s annual proxy statement or annual report on Form 10-K, and the description of whether the work of any such consultant has raised any conflict of interest, and if so, the nature of the conflict and how the conflict is being addressed;
(m) Consider, in connection with the offering of a shareholder advisory vote on the frequency (“say-on-frequency” vote) of the shareholder advisory vote on the compensation of the Company’s named executive officers as disclosed in the Company’s annual proxy statement or annual report on Form 10-K (“say-on-pay” vote), whether the Board should make a recommendation to the Company’s shareholders regarding such frequency and, if so, recommend to the Board the frequency that should be recommended to the Company’s shareholders;
(n) Consider the results of the say-on-frequency vote and whether the Company should adopt a policy of holding say-on-pay votes that is consistent with the majority or plurality of votes cast, and make a recommendation to the Board regarding the same, within any time period required by the SEC for disclosure of the policy;
(o) Consider the results of the say-on-pay vote and determine what adjustments, if any, are necessary or appropriate for the Company to make to its compensation policies and practices in light of such vote;
(p) Monitor the development of new regulatory requirements by the SEC or the Nasdaq Stock Market and new or revised proxy voting policies or guidelines of proxy advisory firms and relevant institutional investors impacting executive compensation and the Committee’s constitution and functions and to develop and oversee any policies or take any other actions deemed necessary or advisable to comply with such requirements or address such new or revised policies or guidelines;
(q) Review and update this Charter periodically, at least annually, as may be necessary or appropriate and recommend to the Board any appropriate extensions or changes in the duties of the Committee;
(r) Report, on a periodic basis, to the Board regarding compliance with this Charter, the activities of the Committee and any issues with respect to the duties and responsibilities of the Committee; and
(s) Perform any other activities consistent with this Charter, the Company’s Bylaws and all applicable laws and listing standards, as the Committee deems necessary or appropriate.
The Chief Executive Officer may not be present during voting or deliberations on his or her compensation.
The Committee may retain one or more compensation consultants or other advisors to assist the Committee with these duties. In addition, the Committee shall have available to it such support personnel, including management staff, outside auditors, attorneys and consultants as it deems necessary to discharge its responsibilities. Before retaining or obtaining the advice of a compensation consultant, the Committee shall consider whether the consultant’s work is likely to present any conflict of interest, based on the following factors: (i) whether the firm that employs the compensation consultant or the firm’s affiliates (the “consulting firm”) performs any additional services for the Company, (ii) the amount of fees payable to the consulting firm as a percentage of the consulting firm’s total revenues; (iii) any policies or procedures of the consulting firm designed to prevent conflicts of interest; (iv) any business or personal relationship that the compensation consultant has with any Committee member; (v) whether the compensation consultant owns any stock of the Company; (vi) any business or personal relationship that the compensation consultant or consulting firm has with any executive officer of the Company; and (vii) any additional factors affecting the independence of the compensation consultant or consulting firm from management of the Company as the Committee deems appropriate. If any such factors are present, the Committee shall determine any actions that must or should be taken for any potential conflict of interest to be resolved. If a compensation consultant or consulting firm performs any additional services for the Company other than consulting on executive or director compensation, the Committee shall approve the annual amount of aggregate fees permitted for such additional services, if any. The Committee shall periodically (at least once per year) reconsider the factors set forth above with respect to a compensation consultant whom it has previously retained or from whom it continues to obtain advice.
The foregoing Charter of the Organization and Compensation Committee of the Board of Directors of Jacksonville Bancorp, Inc., effective August 1, 2014, was reviewed and approved by the Compensation Committee on February 24, 2015.