COMMERCIAL BANCSHARES, INC.
COMPENSATION COMMITTEE CHARTER
(As adopted on March 8, 2012)
Purpose. The Compensation Committee (Committee) shall recommend to the Board an overall philosophy and strategy with respect to the compensation of Commercial Bancshares, Inc.‘s (Company) Chief Executive Officer (CEO) and other senior executives to attract and retain highly qualified individuals and shall provide oversight of Company’s executive compensation plans. The Committee will also provide overall strategic leadership to the Company in other critical Human Resource disciplines including succession planning, talent development, benefits, and total compensation.
Responsibilities. The Committee shall have the following responsibilities:
- To review Company’s executive compensation philosophy and strategy at least annually;
- To establish corporate individual goals and objectives at least annually relating to the compensation of the CEO and other senior executives under Company’s incentive compensation and equity-based plans;
- To evaluate the performance of the CEO and other senior executives at least annually and to approve their compensation or compensation levels, including base salaries, incentive compensation and equity-based compensation. It is recognized that the CEO will have primary responsibility for evaluating the performance of other executive officers.
- To consider, among other things, in determining long-term incentive compensation for these executives, Company’s performance and relative shareholder return, the awards the executives received in past years and the value of similar incentive awards to executives at comparable companies; and
- To approve or, as required, to recommend to the Board employment or consulting agreements, severance arrangements, change in control arrangements, stock ownership guidelines, perquisites and special, supplemental or non-qualified benefits for the CEO and other senior executives.
Incentive Compensation and Equity-Based Plans
- To approve or, as required, to recommend to the Board the establishment of new incentive compensation and equity-based plans for the CEO and other senior executives, as well as changes to and the termination of existing plans; and
- To administer or, as applicable, to oversee the administration of, the plans in accordance with their terms and to perform such functions with respect to the plan as the Committee is authorized or permitted to perform thereunder.
- To develop and periodically review and revise as appropriate, a management succession plan and related procedures. Consider and recommend to the Board candidates for successor to the CEO of the Company and, with appropriate consideration of the CEO’s recommendations, candidates for successors to other executive officers, in each case when vacancies shall occur in those offices.
- To insure appropriate Human Resource strategies are in place to create a “winning” organization. These areas include but are not limited to; compensation and benefits planning, performance measurement and evaluation systems, and talent development processes.
- To produce the report on executive compensation required by the rules of the SEC to be included in Company’s annual proxy statement;
- To review the performance of this Committee and the adequacy of this Charter annually and to recommend any proposed changes to the Board; and
- To report its activities regularly to the Board.
Outside Advisors. The Committee may, at Company’s expense and without Board approval, retain outside advisors to assist it in performing its functions, approve the advisors’ fees and other terms of engagement, and terminate the advisors at its sole discretion.
Organization. The Committee shall have at least three members, including the Chairman or Vice Chairman, who are appointed by the Board. All members shall be outside directors and shall meet such independence requirements as may be applicable under U.S. law and the rules of the Securities and Exchange Commission (SEC) and the Nasdaq. All members shall also qualify as “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.
Meetings. The majority of the members of the Committee constitute a quorum. The Committee may act by a majority vote at a meeting of the Committee or by a writing or writings signed by all of its members without a meeting. Meetings of the Committee will be held as often as may be necessary or appropriate at such times and places as the Committee determines. Such meetings may be held through any communications equipment if all persons participating can hear each other.