BANKS.com, Inc. Charter of the Compensation Committee
(Amended April 25, 2007)
Purpose
The Compensation Committee (the “Committee”) shall discharge the responsibilities of the Board of Directors (the “Board”) in determining the compensation of the Company’s executive officers and directors. The Committee shall have overall responsibility for approving and evaluating the employment agreements, the compensation plans and the benefit plans as well as policies and programs of the Company relating thereto. To that end, the Committee shall have the responsibility, power and authority to set the compensation and benefits for the chief executive officer (“CEO”) and the Company’s other executive officers, determine distributions and grant awards under, and administer the Company’s various stock option and other incentive plans, and assume responsibility for all matters related to all of the foregoing.
The Committee is also responsible for producing an annual report on executive compensation for inclusion in the Company’s annual proxy or information statement or in the Company’s Annual Report on Form 10-K or Form 10-KSB, in accordance with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
Nothing contained in this Charter is intended to, or should be construed as, creating any responsibility or liability of the members of the Committee except to the extent otherwise provided under Florida law which shall continue to set the legal standard for the conduct of the members of the Committee.
Committee Membership
The Committee shall be composed according to all rules and regulations of the SEC and applicable listing standards.
The members of the Committee shall be appointed by the Board annually or as necessary to fill vacancies. Each member shall serve until his or her successor is duly elected and qualified or until such member’s earlier resignation or removal. Any member of the Committee may be removed, with or without cause, by a majority vote of the Board.
The Board shall appoint one member of the Committee to act as its Chair. The Chair will chair all regular sessions of the Committee and, in consultation with the Chairman of the Board, periodically set the agendas for Committee meetings.
In fulfilling its duties and responsibilities, as set forth below, the Committee may delegate its authority as it deems appropriate, to act upon specific matters within defined parameters to subcommittees, including subcommittees consisting solely of one or more Company officers, in each case to the extent permitted by applicable law. Any such subcommittee shall propose any action taken to the full Committee at its next meeting.
Compensation Policy
The Board of Directors believes that compensation of employees should be fair to both employees and shareholders, externally competitive, and designed to align very closely the interests of employees with those of the shareholders. The Company’s executive compensation program is designed to attract, motivate, reward and retain superior management talent. The Committee places heavy emphasis on pay for performance. Increases in compensation should be based upon the performance level of an individual and the financial performance of the Company.
Committee Duties and Responsibilities
In carrying out its duties and responsibilities, the Committee’s policies and procedures shall remain flexible, so that it may be in the best position to react and respond to changing circumstances or conditions. The following offers guidelines regarding the Committee’s duties and responsibilities.
1. The Committee shall at least annually, review the Company’s overall compensation strategy, including base, incentive compensation and option grants, to assure that it promotes shareholder interests and supports the Company’s strategic and tactical objectives, and that it provides for appropriate rewards and incentives for the Company’s management and employees.
2.The Committee shall approve all aspects of compensation for the Chief Executive Officer of the Company (“CEO”), including but not limited to:
a. A review of corporate and individual goals and objectives relevant to CEO compensation, an evaluation of the CEO’s performance relative to those goals and objectives, and a determination of the CEO’s compensation level based on this evaluation subject to any employment contract that may be in effect; and
b. In determining the long-term incentive component of CEO compensation, the consideration of the Company’s performance, relative shareholder return, the value of long-term incentive compensation given to CEO’s at comparable companies, the awards given to the CEO in past years, the implementation of the Company’s business strategy, and such other factors as the Committee may consider relevant.
The CEO may not be present during deliberations or voting in connection with his own compensation.
3. The Committee shall review and approve proposals made by the CEO with regard to the compensation of the executive officers of the Company, such review to include:
a. the annual base salary
b. the annual incentive bonus
c. the long-term incentive award
d. employment agreements, severance arrangements, and change in control agreements or provisions, as applicable, and
e. any supplemental or special benefits, in each case as, when and if appropriate.
The structure of management compensation should link the interests of management, both individually and as a team, to the interests of shareholders. Management compensation packages should be designed to create a commensurate level of risk and opportunity based on business and individual performance. The CEO may be present during deliberations in connection with the compensation of executive officers.
4.The Committee shall periodically review and make recommendations to the Board with respect to the compensation of directors, including Board and committee retainers, meeting fees, equity-based compensation, and such other forms of compensation as the Committee may consider appropriate.
5. The Committee shall review and approve the structure and overall size of the Company’s bonus or other cash incentive plans used to compensate employees. In doing so, the Committee should bear in mind that incentives are industry dependent and are different for different categories of employees.
6. The Committee shall make recommendations to the Board with respect to incentive compensation and equity-based incentive plans that require shareholder approval, and will govern the Company’s shareholder-approved award and option plan(s). The plan governance role of the Committee will include the authority to adopt, administer, approve and ratify awards, including amendments to the awards made under any such plans, and the review and monitoring of awards made under any such plans provided that all awards to officers of the Company shall be approved by the full board of directors. The Committee may delegate to one or more officers designated by the Committee the authority to make grants to eligible individuals (other than any such officer) who are not executive officers.
Meetings
The Committee shall meet at such times as it determines to be necessary or appropriate, but not less than four times per year. Any member of the Committee may call a meeting of the Committee. All meetings of, and actions taken by, the Committee shall be held and taken pursuant to and in accordance with the Company’s Bylaws.
The Committee shall periodically meet in executive session, without Company management present. The Committee may invite to its meetings any officer, employee or director of the Company and such other person as it deems appropriate in order to carry out its responsibilities. A member of management shall not however, be present at any discussion or review where his or her personal performance and compensation is being deliberated or voted on.
A majority of the members of the Committee shall constitute a quorum for the transaction of business. The Committee shall keep minutes of its proceedings that shall be signed by the person whom the Chair designates to act as secretary of the meeting. The minutes of a meeting shall be approved by the Committee at its next meeting, shall be available to review by the entire Board, and shall be filed as permanent records with the Secretary of the Company. The Committee shall be governed by the same rules regarding meetings (including meetings by conference telephone, remote communication or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board. The Committee shall be authorized to adopt its own rules of procedure not inconsistent with (a) any provision of this Charter, (b) any provision of the Bylaws of the Company, or (c) any applicable law. Members of the Committee are expected to use all reasonable effortsto attend each meeting.
Reporting
1. The Committee shall prepare an annual report on executive compensation for inclusion in the Company’s annual proxy or information statement or in the Company’s Annual Report on Form 10-K or Form 10-KSB, in accordance with the applicable rules and regulations of the SEC.
2. The Committee shall prepare a description, to be included in the Company’s annual report to shareholders, of the Company’s compensation policies and the reasoning behind those policies, as well as the factors and criteria on which the CEO’s compensation is based, including its relationship to the Company’s performance, in accordance with the applicable rules and regulations of the SEC.
Authority
The Committee shall have the authority to retain and terminate special compensation, legal, accounting or other consultants to advise it. The Committee may request any officer or employee of the Company or any outside counsel or consultants to meet with any members of the Committee. The Committee shall also have the authority to form and delegate responsibilities to subcommittees, as may be necessary or appropriate, to act upon specific matters within defined parameters to subcommittees, including subcommittees consisting solely of one or more Company officers, in each case to the extent permitted by applicable law. Any such subcommittee shall report any action taken to the full Committee at its next meeting.
Other
This Charter is intended to provide a set of guidelines for the effective functioning of the Compensation Committee. Subject to Board approval, the Committee may at any time modify or amend (i) this Charter, and (ii) the authority and responsibilities of the Committee set forth herein.