CHARTER OF THE COMPENSATION
OF THE BOARD OF DIRECTORS
OF RIGGS NATIONAL CORPORATION
The Compensation Committee
(the “Committee”) of Riggs National Corporation (the “Corporation”) is
appointed by, and generally acts on behalf of, the Board of Directors (the
“Board”) of the Corporation. The Committee’s primary directive is to assist the
Board in fulfilling its responsibilities related to compensation and benefits.
The Committee’s philosophy
is to ensure that the interests of its Chairman and CEO and other “executive
officers” (as such term is defined in Rule 16a-1 under the Exchange Act of
1934, as amended, together, the “Officers”) are aligned with the success of the
Corporation, and to provide compensation opportunities that will attract,
retain, and motivate superior executive personnel. This philosophy contemplates
that the compensation of each Officer should be influenced significantly by
that officer’s performance, measured by financial, non-financial and market
performance, as well as the compensation levels of an appropriate peer group.
- The Committee will be composed of at least three (3)
directors, each of whom must be “independent” as defined in the Nasdaq
listing standards. Notwithstanding the foregoing, a director may be
appointed to the Committee pursuant to the “exceptional and limited
circumstances” exception set forth in Rule 4350(c)(3)(C) of the listing standards.
In addition, for purposes of meeting the requirements of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”), or any
successor Code section, the Committee approving the performance goals to
which certain of the executive compensation is tied will consist of at
least two “outside” directors, as defined in Treasury Regulation
1.162-27(e)(3) of the Code.
- The members of the Committee will be nominated and
appointed by the Board for one-year terms. The Board will designate one
member of the Committee to serve as Chairperson. The members of the
Committee will serve until their resignation, retirement, or removal by
the Board or until their successors have been appointed. The Board will
review the composition and independence of the Committee on an annual
IV. Meetings and
- The Committee will establish its own rules of
procedure, which will be consistent with the By-laws of the Corporation
and this Charter.
- The Committee will meet as often as it considers
necessary and appropriate, and in no event less than two (2) times per
year, either in person or telephonically. A majority of the members of the
Committee will constitute a quorum. The Chairperson of the Committee or a
majority of the members of the Committee may call a special meeting of the
- The Committee will report to the Board on the matters
discussed at each meeting of the Committee, including describing all
actions taken at the meeting, and will keep written minutes of its
meetings to be maintained with the books and records of the Corporation.
- The Committee may request that any directors,
officers, or employees of the Corporation, or other persons whose advice
and counsel are sought by the Committee, attend any meeting to provide
such information as the Committee requests.
- The Committee may delegate authority to one or more
members of the Committee when appropriate, but no such delegation will be
permitted if the authority is required by law, regulation or listing
standard to be exercised by the Committee as a whole.
V. Duties and
The primary goal of the
Committee will be to assist the Board in fulfilling its responsibilities
related to compensation and benefits. In this regard, the Committee will, among
- Periodically review, consider, and approve the
philosophy for compensation of the Corporation’s Officers.
- Set annual and long-term performance goals for the
Chairman and CEO and evaluate his performance against such goals. The
Committee will meet annually with the Chairman and CEO to receive his
recommendations concerning such goals and to evaluate his performance
against the prior year’s goals. The evaluation of the Chairman and CEO is
a subjective process, based on both qualitative and quantitative factors,
including performance of the business, accomplishment of long-term
objectives, positioning of the Corporation for the future, development of
management, and leadership in the industry.
- Assess the performance of the Corporation’s Officers
and determine and approve their compensation, including base salary, cash
bonus and related compensation. The Committee may manage and approve
awards as may be required to comply with applicable tax laws.
- Participate with the Chairman and CEO, President and
CEO of Riggs Bank N.A., and the Executive Vice President, Human Resources,
in an annual review of the critical officer positions within the Bank and
their plan of succession.
- Manage the Riggs National Corporation 2002 Long-Term
Incentive Plan and establish and certify the attainment of performance
goals, as appropriate.
- Interpret and administer the Corporation’s
equity-based employee benefit plans for the Corporation’s Officers, its
Chairman and CEO, and other covered officers of Riggs Bank N.A. The Committee
will make recommendations, if necessary, to the Board with respect to
incentive-based compensation plans and equity-based plans in a manner that
reflects, in general, programs and practices within the Corporation’s peer
- Produce annually a report to the Board on executive
compensation, in accordance with the rules and regulations promulgated by
the SEC, for inclusion in the Corporation’s annual proxy statement.
- On an annual basis, the Committee will conduct a
self-evaluation of its performance and effectiveness.
- Perform any other activities consistent with this
Charter, the Corporation’s Certificate of Incorporation, By-laws and
governing law, as the Committee or the Board deems necessary or