Committees of the Board

The Board delegates portions of its responsibilities to committees comprised of Board members. These standing committees of the Board meet at regular intervals to attend to their particular areas of responsibility. The Board has six (6) standing committees: the Nominating Committee, the Audit Committee, the Compensation Committee, the Loan Committee, the Investment Committee, and the CRA Committee.

The Compensation, Audit, and Nominating Committee charters are available on our Internet website at www.ovcb.com, under the “About Us” tab in the “Investor Relations” section at the link for “Governance Documents.”

Nominating Committee

The Nominating Committee identifies individuals that are qualified to become Board members and makes recommendations to the full Board ofregarding candidates for election to the Board, leads the Board in an annual review of its performance, and recommends director appointments to Board committees. Pursuant to Nasdaq's Rule 5605(e)(2), the Company certifies that it has adopted a formal written charter addressing the nominations process and such related matters as may be required under the federal securities laws. The Company’s Nominating Committee was established in 2010, and the committee charter (the “Charter”) was approved in 2010.   Subject to the standards required by applicable Nasdaq Stock Market listing rules, the Nominating Committee is comprised solely of Independent Directorsindependent directors of the Board. The Nominating Committee, consisting of eight (8)eleven (11) independent Directors, makes recommendations to the Board regarding the Board’s composition and structure, nominations for elections of Directors, and policies and processes regarding principles of corporate governance to ensure the Board’s compliance with its fiduciary duties to the Company and its shareholders.  The Nominating Committee reviews the qualifications of, and recommends to the Board, candidates as additions, or to fill Board vacancies, if any were to occur during the year.

The Nominating Committee determines the required selection criteria and qualifications of Director nominees based upon the Company’s needs at the time nominees are considered.  In general, Directors are expected to possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the Company’s shareholders.  In addition to the foregoing considerations, the Nominating Committee considers criteria such as strength of character and leadership skills, general business acumen and experience, broad knowledge of the banking industry, number of other board seats, and willingness to commit the necessary time to ensure an active board whose members work well together and possess the collective knowledge and expertise required by the Board.  The Nominating Committee considers these criteria for all candidates regardless of whether a candidate was identified by the Nominating Committee, by shareholders, or by any other source.

The goal of the Nominating Committee is to seek to achieve a balance of knowledge and experience on the Company’s Board.  To this end, the Nominating Committee seeks nominees with the highest professional and personal ethics and values, an understanding of the Company’s business and industry, diversity of business experience, expertise and backgrounds, a high level of education, broad-based business acumen and the ability to think strategically. Although theThe Nominating Committee does not have a formal policy concerning the consideration of diversity,ensures that the composition of the current Board reflects diversity in business, and professional experience, skills, gender, ethnicity, and gender.underrepresented minorities, and complies with all applicable listing and state law requirements. Our Board and Nominating Committee are committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected. The Nominating Committee reviews the effectiveness of its charter in achieving the goals of the Nominating Committee as stated therein annually.

The members of the Nominating Committee are Messrs. Barton, Dickerson, Gilbert, Jones, Leonard, Lafferty, Martin, Pelton, Holder, Strong, Titus and Withrow.  Mr. Gilbert is the Chairman of the Nominating Committee.  The Nominating Committee met two (2) times in 2015.2022.  The Board has determined that all members of the Nominating Committee are “independent” under the applicable rules and regulations of The NASDAQthe Nasdaq Stock Market.

Audit Committee

We have an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). The Audit Committee assists the Board in fulfilling the Board’s responsibilities for general oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, the performance of our internal audit function and independent auditors, and risk assessment and risk management. In addition, the Audit Committee reviews and discusses the annual audited financial statements with management and the independent auditors prior to finalizing and filing the Annual Report on Form 10-K with the SEC; reviews and discusses with management and the independent auditors any significant changes, significant deficiencies and material weaknesses regarding internal controls over financial reporting required by the Sarbanes-Oxley Act of 2002, oversees the internal audit function and the audits directed under its auspices, and establishes policies to ensure all non-audit services provided by the independent auditors are approved prior to work being performed. The Audit Committee also prepares the Audit Committee report for inclusion in the annual proxy statement; annually reviews the Audit Committee charter and the committee’sCommittee’s performance; appoints, evaluates and determines the compensation of our independent auditors; reviews and approves the scope of the annual audit, the audit fee and the financial statements; reviews our disclosure controls and procedures, internal controls, internal audit function, and corporate policies with respect to financial information and earnings guidance; oversees investigations into complaints concerning financial matters; and reviews other risks that may have a significant impact on our financial statements. The Audit Committee works closely with management as well as our independent auditors. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from the Company to retain, outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.

The Board of Directors has adopted a written charter for the Audit Committee. Pursuant to Nasdaq's Rule 5605(c)(1), the Company certifies that it has adopted a formal written charter and that the audit committee will review and assess the adequacy of the written charter on an annual basis.

The Company certifies that it has, and will continue to have, an audit committee consisting of at least three members. The members of the Audit Committee are Messrs. Gilbert, Lafferty, Leonard, Pelton, TitusStrong and Withrow. Ms. Pelton is the Chair of the Audit Committee. The Audit Committee held eight (8)ten (10) meetings during fiscal 2015.2022. The Board has determined that all members of the Audit Committee consists solely of independent membersare “independent” as that term is defined in Rule 5605(a)(2) of the Nasdaq listing rulesStock Market Rules and Section 10A ofRule 10A-3(b)(1) promulgated under the Securities Exchange Act of 1934.Act.

The Board of Directors has determined that Mr. Withrow and Ms. Pelton, have: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal control over financial reporting; and (v) an understanding of audit committee functions.

Therefore, the Board has determined that Mr. Withrow and Ms. Pelton meetseach meet the definition of “audit committee financial expert” under the applicable rules and regulations of the SEC and isare “financially sophisticated” as defined by the applicable rules and regulations of The NASDAQthe Nasdaq Stock Market. The designation of a person as an audit committee financial expert does not result in the person being deemed an expert for any purpose, including under Section 11 of the Securities Act of 1933, as amended. The designation does not impose on the person any duties, obligations or liability greater than those imposed on any other audit committee member or any other director and does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

The Board has determined that all members of the Audit Committee are “independent” as that term is defined in Rule 5605(a)(2) of The NASDAQ Stock Market Rules and Rule 10A-3(b)(1) promulgated under the Exchange Act.

The Audit Committee Report for 20152022 appears on page 3947 of this Proxy Statement.

Compensation Committee 

The Compensation Committee establishes our compensation policy, determines the compensation paid to our executive officers and non-employee directors, recommends executive incentive compensation plans and equity-based plans and approves other compensation plans and retirement plans, and performs the various reviews required by the regulations enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Compensation Committee approves corporate goals related to the compensation of the executive officers, evaluates the executive officers’ performance and compensates the executive officers based on this evaluation. Messrs. Barton, Dickerson, Gilbert, Jones,Lafferty, Leonard, Martin, Pelton, Holder, Strong, Titus and Withrow are members of the Compensation Committee. Mr. Leonard is the Chairman ofChaitof the Compensation Committee. The Compensation Committee held three (3) meetings during fiscal 2015.2022. The Board has determined that all members of the Compensation Committee are “independent” as that term is defined in Rule 5605(c)5605(d)(2) of The NASDAQthe Nasdaq Stock Market Rules, and the Compensation Committee consists solely of Independent Directors“independent directors” as defined in the Nasdaq Stock Market listing rules and Section 10C of the Securities Exchange Act of 1934. Pursuant to Nasdaq's Rule 5605(d)(1), the Company certifies that it has adopted a formal written charter and that the compensation committee will review and assess the adequacy of the formal written charter on an annual basis.

Loan Committee

The Loan Committee monitors the activities of our lending function utilizing information presented to it by management at regular meetings of the committee. This includes, but is not limited to, the review of trends in outstanding credit relationships, key quality measures, significant borrowing relationships, large problem loans, industry concentrations, all significant lending policies, and the adequacy of the allowance for loan losses. The Loan Committee also reviews lending-related reports from regulators, auditors, and internal personnel.

Each member of the Board of Directors serves on the Loan Committee, and Mr. JonesGilbert is the ChairmanChair of the Loan Committee. The Loan Committee held twenty-four (24)twenty (21) meetings during fiscal 2015.2022.

Investment Committee

The Investment Committee reviews, identifies and classifies our assets based on credit risk, in accordance with regulatory guidelines. The Committee is also responsible for reviewing asset valuation and classification policies, as well as developing and monitoring asset disposition. In addition, the Committee reviews and monitors the Company’s investment portfolio, liquidity position and the risk of our interest-earning assets in comparison to its interest-bearing liabilities.

Messrs. Barton, Courtney, Jones,Dickerson, Holder, Leonard, Martin, Pelton, Strong and Titus serve on the Investment Committee, and Mr. LeonardBarton is the Chairman ofChairof the Investment Committee. The Investment Committee held four (4) meetings during fiscal 2015.2022.

CRA Committee

The CRA Committee is responsible for oversight of our performance under the requirements of the Federal Community Reinvestment Act of 1977 and similar state law requirements. Messrs. Barton, Courtney, Dickerson, Gilbert, Jones, Haidlen, Lafferty, Martin, Titus and Withrow serve on the CRA Committee, and Mr. Titus is the ChairmanChair of the CRA Committee. The CRA Committee held three (3)four (4) meetings during fiscal 2015.2022.

Delinquent Section 16(a) Beneficial Ownership ReportingReports

Section 16(a) of the Securities Exchange1934 Act required ourrequires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes ofin ownership with the SEC. Our officersOfficers, directors and directorsgreater than 10% shareholders are required by SEC regulationregulations to furnish usthe Company with copies of all Section 16(a) forms so filed.  As a matter of practice, our administrative staff assists our executive officers and Directors in preparing initial ownership reports and reporting ownership changes, and typically files these reports on their behalf.  they file.

Based solely on aits review of the copies of the reports furnished to us,such forms received by it, or written representations from certain reporting persons, the Company believes that no reports were required to be filed, we believe that duringfor the 2022 fiscal year ended December 31, 2015the officers and directors of the Company complied with all Section 16(a)applicable filing requirements, applicableexcept that due to our directors, officers,administrative errors, Lynn Dickerson was late in reporting five transactions, Jay Gilbert was late in reporting one transaction, Allison Lafferty was late in reporting two transactions and greater than 10% beneficial owners, if any, were complied with, except as otherwise disclosedDaniel Leonard was late in the Annual Report on Form 10-K that we filed with the SEC on March 30, 2016.reporting one transaction.

Certain RelationshipRelationships and Related Party Transactions

Some of our Directors and the companies with which they are associated, as well as some of our executive officers, are our customers, and we expect to have banking transactions with them in the future. All loans and commitments to lend were made in the ordinary course of our business and were in compliance with applicable laws. Terms, including interest rates and collateral, were substantially the same as those prevailing for comparable transactions with other persons of similar creditworthiness. These transactions do not involve credits which are different than extended to non-Board customers more than a normal risk of collectability or present other unfavorable features. We have a strong policy regarding the review of the adequacy and fairness of Bank loans to directors and officers. Section 402 of the Sarbanes-Oxley Act of 2002 generally prohibits a company from extending credit, arranging for the extension of credit or renewing an extension of credit in the form of a personal loan to one of its officers or directors. There are several exceptions to this general prohibition, including loans made by an FDIC insured depository institution that is subject to the insider lending restrictions of the Federal Reserve Act. All loans to our directors and officers comply with the Federal Reserve Act and the Federal Reserve Board’s Regulation O and, therefore, are excepted from the prohibitions of Section 402.

All loans to Directors or executive officers would be subject to the limitations prescribed by California Financial Code Section 1360, et seq. and by the Financial Institutions Regulatory and Interest Rate Control Act of 1978.

From time to time, some of ourthe Company’s Directors, directly or through affiliates, may perform services for the Bank. These activities are performed in the ordinary course of the Bank’s business and are subject to strict compliance with the policies outlined below. Typically, such services relate to routine work on Bank properties, such as, for example, construction or interior design work at new or existing branches. In 2015,2022, the Company paid $409,107made payments totaling $782,000 to Crown Painting and Design Studio 120, a companycompanies affiliated with Mr.Thomas Haidlen’s daughter, for branch constructionrenovation and design work performed in connection with our new Sonora branch opened in 2015, renovation of our corporate administrative officesvarious projects and general maintenance for allon the Bank’s branches. Except for such payments, no other material services or activities were performed for purposes of Item 404(A) of Regulation S-K under the Exchange Act.

Policies and Procedures for Approving Related Party Transactions

Our Board of Directors is committed to the highest levels of honesty and integrity and, as such, takes related party transactions very seriously and adheres to very strict written policies and procedures that exceed typical practices of other boards of directors to handle “related party transaction” issues.

A “related party transaction” is a transaction in an amount exceeding $120,000 between the Company or the Bank and any “related person,” including any transaction requiring disclosure under Item 404 of Regulation S-K under the Exchange Act.S-K. Generally, a “related person” is (i) any person who is, or was at any time since the beginning of the Company’s last fiscal year, a director or executive officer of the Company or the Bank or a nominee to become a director of the Company or the Bank; (ii) any person who is known to be the beneficial owner of more than 5% of any class of the Company’s voting securities; (iii) any immediate family member (i.e., any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law), and any person (other than a tenant or employee) sharing the household, of any of the persons described in (i) or (ii); and (iv) any firm, corporation or other entity in which any of the persons described in (i), (ii) or (iii) is employed or is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

The general policy of the Board of Directors is that each Director, and prospective director and executive officer must disclose any “related party transaction” to the Board before such transaction may occur and, furthermore, that such transaction may thereafter be consummated if and only if (i) a majority of “non-interested” directors approves such transaction, and (ii) such transaction is on terms comparable to those that would be obtained in arm’sarm length dealings with an unrelated third party. A “non-interested” director is a director who is not directly or indirectly involved in the “related party transaction.” A director is deemed to be not directly involved if the director is not involved in the transaction, and a director is deemed to be not indirectly involved if the transaction does not involve any of the director’s immediate family members or any firm, corporation or other entity of which the director is an employee, partner, principal or in a similar position or a 10% or greater beneficial owner.

In making its decision on whether or not to approve a transaction, the Board also considers the benefits the Company or the Bank would receive in the transaction; the impact the transaction would have on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; the availability of other sources for comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to our employees generally.

In addition, the Board has stated that it is the responsibility of each director and prospective director to disclose to the Board any relationship that may not necessarily involve a “related party transaction” but that could impair his or her independence or pose any conflict of interest with the Company or the Bank, including (i) affiliations of a director or prospective director; (ii) affiliations of an immediate family member (i.e., child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law) or anyone other person, other than a domestic employee, who shares a director or prospective director’s home; and (iii) affiliations of a director or prospective director with anythe Company or Bank (a) customer, supplier, distributor, dealer, reseller or other channel partner, (b) lender, outside legal counsel, investment banker or consultant, (c) significant shareholder, (d) charitable or not-for-profit institution that has received or receives donations from the Company or the Bank, or (e) competitor or other person having an interest adverse to us.

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee of the Board of Directors has responsibility for establishing, implementing and continually monitoring the compensation structure, policies and programs of the Company. The individuals who served as the Company’s Chief Executive Officer and Chief Financial Officer during 2015,2022, as well as the other individuals included in the Summary Compensation Table, are referred to as the “named executive officers.”

The Compensation Committee is responsible for assessing and approving the total compensation structure paid to the Chief Executive Officer and the other executive officers, including the named executive officers. Thus, the Compensation Committee is responsible for determining whether the compensation paid to each of these executive officers is fair, reasonable and competitive, and whether it serves the interests of the Company’s shareholders.

This Compensation Discussion and Analysis identifies the Company’s current compensation philosophy and objectives and describes the various methodologies, policies and practices for establishing and administering the compensation programs of the named executive officers.

Overview

Even though2022 was another record year of profitability for the economy remained challenging in 2015, ourcompany, driven by solid loan growth and strong core financial performanceperformance. We have experienced nominal negative impacts on liquidity resulting from the recent events in the banking industry. The deposit decrease during the first quarter of 2023 was related to normal seasonal activity and some movement to higher deposit rates offered by other financial institutions. Our liquidity position is very strong as evidenced by $389 million in cash equivalent balances of March 31, 2023. Credit Quality remained strong in considerationstable as evidenced by the fact that non-performing assets remained at zero as of the one-time merger related expenses we absorbed in connection with the acquisition of Mother Lode Bank, as we continued to increase revenue and are poised for further growth over the coming years. Our stock price increased during 2015, reflecting our performance and value as a company.December 31, 2022. Nevertheless, given the difficulty in assessing the timing and pace of the economic recovery cycle, the Company continues to manage executive compensation conservatively.

The objectives of the Company’s executive compensation program are to align a portion of each executive officer’s total compensation with the annual and long-term performance of the Company and the interests of the Company’s shareholders.  The Compensation Committee continues to review our compensation program to seek to achieve shareholder value and continue to motivate and retain our senior management.

The Company considered the shareholder vote approving the Company’s executive compensation for 2013 in making its proposal for 2016.

Overview of Compensation Philosophy

Our executive compensation policy is to provide the Company’s executive officers with compensation opportunities, which are based upontake into account their personal performance, the annual and long-term performance of the Company, and the interests of the Company’s shareholders, and their contribution to that performance, while maintaining a level of compensation that is competitive enough to attract and retain highly skilled individuals.

The Compensation Committee believes that the most effective executive compensation programs are those that align the interests of each executive officer with those of the Company’s shareholders. The Compensation Committee believes that a properly structured compensation program will attract and retain talented individuals and motivate them to achieve specific short-term and long-term strategic objectives. Over the years, we have been very successful in retaining a strong core group of executive officers, and we have been providing growth and value for our shareholders. For this reason, an important objective of the Compensation Committee is to ensure that the compensation of our named executive officers is comparable to that of similar positions at other financial institutions that are similar to us in terms of size and geographic service area, so that we can continue to attract and retain executives and achieve our strategic objectives.

Each executive officer’s compensation package is comprised of three elements: (i) base salary that is competitive with the market and reflects individual performance, (ii) annual variable performance awards payable in cash and tied to the Company’s achievement of annual financial, strategic and operational objectives in addition to individual contributions to these objectives, and (iii) long-term stock-based incentive awards designed to strengthen the mutual interest of the Company’s executive officers and its shareholders. As an officer’s level of responsibility increases, a greater proportion of his or her total compensation will be dependent upon the Company’s financial performance and stock price rather than base salary.

Stock awards such as stock options and/or restricted stock, are available to reward the long-term efforts of management and to retain management. EquityStock awards can also increase our management team’s ownership stake in the Company, further aligning the interests of the executives with those of our shareholders. We also consider other forms of executive pay, including salary continuation benefits, as a means to attract and retain our executive officers, including the named executive officers.

The Company and the Compensation Committee believe our compensation philosophy, policies and objectives outlined within this Compensation Discussion and Analysis are appropriately designed to allow us to effectively compensate our employees both during times of positive performance and in times of weak performance.

Compensation Program Objectives and Rewards

The Company’s compensation and benefits programs are driven by our business environment and are designed to enable us to achieve our mission and adhere to the Company values.

The programs’ objectives are to foster our position as a leading community bank in our service areas; attract, engage and retain a qualified workforce; maintain an effective administrative structure in line with our growth and performance; and incentivize our employees to reach our business objectives.

The guiding principles behind our programs are to promote and maintain a high performancehigh-performance banking organization; continue to invest in our administration and operations; remain competitive in our marketplace for talent; and balance our compensation costs with our desire to provide value to our employees and shareholders.

We measure the success of our programs by our overall business performance and employee engagement; our ability to attract and retain key talent; our costs and business risks and return; and our ability to accommodate further growth in our organization using the existing administrative infrastructure.

All compensation and benefits for our named executive officers reflect, as their primary purpose, our need to attract, retain and motivate the highly talented individuals who will engage in the behaviors necessary to execute the programs’ objectives outlined above, and to enable us to maintain and create shareholder value in a highly competitive marketplace.

Accordingly, each component of our compensation and benefits has a specific purpose designed to reward different behaviors:

●    Base salary and benefits are designed to reward core competence in the executive role relative to skills, position and contributions to the Company, and to provide fixed cash compensation with merit increases that are competitive with the market place.marketplace.

●    Annual incentive variable cash awards are designed to focus employees on annual financial objectives derived from theour business plan that lead to long-term success; provide annual variable performance-based cash awards to reward and motivate achievement of critical annual performance metrics selected by the Compensation Committee; and foster a pay-for-performance culture that aligns our compensation programs with our overall business strategy.

●    Equity-based compensation awards are designed towhen granted link compensation rewards to the creation of shareholder wealth; promote teamwork by tying compensation significantly to the value of our common stock; attract the next generation of management by providing significant capital accumulation opportunities; and retain executives by providing a long-term-oriented program, pursuant to which value can be achieved only by remaining with and performing with the Company.

●    A supplemental executive retirement program facilitates our ability to attract and retain executives as we compete for talented employees in a marketplace where similar programs and plans are commonly offered.

We believe this combination of compensation and benefits provides an appropriate mix of fixed and variable pay, balances short-term operational performance with long-term shareholder value, and encourages executive recruitment and retention.

TotalWhen considering all factors, total compensation is generally targeted at the median of our Compensation Peer Group, which consists of bank holding companies of community banks having deposit bases and geographical service areas similar to ours. We target that level in order to retain and motivate talented individuals, who can help us implement our objectives discussed above.

Role of Compensation Committee in Determining Compensation

The Compensation Committee has overall responsibility and authority for approving and evaluating the compensation programs and policies pertaining to our executives, including the named executive officers. The Compensation Committee is also responsible for reviewing and submitting to the Board of Directors recommendations concerning director compensation.

When making individual compensation decisions regarding a named executive officer, the Compensation Committee takes many factors into account, including the executive’s experience, responsibilities, management abilities and job performance, the overall performance of the Company, current market conditions and competitive pay for similar positions at comparable companies. In addition, the Compensation Committee reviews the relationship of various positions between departments, the affordability of desired pay levels, and the importance of each position within the Company. These factors are considered by the Compensation Committee in a subjective manner without any specific formula or weighting.

Our Chief Executive Officer’s compensation is determined solely by the Compensation Committee. Our Chief Executive Officer attends those portions of the Compensation Committee meetings relating to the compensation of the other executive officers. Decisions relating to the Chief Executive Officer’s pay are made by the Compensation Committee, without management present. The Compensation Committee reports its activities to our Board of Directors.

The Compensation Committee relies on the input and recommendations of our Chief Executive Officer when evaluating these factors relative to the compensation of other executive officers. Because the Chief Executive Officer works closely with and supervises our executive team, the Compensation Committee believes that the Chief Executive Officer provides valuable insight in evaluating their performance. Our Chief Executive Officer provides the Compensation Committee with his assessment of the performance of each named executive officer and his perspective on the factors described above in developing his recommendations for the compensation of the other executives, including salary adjustments, non-equity incentive bonuses,plan compensation (“bonuses”), annual equity grants, and equity grants awarded in conjunction with promotions. The Chief Executive Officer also provides the Compensation Committee with additional information regarding the effect, if any, of market competition and changes in business strategy or priorities. The Compensation Committee discusses our Chief Executive Officer’s recommendations and then approves or modifies the recommendations in collaboration with the Chief Executive Officer.

Stockholder Advisory Vote on Executive Compensation

The Compensation Committee is very interested in the ideas and any concerns of our shareholders regarding executive compensation. An advisory vote on executive compensation was last presented at the 2022 Annual Meeting of Shareholders and approved by 97% of votes cast (for or against) by shareholders. In evaluating our compensation practices in 2022, the Compensation Committee was mindful of the support our shareholders expressed for the Company’s philosophy of linking compensation to operational objectives and the enhancement of stockholder value. As a result, the Compensation Committee retained its approach to executive compensation, and continued to apply the same general principles and philosophy as in the prior year in determining executive compensation and made no material changes to the design of our executive program during 2022.

The Company Compensation Program

Market Positioning and Pay Benchmarking

The Compensation Committee targets base salary of the Chief Executive Officer and the other named executive officers aroundconsiders the median compensation values of Northern California-based financial institutions that are similar in size to us.us in determining the compensation of the Chief Executive Officer and the other named executive officers. The data that the Compensation Committee considers are derived from reports from the California Bankers Association, and from the California Department of Business Oversight.prepared by Pearl Meyer & Partners, LLC (“Pearl Meyer”), a professional compensation consulting firm. These comparative survey data reports are used to benchmark executive compensation levels against banks that have executive positions with responsibilities similar in breadth and scope to ours and that compete with us for executive talent.  For example, the California Department of Business Oversight report thatin 2022, our Compensation Committee reviewsreviewed the California Bankers Association report, which includes approximately 2945 California banks.  The Compensation Committee uses banks, each having assets between $250$801 million and $1$3.0 billion with average assets of about $523 million. $1.54 billion, as the bank’s peer group.  In 2020, our Compensation Committee also engaged the services of Pearl Meyer to conduct a thorough review of our executive compensation for fairness based on the California Bankers Association report. The results of the Pearl Meyers consultation in 2020 were used by the Compensation Committee in their determination of 2021 compensation. In the process of selecting Pearl Meyer as its compensation consultant, our Compensation Committee considered Pearl Meyer’s independence by taking into account the factors prescribed by the Nasdaq listing rules. Based on this evaluation, the Committee determined that no conflict of interest existed with respect to Pearl Meyer. Pearl Meyer did not provide any other services to the Company.

With such information, the Compensation Committee reviewsreviewed and analyzesanalyzed compensation for each executive and makesmade adjustments as appropriate. The actual positioning of each named executive officer’s compensation is dependentwas based on considerations of the executive’s performance, the performance of the Company and the individual business or corporate function for which the executive is responsible, the nature and importance of the position and role within the Company, the scope of the executive’s responsibility (including risk management and corporate strategic initiatives), and the individual’s success in promoting our core values and demonstrating leadership. We do not use any paid compensation consultants.

Pay Mix

We do not allocate between cash and non-cash compensation or short-term versus long-term compensation based on specific percentages. Instead, we believe that the compensation package for our executives should be generally in line with the prevailing market, consistent with each executive’s level of impact and responsibility.

Chief Executive Officer Compensation

Each year, the Compensation Committee meets with the other independent directors on our Board of Directors in an executive session to evaluate the performance of the Chief Executive Officer. In 2015,2022, the Compensation Committee considered management’s continuing achievement of its short- and long-term goals versus its strategic objectives as well as financial targets. Emphasis was placed on performance factors of the Company’s business units and on personal performance goals established annually by the Compensation Committee.

The Compensation Committee determined that the Chief Executive Officer’s base salary in 20152022 was aligned with the Company’s compensation philosophy and is aligned with a comparable median salary of peer institutions. 

Components of Executive Officer Compensation

Base Salaries

In accordance with our compensation objectives, salaries are set and administered to reflect the value of the position in the marketplace, the career experience of the individual, and the contribution and performance of the individual.

 None of the named executive officers has an employment agreement with the Company. The base salary of each named executive officer is determined annually by the Compensation Committee, in accordance with the Compensation Committee’s evaluation of the Company’s overall compensation programs and policies.

Base salaries for our executive officers are based on the scope of their responsibilities as well as review of competitive compensation data from peer institutions. For 2015,2022, the Compensation Committee considered the pay practices of such institutions and data from the published compensation surveyssurvey discussed above. In evaluation of the base salaries for the named executive officers, the Compensation Committee also considers the minimum, mid-range and maximum salaries paid to similarly situated positions at other comparable companies of our size in our geographic and market areas, as well as the performance levels of the named executive officer.

In 2022, the Compensation Committee determined to increase the salaries of our executive officers by a range of 5% to 10%. The increases for executives in 2022 recognizes the significant growth of the Company’s earnings and were based on data published in the California Bankers Association report. The amount of base salary that each executive officer earned in 2022 is reflected below in the Summary Compensation Table. Base salary drives the formula used to determine any year-endannual bonus payable to executive officers.

Bonuses

Traditionally, our annual incentive compensation opportunities for named executive officers has beenare established by the Compensation Committee upon consideration of many factors, including, but not only limited to, the executives’their performance as compared against performance objectives. Our bonuses to executive officers would normally accrue quarterly based on the estimated annual financial metrics and becorresponding annual bonuses reflected in the tables below, and are payable in the quarter immediately after the accrual.accrual, with any true-up occurring after the end of the fiscal year.

The accrual of bonuses is typically calculated as a percent of salary. Such incentive levels are designed to provide for the achievement of threshold, target and maximum performance objectives.  The financial metrics, performance objectives, and the formula for computing the performance bonus are established by the Compensation Committee early in each fiscal year.

The bonus award opportunities are derived in part from comparative data and in part by the Compensation Committee’s judgment on internal equity of the positions, their relative value to the Company and the desire to maintain a consistent annual incentive target for the Chief Executive Officer and the other named executive officers.

The 2022 bonus payouts for executives are targeted at when we reach our target annual financial performance. If we reach, but do not exceed, the financial plan for any given year, the incentive payout, given current salary levels, should be in line with median comparative data.

The current incentive levelsaward opportunities assigned as a percentage of base salary are as follows:

Each year, performance objectives are generally identified through our annual financial planning and budget process. Senior management develops a financial plan, and the financial plan is reviewed and approved by the Board of Directors. Management recommends and the Compensation Committee reviews and approves the financial metrics that must be met each year in order for awards to be paid.paid, which metrics correspond to the financial plan that is approved by the Board of Directors. These financial metrics are weighted and are intended to motivate and reward eligible executives to strive for continued financial improvement of the Company, consistent with performance-based compensation and increasing shareholder value. The Compensation Committee typically identifies from three to five financial metrics which may be revised from year to year to reflect current business situations.strategies.

The financial metrics selected for 20152022 related to three base categories: profitability, growth and risk management. Within each category, the Compensation Committee analyzedsets specific financial metrics. The Compensation Committee believes return on assets and earnings per sharenet income to be valid measurements in assessing how the Company is performing from a profitability standpoint. Earnings per share reflect shareholder returns over the long term. Earnings per share are an accepted measure of growth and efficient use of capital. In addition, the Compensation Committee concluded that management’s compensation should continue to weighbe tied to core loan growth and core deposit growth, since the strength of a Company’s core deposit base is an indication of the Company’s success in customer retention, reduction in interest rate sensitivity and liquidity stabilization.  Finally, the Compensation Committee believes that asset quality measures and audit results are effective measures to monitor the Company’s progress in improving its credit quality.

The Compensation Committee determines the weighting of financial metrics each year based upon recommendations from the senior management. For 2015,2022, the Compensation Committee weighted the financial metrics as follow:

Each year, performance objectives are generally identified through our annual financial planning and budget process. Senior management develops a financial plan, and the financial plan is reviewed and approved by the Board of Directors. The Compensation Committee receives recommendations from senior management for financial performance objective ranges. The “target” level equatedgenerally equates to the approved financial plan. The “threshold” performance level wasis set below the target level. In making the determination of the threshold and target levels, the Compensation Committee considered specific circumstances anticipated to be encountered by the Company during the coming year. Generally, the Compensation Committee sets the threshold and target levels such that the relative difficulty of achieving the target level is consistent from year to year. The annual performance objectives for fiscal year 2022 are shown below:

The Compensation Committee believes that these targets have been and remainwere sufficiently challenging given the economic climate and the level of growth and improvement in the various financial metrics that would have to occur to meet the various performance objectives.

Our performance is assessed relative to performance objectives for return on assets, earnings per share, core deposit growth, loan growth and nonperforming assets to equity. These performance objectives are shown below:

Upon completion of the 2022 fiscal year, the Compensation Committee assessesassessed the performance of the Company for each financial metric, comparing the actual fiscal year results to the pre-determined performance objectives for each financial metric calculated with reference to the pre-determined weight accordedassigned to the financial metric, and ancalculated the overall percentage amount for the award is calculated. In addition, the Compensation Committee has discretionary authority to include qualitative subjective measures which may increase or decrease an award up or down by an additional 15%each named executive officer’s bonus award.

The table below reflects actual result of base salary. The positive discretion may be utilized to address completion of special projects, department initiatives, or favorable achievements reflected in regulatory exam results. The Compensation Committee may also use its discretion in adjustingour financial metrics and performance objectives for unexpected economic conditions, changes in2022, three of which exceeded the business oftarget goal, while all five metrics exceeded the Company, or one-time nonrecurring charges related to capital activities. For example, the Compensation Committee excluded $1.9 million in expenses related to acquisition of Mother Lode Bank from the 2015 financial metrics applicable to executive compensation.threshold goal:

In 2015, all thresholds were met and

Consequently, bonuses were paid as disclosed onin the Executive Compensation table on page 29.amounts set forth below.

Equity-Based Compensation

The Company currently has one equity-based incentive plan, the Oak Valley Bancorp 2008 Stock Plan.  The 2008 Stock Plan provides for awards in the form of incentive stock options, non-statutory stock options, stock appreciation rights, and restricted shares.  The size of the option grant to each executive officer is set by the Compensation Committee at a level that is intended to create a meaningful opportunity for stock ownership based upon the individual’s current position with the Company, the individual’s personal performance in recent periods and his or her potential for future responsibility and promotion over the option term. The Compensation Committee also takes into account the number of unvested options held by the executive officer in order to maintain an appropriate level of equity incentive for that officer. The relevant weight given to each of these factors varies from individual to individual. The Compensation Committee has established certain guidelines with respect to the option grants made to the named executive officers, but has the flexibility to make adjustments to those guidelines at its discretion.  The Company is authorized to issue 1,500,000 shares of its common stock under the 2008 Stock Plan, 197,180 of which have been issued as of the time of filing this Proxy Statement.

Each of the named executive officers is eligible to receive equity compensation and, historically, equity compensation has been delivered primarily in the form of stock options. However, since the 2008 Stock Plan was approved, the Company has granted primarily restricted stock awards, after determination by management that they are more in line with the objectives of the compensation program. The Company issued no equity-based compensation grants in 2014 or 2015, under the 2008 Stock Plan to its named executive officers as a group. 

The Compensation Committee approves all awards under the 20082018 Stock Plan and acts as the administrator of the 20082018 Stock Plan. The Compensation Committee is responsible for determining equity grants to all staff members, including named executive officers, and in doing so considers past grants, corporate and individual performance, the individual title, role and responsibilities and the recommendations of our Chief Executive Officer for staff members other than himself.

Stock option grants are made at the discretion of the Board. Each grant is designed to align the interests of the named executive officers with those of the shareholders and provide each individual with a significant incentive to manage the Company from the perspective of an owner with an equity stake in the business. Each grant allows the officer to acquire shares of the Company’s common stock at a fixed price per share consistent with the market price on the grant date over a specified period of time (up to ten years). Each option becomes exercisable in a series of installments over a five-year period, contingent upon the officer’s continued employment with the Company. Accordingly, an option will provide a return to an executive officer only if he or she remains employed by the Company during the vesting period, and then only if the market price of the shares appreciates over the option term. We do not grant stock options with a so-called “reload” feature, nor do we loan funds to employees for the purpose of enabling them to exercise stock options.

The Compensation Committee recognizes that stock options have an impact on the profits of the Company under current accounting rules and also have a dilutive effect on the Company’s shareholders. Accordingly, stock options are recognized as a scarce resource, and option grants are subject to the same amount of deliberation as any other form of compensation. The Compensation Committee has not established definitive target levels for stock awards although it has traditionally relied on comparative data with respect to these long-term incentive awards.

We do not backdate options or grant options retroactively. In addition, we do not plan to coordinate grants of options so that they are made before announcement of favorable information or after announcement of unfavorable information. The Company’s options are granted at fair market value on a fixed date or event (typically the first day of service for new hires and the date of Compensation Committee approval for existing employees), with all required approvals obtained in advance of or on the actual grant date. All grants to executive officers require the approval of2022, the Compensation Committee and the Board of Directors. Fair market value has been consistently determined as the closing price on The Nasdaq Global Select Market on the grant date. In order to ensure that the exercise price of a stock option fairly reflects all material information, without regard to whether the information seems positive or negative, every grant of options is contingent upon an assurance by management that the Company is not in possession of material undisclosed information. If the Company is in a “black-out” period for trading under its trading policy or otherwise in possession of inside information, the date of grant is suspended until the second business day after public dissemination of the information.

 As of December 31, 2015, in addition to 13,305 shares of restricted stock issued to our Chief Executive Officer in 2011and 67,500 shares of restricted stock issued to the named executive officers in 2012, the Compensation Committee had authorized 117,375granted 11,303 shares of restricted stock to all other employeesour named executive officers as a group, under the 20082018 Stock Plan.Plan, as set forth below, which vest 20% annually over five years beginning on February 28, 2023, subject to being a service provider through each vesting date, except in certain circumstances as described below in “Potential Payments Upon Termination or Change in Control”. These stock awards will vest immediately upon retirement if the named executive officer is at retirement age.

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In connection with the Company becoming the holding company for Oak Valley Community Bank in 2008, the Company assumed all obligations for options issued under the Bank’s 1998 Restated Stock Option Plan, with options to purchase shares of Company’s common stock substituted for options to purchase shares of common stock of the Bank.  The 1998 Restated Stock Option Plan expired in May 2008. As of March 31, 2016, there were a total of 30,000 options issued and exercisable under the 1998 Restated Stock Option Plan.

Additional information on long-term awards for executive officers is shown on the Outstanding Equity Awards and Option Exercises and Stock Vested tables on pages 31 and 32.32 through 37 of this proxy statement.

401(k)Plan

The Company maintains a plan that complies with the provisions of Section 401(k) of the Internal Revenue Code.Code (the “Code”). Substantially all our employees are eligible to participate in this plan, and eligibility for participation commences upon hiring. The Company’s executive officers are eligible to participate in this program, subject to any applicable tax laws.  The Company contributes a percentage matching contribution to the same degree as all other employees. The matching contribution is 75% on all deferred amounts up to IRS limits.

Health and Welfare Benefits

The Company offers health and welfare programs to all eligible employees. The programs include medical, wellness, pharmacy, dental, vision, life insurance and accidental death and disability. The

Automobile Benefits

Our named executive officers received upare offered Company-paid automobile allowances as indicated by the Auto Compensation in the table above. We believe that it is important to $21,600 each in 2015compensate our executive officers for healthall expenses incurred while traveling for work to allow our executive officers to concentrate on their responsibilities and welfare benefits.our future success.

Salary Continuation Agreements

OnIn August 21, 2001, the Board of Directors of the Company approved salary continuation agreements (“Continuation Agreements”) between the Bank and Messrs. Courtney and McCarty.  Under the original Continuation Agreements, Messrs. Courtney and McCarty arewere entitled to receive maximum annual payments of $85,000 and $65,000, respectively, for a period of 20 years following their retirement at the age of 62 (the “Normal Retirement Age”).

These agreements were subsequently revised to provide for shorter benefit payment periods of fifteen years. As a result, Mr. Courtney will receive $104,000 annually for fifteen years and Mr. McCarty will receive 80,000 annually over fifteen years. In the event of disability while employed with us prior to the Normal Retirement Age, each named executive officer will receive a benefit equal to the retirement liability balance accrued by us at the time of disability.  In the event of early termination, the Executivenamed executive officer will receive a vested portion of his retirement liability balance accrued by the Company at the time of such early retirement.  The vesting schedulebenefit is 20% per year of service beginning with the sixth year of service.fully vested. In the event the named executive officer dies prior to termination of the Continuation Agreement, the beneficiary of such named executive officer will receive from the Company a lump sum death benefit amount.

In February 2008, we entered into an additionala Continuation Agreement in the same form also for Ronald C. Martin.with Michael J. Rodrigues. Under the Continuation Agreement, Mr. Martin isRodrigues was originally entitled to receive a maximum annual payment of $48,000$50,000 for a period of 1020 years following his retirement at the age of 6762. The agreement for Mr. Rodrigues was subsequently revised to provide for a shorter benefit payment period of fifteen years. As a result, Mr. Rodrigues will receive $61,125 annually for fifteen years.  In the event Mr. Rodrigues dies prior to termination of the agreement, his beneficiary will receive from the Company a lump sum death benefit amount.

In September 2016, we entered into a Continuation Agreement with Mr. Jeffrey A. Gall. Following his retirement at the age of 62 or upon a change in control, as defined in the Agreement.Agreement, Mr. Gall will receive $61,125 annually for fifteen years. In the event of disability while employed with us prior to the age of 67,62, Mr. Martin would have receivedGall will receive a benefit equal to the retirement liability balance accrued by the Bank at the time of disability.  In the event of early termination, Mr. Martin would have received the vested portion of his retirement liability balance that has accrued at the time of such early retirement.  The benefit is fully vested.  In the event Mr. Martin dies prior to termination of the Agreement, the beneficiary of Mr. Martin would have received from us a lump sum death benefit amount.

 In February 2008, we entered into Continuation Agreements in the same form also for David S. Harvey, Michael J. Rodrigues and Wendy A. Burth.  Under each Continuation Agreement, each individual is entitled toGall will receive maximum annual payment of $50,000 for a period of 20 years following his or her retirement at the age of 67 or upon a change in control, as defined in the Agreement.  In the event of disability while employed with us prior to the age of 67, the individual would have received a benefit equal to the retirement liability balance accrued by the Bank at the time of disability.  In the event of early termination, the individual would have received the vested portion of his or her retirement liability balance that has accrued at the time of such early retirement.  The vesting schedule is 20% per year of service beginning with the firstsixth year of service.  In the event the individualMr. Gall dies prior to termination of the Agreement, thehis beneficiary of such individual would have receivedwill receive from us a lump sum death benefit amount.

In July 2019, we entered into a Continuation Agreement with Mr. Gary W. Stephens. Following his retirement at the age of 65 or upon a change in control, as defined in the Agreement, Mr. Stephens will receive $61,125 annually for fifteen years. In the event of disability while employed with us prior to the age of 65, Mr. Stephens will receive a benefit equal to the retirement liability balance accrued by the Bank at the time of disability.  In the event of early termination, Mr. Stephens will receive the vested portion of his or her retirement liability balance that has accrued at the time of such early retirement.  The vesting schedule is 20% per year of service beginning with the sixth year of service.  In the event Mr. Stephens dies prior to termination of the Agreement, his beneficiary will receive from us a lump sum death benefit amount.

The Continuation Agreements also provide that, in lieu of any other benefit under such agreements, the Company will pay the executives any benefit under the agreement to the extent the benefit would not create an excise tax under the excess parachute rules of Section 280G of the 1986 Internal Revenue Code, and to extent possible, such benefit payment shall be reduced to allow payment within the fullest extent permissible under applicable law.

If an Executivea named executive officer under the Salary Continuation Agreement is terminated for cause, we will not pay any benefits under such Salary Continuation Agreement.  For this purpose, the term “cause” means an Executive’s gross negligence or gross neglect of duties, fraud, disloyalty, dishonesty or willful violation of law or significant bank policies in connection with the Executive’s service that results in an adverse effect on the Company.

Since 2001, weInsurance Benefits

We have purchased insurance policies onfor the lives of individuals that at the time of such purchase heldfollowing named executive roles, as follows:officers:

Under our Split DollarSplit-Dollar Agreements and Split DollarSplit-Dollar Policy endorsements, the policy interests are divided between us and such individual. We are entitled to any insurance policy death benefits remaining after payment to the individual’s beneficiary.

Compensation Committee Interlocks and Insider Participation

No member of this committee was at any time during 2022 or at any other time an officer or employee of the Company, except for Mr. Martin who was our Chief Executive Officer until his retirement in 2013, and no member of this committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. No executive officer of the Company has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board of any other public company during the year ended December 31, 2015. No member of the Compensation Committee served as an executive officer of any other public company during the year ended December 31, 2015. No interlocking relationship exists between the members of our Compensation Committee and the Board or compensation committee of any other company.2022. Our Compensation Committee is comprised of Messrs. Barton, Pelton, Withrow,Dickerson, Gilbert, Jones,Lafferty, Leonard, Holder, Martin, Strong, Titus, Withrow, Ms. Lafferty and Titus,Ms. Pelton, all of whom are independent directors.

Prohibition on Speculation in Company Stock

Our stock trading guidelines prohibit executives, employees and directors from speculating in our stock, whether such stock is held directly or indirectly by such executive, employee or director, which includes, but is not limited to, short selling (profiting if the market price of the securities decreases), buying or selling publicly traded options, including writing covered calls, and hedging or any other type of derivative arrangement that has a similar economic effect.

Tax Considerations

Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended, limits the allowable tax deduction fordeductibility of annual compensation in excess of $1 million paid or accrued with respect to the Chief Executive Officer and each“covered employees” of the four other most highly compensatedCompany. For 2018 and after, our covered employees generally include anyone who (i) was the CEO or CFO at any time during the year, (ii) was one of the top three highest paid executive officers ofduring the fiscal year other than the CEO and CFO, and (iii) was a publicly held corporation to no more than $1 million per year. Certain compensation is exempt from this deduction limitation, including performance-based compensation paid under a plan that has been approved by shareholders and is administered by a committee of outside directors. The Company has not previously obtained shareholder approval of performance standardscovered employee for its compensation plans or arrangements because its executives generally do not have compensation arrangements that would exceed $1 million per year.

In light of Section 162(m), it is the policy ofany previous year after 2016. As with prior years, while the Compensation Committee to modify, where necessary, our executive compensation program to maximizeconsiders the tax deductibility of compensation paid to ouras one factor in determining executive officers when and if the $1 million threshold becomes an issue. At the same time,compensation, the Compensation Committee alsoretains the discretion to award compensation that is not deductible as it believes that it is in the overall performancebest interests of our executives cannot in all cases be reducedstockholders to a fixed formula and that the prudent use of discretion in determining pay levels ismaintain flexibility in our best interestsapproach to executive compensation in order to structure a program that we consider to be the most effective in attracting, motivating and those of our shareholders. Under some circumstances, the Compensation Committee’s use of discretion in determining appropriate amounts of compensation may be essential. In those situations where discretion is or can be used by the Compensation Committee, compensation might not be fully deductible.retaining key executives.  

Section 409A (“Section 409A”) of the Internal Revenue Code, of 1986, as amended, among other things, limits flexibility with respect to the time and form of payment of deferred compensation. If a payment or award is subject to Section 409A but does not meet the requirements that exempt such amounts from taxation under Section 409A, the recipient is subject to (i) income tax at the time the payment or award ceases to be subject to a substantial risk of forfeiture, (ii) an additional 20% tax at that time, and (iii) an additional tax equal to the amount of interest (at the underpayment rate of the Internal Revenue Code plus one percentage point) on the underpayment that would have accrued had the award been includable in the recipient’s income when first deferred, or if later, when the award ceases to be subject to a substantial risk of forfeiture. We have made modifications toPayments or awards under certain of our plans and arrangements such that payments or awards under those arrangements either are intended to not constitute “deferred compensation” for purposes of Section 409A (and therefore will be exempt from application of Section 409A) or, if they constitute “deferred compensation,” are intended to comply with the statutory provisions of Section 409A and final regulations issued with respect thereto.

Accounting Considerations

Accounting considerations play an important role in the design of our executive compensation program. Accounting rules require us to expense the fair value of restricted stock awards and the estimated fair value of our stock option grants, which reduces the amount of our reported profits. The Compensation Committee considers the amount of this expense when determining the amount of equity compensation to award.

Effect

Risk Assessment of Shareholder Advisory VoteIncentive Compensation Arrangements.

The Compensation Committee meets with the Company’s Chief Executive Officer and Chief Operating Officer, to discuss the overall risk structure, the significant risks identified within the Company, and the process by which the Chief Executive Officer and Chief Operating Officer analyze the risks associated with the executive compensation program. This process includes, among other things, a review of the Company’s programs and discussions with the Compensation Committee’s independent compensation consultant about the structure of the Company’s overall executive compensation program. This review includes the compensation potential under the Company’s incentive plans, the long-term view encouraged by the design and vesting features of the Company’s long-term incentive arrangements, and the extent to which the Compensation Committee and the Company’s management monitor the program. The Compensation Committee also identifies areas of enterprise risk of the Company and evaluates the degree to which participants in a plan perform functions that have the potential to significantly affect overall enterprise risk. The Compensation Committee then analyzes the extent to which design features have the potential to encourage behaviors that could significantly contribute to enterprise risk.

Based on its review, the Compensation Committee has determined that in 2022 the Company’s executive compensation program did not encourage the SEOs (as defined above) to take unnecessary and excessive risks that threaten the value of the Company, and that no changes to these plans were required for this purpose.

In 2013,addition to the incentive plans in a non-binding advisory vote,which our SEOs participate, the Company’s shareholders approved the Company’s compensation planCompany has incentive programs for its Chief Executive Officer, Chief Financial Officer,other officers and other three most highly paid executives.branch employees which reward performance. The Compensation Committee consideredreviewed all non-SEO programs and concluded that none of them, either individually or as a group, presented any material threat to our capital or earnings, encouraged taking undue or excessive risks, or encouraged manipulation or financial data in order to increase the size of an award. The rewards offered are typically based on subjective criteria and are not tied directly to Company performance. Several other plans reward loan production. Internal controls with different levels of review and approvals are designed to prevent manipulation to increase an award.

Compensation Committee Report

Compensation Discussion and Analysis.    The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 401(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this when determining compensation for its senior executive officers for fiscal year 2015. Proxy Statement.

Daniel J. Leonard (Chairman)

Donald L. Barton

Lynn R. Dickerson

James J. Gilbert

Allison C. Lafferty

H. Randolph Holder

Ronald C. Martin

Janet S. Pelton

Gary J. Strong

Danny L. Titus

Terrance P. Withrow

Summary of Cash and Certain Other Compensation

The following table provides certain summary information concerning the compensation earned, byof our Chief Executive Officer, Chief Financial Officer, and the four next most highly compensated executive officers for services rendered in all capacities to us for the fiscal years ended December 31, 20142020, 2021 and 20152022 in their respective executive officer capacities with the Company and the Bank:

Summary Compensation Table