Executive Compensation Committee

FIRST FINANCIAL SERVICE CORPORATION
EXECUTIVE COMPENSATION COMMITTEE CHARTER

PURPOSE

The Executive Compensation Committee of First Financial Service Corporation (the “Company”) oversees the design and implementation of the Company’s executive compensation philosophy and policy. The objective of that compensation philosophy and policy is to attract and retain qualified, energetic officers and associates who are enthusiastic about the Company’s mission and culture and to promote an ownership mentality among officers and key employees. Compensation must be fundamentally fair to our shareholders, employees, and customers.

COMMITTEE MEMBERSHIP

The Executive Compensation Committee shall be composed of not less than three (3) Directors. In addition to qualifying as “independent directors” within the meaning of the rules of The NASDAQ Stock Exchange, members of the Committee shall have no current or prior relationships that would create concerns as to the member’s ability to exercise independent judgment in compensation decision-making. The Board shall elect Committee members annually. The Chairman of the Committee may be elected by the Board or by the majority vote of the Committee’s members.

COMMITTEE AUTHORITIES AND RESPONSIBILITIES

The Committee shall have general authority and responsibility for overseeing the design and implementation of the compensation policies of the Company and First Federal Savings Bank, including communications regarding those policies with Board and with shareholders through the proxy statement. Specific responsibilities include:

1. Establishing an executive compensation philosophy and policy that fairly rewards executives for performance benefiting the Company and its shareholders, rewards teamwork, and effectively attracts and retains executives who can lead and manage the Company.


2. Evaluating the performance of the Chief Executive Officer and determining the salary, incentive compensation and other elements of the Chief Executive Officer’s total compensation;


3. Evaluating the performance of the Company’s other executive officers and determining their salaries, incentive compensation and other elements of total compensation, taking into account the recommendations of the Chief Executive Officer on behalf of the entire management team;


4. Approving and administering cash incentive compensation plans and deferred compensation plans for the Executives, including any modifications to such plans, and annually establish the performance objectives for the incentive plans;


5. Approving and administering all employee equity plans.


6. Reviewing and recommending for approval by the Board of Directors new plans or material changes in existing plans;


7. Reviewing and approving the discussion of the Company’s executive compensation in the proxy statement for the annual meeting of shareholders, including the objectives of the Company’s compensation policies, what those policies reward, and the relationship of executive compensation to the Company’s performance;


8. Reviewing the Company’s executive management and the steps being taken to assure the succession of qualified officers at the Company;


9. Retaining (and terminating) any compensation consultant engaged to assist in the evaluation of the executive compensation policies and practices of the Company, with exclusive authority to select the consultant, subject to approval of the fees and other terms of the firm’s engagement by the full Board;


10. Obtaining advice and assistance from internal or external legal, accounting or other advisors as required for the performance of its duties;


11. Such other duties as delegated by the Board of Directors.

MINUTES

Minutes will be kept of each meeting of the Committee and will be available to each member of the Board. Any action of the Committee (other than actions for which the Committee has sole authority as set forth herein) shall be subject to revision, modification, rescission or alteration by the Board, to the extent permitted by the rules of The NASDAQ Stock Exchange, provided that no rights of third parties shall be affected by any such revision, modification, rescission or alteration.

AMENDMENTS

This Executive Compensation Committee Charter may be amended in whole or in part with the approval of a majority of the Board.