Nominating Goverance Charter

Commercial Bancshares, Inc.

Governance/Nomination Committee

(As adopted on November 2012)

 

1. Mission Statement

The Corporate Governance/Nominating Committee (Committee) shall assist the full Board of Directors in fulfilling its responsibilities to assure that Commercial Bancshares, Inc. (Company) is governed in a manner consistent with the interests of the shareholders of the Company. Without limiting the foregoing, the Committee shall advise the Board with respect to: (a) Board organization, membership and function; (b) committee structure, membership and operations (including any committee authority to delegate to subcommittees); (c) the Company’s Corporate Governance Policy, its operation and any modifications to such policy; and (d) other matters relating to corporate governance and the rights and interest of the Company’s shareholders.

2. Membership and Qualification

The Committee shall consist of three or more Independent Directors (as defined in and determined pursuant to the rules and regulations of the NASDAQ. The Committee members shall be elected by the Board annually for terms of one year, or until their successors shall be duly elected and qualified. The Board, upon recommendation by the Committee, may remove any committee member at any time. Unless a Committee Chairman is elected by the full Board, the Committee members may designate a Chairman.

3. Meetings and Other Actions

The Committee shall meet at least once per quarter and at such additional times as may be necessary to carry out its responsibilities. Meetings may be called by the Chairman of the Committee or the Chairman of the Board. All meetings of and other actions by the Committee shall be held or otherwise taken pursuant to the Company’s bylaws, including bylaw provisions governing notices of meetings, waivers thereof, the number of Committee members required to take actions at meetings or by written consent, and other related matters.

  • Unless otherwise authorized by an amendment to this Charter, the Committee shall not delegate any of its authority to any subcommittee.
  •  Reports of meetings of and actions taken at meetings or by consent by the Committee since the most recent Board meeting (except to the extent covered in an interim report circulated to the Board) shall by made by the Committee Chairman or his/her delegate to the Board at its next regularly scheduled meeting following the Committee meeting or action and shall be accompanied by any recommendations from the Committee to the Board, In addition, the Committee Chairman or his/her delegate shall be available to answer any questions the other Directors may have regarding the matters considered and actions taken by the Committee.

4. Goals, Responsibilities and Authority

In carrying out its mission, the Committee shall have the following goals, responsibilities and authority:

Board of Directors

  •  Evaluate periodically the desirability of and recommend to the Board any changes in the size and composition of the Board.
  •  Evaluate and recommend directors to the Board in accordance with the general and specific criteria set forth below or determined as provided below:
  • General Criteria. Director selection should include at least enough Independent Directors (as defined in and determined pursuant to the rules and regulations of the NASDAQ) to satisfy the minimum number of Independent Directors required to fill all Board and Board committee positions required to be filled by Independent Directors, and such Independent Directors should have appropriate skills, experiences and other characteristics. Subject to the right of the Corporate Governance/Nominating Committee and the Board to decide otherwise when deemed appropriate, the Chief Executive Officer of the Company generally should be a director and, depending on the circumstances, certain other members of management, as well as certain individuals having relationships with the Company that prevent them from being Independent Directors, may be appropriate members of the Board. Each director should:
  1.  Be an individual of the highest character and integrity and have an inquiring mind, vision, a willingness to ask hard questions and the ability to work well with others;
  2.  Be free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper performance of the responsibilities of a director;
  3.  Be willing and able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board committee member (including developing and maintaining sufficient knowledge of the Company and its industry; reviewing and analyzing reports and other information important to Board and committee responsibilities; preparing for, attending and participating in Board and committee meetings; and satisfying appropriate orientation and continuing education guidelines); and
  4.  Have the capacity and desire to represent the balanced, best interests of the shareholders as a whole and not primarily a special interest group or constituency.

Specific Criteria. In addition to the foregoing general criteria, the Committee shall develop, reevaluate at least annually and modify as appropriate a set of specific criteria outlining the skills, experiences (whether in business or in other areas such as public service, academia or scientific communities), particular areas of expertise, specific backgrounds and other characteristics that should be represented on the Board to enhance the effectiveness of the Board and Board committees.

  •   These specific criteria should take into account any particular needs of the Company based on its business, size, ownership, growth objectives, community, customers and other characteristics and will need to be adjusted and refocused as these Company characteristics change and evolve.
  •   These specific criteria also should reflect the Company’s belief that gender and ethnic diversity provide additional perspectives that are helpful.
  •  The Committee should prepare at least annually a list of any specific criteria so identified that are not adequately represented on the Board, including when practical, an indication of the most significant deficiencies that the Committee should give the highest priority to remedying by identifying and assisting in recruiting new director candidates possessing the missing criteria.
  •  The pros and cons of having a former Chief Executive Officer of the Company serve on the Board should be decided based on the facts and circumstances in each individual instance. When the Chief Executive Officer resigns from that position, he/she should submit his/her resignation at the same time from the Board and, if applicable, from any Board committee permitting non-independent members and on which he/she serves. Whether the individual continues to serve on the Board and on any Board committee should be determined by the Committee and the Board based on all relevant circumstances. A former Chief Executive Officer shall never be considered an Independent Director.

C.Evaluate each new director candidate and each incumbent director before recommending that the Board nominate or re-nominate such individual for election or reelection (or that the Board elect such individual on an interim basis) as a director based on the extent to which such individual meets the general criteria above and will contribute significantly to satisfying the overall mix of specific criteria identified above and remedying any deficiencies therein.

  • Each annual decision to re-nominate incumbent directors should be based on a careful consideration of each such individual’s contributions, including the value of his/her experience as a director of the Company, the availability of new director candidates who may offer unique contributions, and the Company’s changing needs.

D. Diligently seek to identify potential director candidates who will strengthen the Board and remedy and perceived deficiencies in the specific criteria identified above. This should include establishing procedures for soliciting and reviewing potential nominees from directors and shareholders and for advising those who suggest nominees of the outcome of such review.

  • The Committee shall have sole authority to retain and terminate any search firm used to identify director candidates and to approve any such search firm’s fees and other terms of retention.

E. Recommend to the Board the candidates for director to be recommended by the Board for election at each annual meeting of shareholders and to be added to the Board at any other times due to Board expansions, director resignations or retirements or otherwise.

F. Monitor performance of directors based on the general criteria and the specific criteria applicable to each such director. If any serious problems are identified, work with such director to resolve such problems or, if necessary, seek such director’s resignation or recommend to the Board such person’s removal.

G. Develop and periodically evaluate initial orientation guidelines and continuing education guidelines for each member of the Board and each member of each Board Committee regarding his/her responsibilities as a director generally and as a member of any applicable Board committee, and monitor and evaluate annually (and at any additional time a new member joins the Board or any Board committee) each director’s cooperation in fulfilling such guidelines. Such guidelines shall take into account all relevant factors, including the nature of each individual’s responsibilities and related background and any particular complexities relating to the Company’s business, financial statements or other characteristics. These guidelines may impose higher requirements for directors who are members of certain Board committees than for those who are not and may, in appropriate circumstances, impose higher or lower requirements for a particular director based on his/her background and/or occupation.

Board Committees

H. Evaluate at least annually the performance, authority, operations, charter and composition of each standing or ad hoc Board committee (including any authority of a committee to delegate to a subcommittee) and the performance of each committee member and recommend any changes considered appropriate in the authority, operations, charter, number or membership of each committee. If any serious problems are identified with a committee member, the Committee shall work with such person to resolve such problems or, if necessary, seek such person’s resignation or recommend to the Board such person’s removal from the applicable committee(s).

  • Submit to the Board annually (and at any additional times that any committee members are to be selected) candidates for membership on each Board committee (and for the chairman of each committee.) The Committee will coordinate closely with the full Board as to the selection of an Independent Director who will qualify to serve on the Audit Committee as a designated “audit committee financial expert.”

Corporate Governance

  • Develop and recommend to the Board a Corporate Governance Policy and any changes therein, setting forth the corporate governance principles applicable to the Company.
  • Monitor and make recommendations to the Board on other matters of Board policies and practices relating to corporate governance.
  • Review and make recommendations to the Board regarding proposals of shareholders that relate to corporate governance.

Other Matters

The Committee also shall undertake such additional activities within the scope of its primary functions as the Committee may from time to time determine.

5. Additional Resources

The Committee shall have the right to use reasonable amounts of time of the Company’s internal and independent accountants, internal and outside lawyers and other internal staff and also shall have the right to hire independent experts, lawyers and other consultants to assist and advise the Committee in connection with its responsibilities. The Committee shall keep the Company’s Finance Department advised as to the general range of anticipated expenses for outside consultants.