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Investor Relations : HCB Nominating Committee Charter

HARVEST COMMUNITY BANK
NOMINATING COMMITTEE CHARTER

I. Purpose of the Nominating Committee

The Board of Directors (the "Board") of Harvest Community Bank, a New Jersey chartered commercial bank (the "Bank"), has established the Nominating Committee of the Board (the "Committee") for the following purposes:

(A) To identify individuals qualified to become members of the Board;

(B) To consider, in accordance with the procedures set forth in this charter, the nomination by any shareholder of the Bank of a candidate for election as a director of the Bank, provided that the shareholder has submitted a written request and related information to the Secretary of the Bank on behalf of the Committee at the required time prior to any meeting of the shareholders of the Bank at which directors are to be elected, together with the written consent of such candidate to serve as a director of the Bank;

(C) To recommend to the Board, prior to the solicitation of proxies, a slate of qualified candidates for election to the Board at any meeting of shareholders of the Bank at which directors are to be elected and, in the case of a vacancy on the Board, a candidate to fill that vacancy;

(D) To recommend to the Board the individual or individuals to be elected as the chairman of the Board and the chief executive officer of the Bank;

(E) To consider the chief executive officer of the Bank's recommendations for officers of the Bank and, where appropriate, recommend such to the Board;

(F) To recommend to the Board the assignment to, and rotation of, the various members of the committees of the Board; and

(G) To oversee periodic evaluations of the Board and management of the Bank to increase the overall effectiveness of the Board, as a whole, and management of the Bank. 

II. Committee Membership

The members of the Committee are appointed annually by the Board. The Committee must be comprised of at least three and no more than five members of the Board. To the extent permitted under the applicable standards established by any exchange or system upon which the Bank's securities are listed, quoted or traded and any standards of independence as may be prescribed for purposes of any federal or state securities, tax, banking or other laws relating to the Committee's duties and responsibilities, the chairman of the Board and the chief executive officer of the Bank shall be appointed annually by the Board to serve as members of the Committee.  All other members of the Committee must qualify as independent directors ("Independent Directors") under the applicable standards established by any exchange or system upon which the Bank's securities are listed, quoted or traded and any standards of independence as may be prescribed for purposes of any federal or state securities, tax, banking or other law relating to the Committee's duties and responsibilities.  In addition to, and not in limitation of, the foregoing, an Independent Director may not be an officer or employee of the Bank or any of its subsidiaries and may not have any relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a member of the Committee.

A Committee member shall receive the compensation paid to him or her in his or her capacity as a member of the Board and as a member of the Committee, in each case as recommended by the Compensation Committee and approved annually by the Board. 

Each member of the Committee shall serve until such member's successor is elected and qualified or until such individual's earlier resignation or removal as a director and/or officer of the Bank.  Any member of the Committee may resign his or her position as a member of the Committee upon notice given in writing or by electronic transmission to the Board.  A member of the Committee may be removed from the Committee upon the majority vote of the Board. 

If a Chairman of the Committee is not appointed by the Board, the members of the Committee may designate a Chairman by majority vote of the full Committee membership. The Committee may also appoint a Secretary of the Committee, who need not be a Director.

The Committee shall meet as often as may be deemed necessary or appropriate by the Chairman of the Committee and at such times and places and by such means as the Chairman of the Committee shall determine. A majority of the members of the Committee shall constitute a quorum.

III.  Committee Powers, Authority, Duties and Responsibilities

The responsibilities of a member of the Committee are in addition to those responsibilities set out for a member of the Board. Among its duties and responsibilities, the Committee shall:

(A) Conduct continuing study of the size, structure, and composition of the Board and periodically recommend to the Board whether to increase the number of directors, or, in the event of the death, disability, resignation, refusal to stand for reelection or removal of a director, whether to decrease the number of directors.

(B) Seek out possible candidates to fill Board positions, and aid in attracting qualified candidates to the Board.

(C) Evaluate nominees for director submitted by any shareholder of the Bank.

(D) Recommend to the Board, prior to the solicitation of proxies, a slate of qualified candidates for election to the Board at each meeting of shareholders of the Bank at which directors are to be elected and, in the case of a vacancy on the Board, a candidate to fill that vacancy. Factors considered by the Committee in assessing director candidates should include, at a minimum, the following:

(1) the individual's health, business judgment and attendance at Board and committee meetings of the directors;

(2) the individual's understanding of business and financial affairs generally and the complexities of a banking organization (although a career in business is not essential, the nominee shall have a proven record of competence and accomplishments through leadership in industry, education, the professions or government, and should be willing to maintain a committed relationship with the Bank as a director);

(3) a genuine interest in representing all of the shareholders of the Bank and the interests of the Bank overall;

(4) a willingness and ability to spend the necessary time required to function effectively as a director;

(5) an open-minded approach to matters and the resolve to independently analyze matters presented for consideration;

(6) a reputation for honesty and integrity beyond question;

(7) the ability of the person to secure all required regulatory approvals prior to serving;

(8) the distribution of ages and experiences of the members of the Board and other matters relevant to the proper carrying out of the Bank's responsibilities to its customers, shareholders and the public; and

(9) a majority of the members of the Board should be Independent Directors.

(E) Recommend annually to the Board an individual or individuals for election as chairman of the Board and chief executive officer of the Bank.

(F) Recommend to the Board the assignment to, and rotation of, the various members of the committees of the Board.

(G) Recommend to the Board committee members to serve as chairs of such Board committees.

(H) Evaluate the performance of incumbent directors upon the expiration of their terms.

(I) Prepare evaluation forms for all Board members and all members of Board committees and, at least annually, receive comments from all members of the Board and report to the Board with an assessment of the Board's performance. The assessment of the Board's performance will be discussed with the Board at either the December or January Board meeting each year.

(J) Oversee the orientation and training of new directors.

(K) Recommend ways in which the Board could improve its performance.

(L) Review and assess the adequacy of this charter at least annually and recommend to the Board any proposed changes to this charter.

(M) Annually review its own performance.

(N) Review at least annually the Bank's succession plans for its chief executive officer and other executive officers and make recommendations to the Board regarding the same.

(O) Report to the Board on the Committee's activities at each Board meeting.

(P) Maintain minutes of its meetings, provide copies of such minutes to the Board, and maintain any other records relating to the meetings that are deemed necessary by the Committee.

In addition to the matters set forth herein, the Committee will perform such other functions as required by law, the listing requirements of any stock exchange on which the Bank's securities are listed, quoted or traded, the Bank's Certificate of Incorporation or Bylaws, and/or Board resolution.

The Committee may form and delegate authority to subcommittees or Committee members where appropriate.

IV. Procedures for Evaluating Board Candidates

The Nominating Committee will observe the following procedures in identifying and evaluating candidates for election to the Bank's Board of Directors.

(A) The Bank is of the view that the continuing service of qualified incumbents promotes stability and continuity in the board room, contributing to the Board's ability to work effectively as a collective body, while giving the Bank the benefit of the familiarity and insight into the Bank's affairs that its directors have accumulated during their tenure. Accordingly, the process of the Committee for identifying nominees shall reflect the Bank's practice of re-nominating incumbent directors who continue to satisfy the Committee's criteria for membership on the Board, whom the Committee believes continue to make important contributions to the Board and who consent to continue their service on the Board.

(B) Consistent with this policy, in considering candidates for election at annual meetings of shareholders, the Committee will first determine the incumbent directors whose terms expire at the upcoming meeting and who wish to continue their service on the Board.

(C) The Committee will evaluate the qualifications and performance of the incumbent directors that desire to continue their service. In particular, as to each such incumbent director, the Committee will:

  • consider if the director continues to satisfy the minimum qualifications for director candidates adopted by the Committee; 
  • review the assessments of the performance of the director during the preceding term made by the Committee; and 
  • determine whether there exist any special, countervailing considerations against re-nomination of the director.

(D) If the Committee determines that:

  • an incumbent director consenting to re-nomination continues to be qualified and has satisfactorily performed his or her duties as director during the preceding term; and 
  • there exist no reasons, including considerations relating to the composition and functional needs of the Board as a whole, why in the Committee's view the incumbent should not be re-nominated, the Committee will, absent special circumstances, propose the incumbent director for re-election.

(E) The Committee will identify and evaluate new candidates for election to the Board where there is no qualified and available incumbent, including for the purpose of filling vacancies arising by reason of the resignation, retirement, removal, death or disability of an incumbent director or a decision of the directors to expand the size of the Board.

(F) The Committee will solicit recommendations for nominees from persons that the Committee believes are likely to be familiar with qualified candidates. These persons may include members of the Board, including members of the Committee, and management of the Bank. The Committee may also determine to engage a professional search firm to assist in identifying qualified candidates; where such a search firm is engaged, the Committee shall set its fees and scope of engagement.

(G) As to each recommended candidate that the Committee believes merits consideration, the Committee will:

  • cause to be assembled information concerning the background and qualifications of the candidate, including information concerning the candidate required to be disclosed in the Bank's proxy statement under the applicable rules of the SEC and the FDIC and any relationship between the candidate and the person or persons recommending the candidate; 
  • determine if the candidate satisfies the minimum qualifications required by the Committee of candidates for election as director; 
  • determine if the candidate possesses any of the specific qualities or skills that under the Committee's policies must be possessed by one or more members of the Board; 
  • consider the contribution that the candidate can be expected to make to the overall functioning of the Board; and 
  • consider the extent to which the membership of the candidate on the Board will promote diversity among the directors.

(H) It is appropriate for the Committee, in its discretion, to solicit the views of the members of the Bank's senior management and other members of the Board regarding the qualifications and suitability of candidates to be nominated as directors.

(I) In its discretion, the Committee may designate one or more of its members (or the entire Committee) to interview any proposed candidate.

(J) Based on all available information and relevant considerations, the Committee will select a candidate who, in the view of the Committee, is most suited for membership on the Board.

(K) In making its selection, the Committee will evaluate candidates proposed by shareholders under criteria similar to the evaluation of other candidates, except that the Committee, for each annual meeting of the Bank's shareholders, may consider only one candidate recommended by any shareholder or group of shareholders acting in concert, and may consider, as one of the factors in its evaluation of shareholder recommended nominees, the size and duration of the interest of the recommending shareholder or shareholder group in the equity of the Bank. The Committee may also consider the extent to which the recommending shareholder intends to continue holding its interest in the Bank, including, in the case of nominees recommended for election at an annual meeting of shareholders, whether the recommending shareholder intends to continue holding its interest at least through the time of such annual meeting. 

(L) The Committee shall maintain appropriate records regarding its process of identifying and evaluating candidates for election to the Board.

(M) The Committee shall adopt a formal policy on shareholder recommendation of candidates for election as director which is consistent with the terms and provisions of this charter. Upon approval of such policy by the Board, the Committee shall cause the policy to be posted on the Bank's website and to be included in each proxy statement pertaining to the election of directors of the Bank.

V. Assistance from Others

The Committee may engage external advisors and consultants, to the extent determined appropriate by the Committee, to facilitate the performance of the functions of the Committee. All external advisors engaged by the Committee shall report directly to the members of the Committee. Specifically, the Committee shall have the sole authority to retain and terminate any consultant to be used to assist in the search and evaluation of potential directors and members of Board committees and shall have the sole authority to approve the consultant's fees and other retention terms. The Committee has the same authority to retain other experts to advise or assist it, including independent counsel or others. The Committee may also request reports from the Chief Executive Officer, the Chief Financial Officer, the Vice President of Human Resources or any other officer of the Bank.

VI. Reliance Upon Others

In performing their responsibilities, Committee members are entitled to rely in good faith on information, reports, opinions, or statements prepared or presented by:

(A) One or more officers of the Bank whom the Committee member reasonably believes to be reliable and competent in the matters presented;

(B) Counsel, independent auditors, or other persons as to matters which the Committee member reasonably believes to be within the professional or expert competence of such person; or

(C) Another committee of the Board as to matters within its designated authority which committee the Committee member reasonably believes to merit confidence.

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