BELMONT RIDGE BANK NA
CHARTER OF THE GOVERNANCE & NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS
Amended and Restated
Draft Prepared by Calderwood & Harkness LLP
Draft dated July 2025 — For Board Review and Approval
This draft revises and restates the Governance & Nominating Committee Charter last amended March 2022. This Charter has been prepared in connection with remediation of the Office of the Comptroller of the Currency Matters Requiring Attention letter SA-2024-0315 (November 15, 2024) and the Federal Reserve Board supervisory letter SR-BHC-2024-1107 (December 3, 2024).
Calderwood & Harkness LLP Matter No. 1045-00003
Drafter: Brendan Walsh, Lead Associate Reviewed by: Colette Whitman, Responsible Partner
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ARTICLE I — PURPOSE
The Governance & Nominating Committee (the "Committee") is a standing committee of the Board of Directors (the "Board") of Belmont Ridge Bank NA ("BRB" or the "Bank"), a national banking association chartered by the Office of the Comptroller of the Currency (the "OCC") under Charter Number 24-0738. BRB is a wholly owned subsidiary of Belmont Ridge Financial Group, Inc. ("BRFG"), a Delaware corporation and registered bank holding company supervised by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The common stock of BRFG is listed on the Nasdaq Stock Market LLC ("Nasdaq") under the ticker symbol "BRBK."
The principal purposes of the Committee are as follows:
1. Director Identification and Nomination. To identify, evaluate, and recommend to the Board qualified individuals for nomination as directors of BRB and BRFG, taking into account the evolving needs of the Bank, applicable regulatory expectations, and the diversity of skills, backgrounds, and perspectives necessary for effective board oversight of a complex financial institution.
2. Corporate Governance Guidelines. To develop, maintain, and recommend to the Board corporate governance guidelines and principles applicable to BRB, ensuring that such guidelines reflect sound governance practices, regulatory requirements, and evolving industry standards.
3. Board and Committee Evaluations. To oversee the evaluation of the Board, its standing committees, and individual directors, including the design and implementation of evaluation methodologies and the reporting of evaluation results and recommendations to the full Board.
4. Director Skill-Matrix Framework. To develop and maintain a comprehensive director skill-matrix framework (the "Skill Matrix") to ensure that the Board possesses the collective competencies, expertise, and experience areas required for effective oversight of a national banking association with total consolidated assets exceeding $10 billion. The Skill Matrix shall be used to guide director recruitment priorities and shall be updated at least annually to reflect changes in the Bank's strategic direction, risk profile, and regulatory environment.
5. Committee Chair Succession Planning. To establish and oversee a formalized succession planning process for committee chairs and Board leadership positions, including the positions of Board Chair and Lead Independent Director, in order to promote continuity of leadership, orderly transitions, and alignment of leadership qualifications with the Bank's governance needs.
6. Governance Compliance Oversight. To oversee governance practices to ensure compliance with all applicable laws and regulations, including without limitation the rules and regulations of the OCC, the Federal Reserve, the Federal Deposit Insurance Corporation (the "FDIC"), the Securities and Exchange Commission (the "SEC"), the Nasdaq listing standards, the OCC's heightened standards for national banks with total assets exceeding $10 billion (12 C.F.R. Part 30, Appendix D), and Federal Reserve supervisory expectations as articulated in supervisory guidance and examination communications.
This Charter supersedes in its entirety the prior Governance & Nominating Committee Charter, last amended in March 2022. This Charter is adopted in furtherance of the Bank's remediation plan submitted to the OCC on February 28, 2025, as acknowledged by the OCC with comments on April 4, 2025, with a remediation deadline of December 31, 2025. The revisions set forth herein are specifically responsive to the governance-related findings identified in OCC Matters Requiring Attention letter SA-2024-0315 (dated November 15, 2024) and the parallel observations contained in Federal Reserve supervisory letter SR-BHC-2024-1107 (dated December 3, 2024), each of which identified the need for enhanced board governance processes, including the adoption of a formal director skill-matrix framework and a documented committee chair succession planning process.
ARTICLE II — COMPOSITION AND MEMBERSHIP
Section 2.1 — Number of Members
The Committee shall consist of no fewer than four (4) members of the Board. The Board may, in its discretion, appoint additional members to the Committee from time to time, provided that each such member satisfies the independence requirements set forth in Section 2.2 of this Charter.
As of the date of this Charter, the Committee is composed of four (4) members, all of whom satisfy the applicable independence requirements. The current Chair of the Committee is Margaret R. Ellsworth, who has served as an independent director since 2018 and also serves as Chair of the Board.
Section 2.2 — Independence Requirements
Each member of the Committee shall satisfy the independence requirements applicable to the Committee, as determined by the Board. Specifically, each member of the Committee must be "independent" as defined by each of the following standards:
(a) Nasdaq Listing Rule 5605(a)(2). Each member must qualify as an "independent director" under Nasdaq Listing Rule 5605(a)(2) and the related interpretive guidance issued by Nasdaq. BRFG, the parent holding company of the Bank, is listed on the Nasdaq Stock Market under the ticker symbol "BRBK," and the Bank is subject to Nasdaq independence requirements as applied through the holding company's listing obligations.
(b) Bank Director Independence Standards. Each member must satisfy the Bank's Director Independence Standards, as most recently amended and approved by the Board. The Director Independence Standards establish categorical standards for determining director independence and are designed to meet or exceed the requirements of applicable listing standards and regulatory guidance.
(c) OCC Heightened Standards. Each member must satisfy the independence expectations set forth in the OCC's heightened standards for national banks with total consolidated assets exceeding $10 billion, as codified in 12 C.F.R. Part 30, Appendix D, and as further articulated in OCC supervisory guidance and examination communications.
(d) Federal Reserve Supervisory Expectations. Each member must satisfy the independence expectations of the Federal Reserve for boards of directors of bank holding companies, as set forth in applicable supervisory guidance, including SR 21-3 and related guidance on effective boards of directors.
No member of the Committee may be an officer or employee of the Bank, BRFG, or any subsidiary or affiliate of the Bank or BRFG. Directors who serve in a management capacity are not eligible for membership on the Committee. As of the date of this Charter, the following directors serve in management capacities and are therefore ineligible for Committee membership: Richard A. Montague, Chief Executive Officer and President; Franklin D. Reeves, Chief Operating Officer; and Alma G. Brashear, Executive Vice President and Head of Digital Banking.
The Board shall make affirmative determinations of independence for each Committee member at the time of appointment and at least annually thereafter, and such determinations shall be documented in the minutes of the Board meeting at which they are made.
Section 2.3 — Appointment and Term
Members of the Committee shall be appointed annually by the Board upon the recommendation of the Committee. Each Committee member shall serve until the earliest to occur of the following: (i) such member's successor is duly appointed by the Board; (ii) such member's resignation from the Committee; or (iii) such member ceasing to be a member of the Board for any reason, including expiration of term, failure to be re-elected by shareholders, resignation from the Board, or removal from the Board.
The Board may remove any member of the Committee at any time, with or without cause, by the affirmative vote of a majority of the directors then in office. Any vacancy on the Committee resulting from removal, resignation, or other cause shall be filled by the Board upon the recommendation of the Committee, and any director so appointed shall satisfy the independence requirements of Section 2.2.
Section 2.4 — Chair
The Board shall designate a Committee Chair from among the Committee's independent members. The Committee Chair shall have the following responsibilities:
(a) Preside at all meetings of the Committee, including executive sessions held without management present.
(b) Set the agenda for each meeting of the Committee in consultation with the General Counsel and Corporate Secretary of the Bank (currently James W. Prescott) and, as appropriate, with outside counsel and advisors retained by the Committee.
(c) Report to the full Board at the next regularly scheduled Board meeting following each Committee meeting on the matters discussed and actions taken by the Committee.
(d) Serve as the primary point of contact between the Committee and the Board, management, and outside advisors on governance and nominating matters.
(e) Coordinate with the chairs of other Board committees on matters of overlapping responsibility.
In the event of the absence or unavailability of the Committee Chair at any meeting, the remaining independent members of the Committee present at such meeting shall select a temporary presiding member from among their number to serve as acting chair for that meeting. Such selection shall be documented in the minutes of the meeting.
Section 2.5 — Qualifications
Members of the Committee should collectively possess experience and expertise in one or more of the following areas: corporate governance, legal and regulatory compliance, financial services and banking, executive leadership, risk management, human capital management, public-company board service, or other areas relevant to the oversight of a nationally chartered bank with total consolidated assets exceeding $10 billion.
At least one member of the Committee should have significant experience with regulatory expectations for board governance at financial institutions, including familiarity with OCC heightened standards, Federal Reserve supervisory expectations, and the corporate governance requirements applicable to publicly traded bank holding companies. The Committee should also seek to maintain diversity among its members in terms of professional background, skills, experience, gender, race, ethnicity, and other dimensions of diversity.
The qualifications of Committee members shall be evaluated in the context of the Committee's responsibilities under this Charter and shall be reassessed annually as part of the Committee's overall annual review of Board composition and director qualifications.
ARTICLE III — DUTIES AND RESPONSIBILITIES
The Committee shall have the following duties and responsibilities, in addition to any other duties that may be delegated to the Committee by the Board from time to time consistent with this Charter, the Bank's bylaws, and applicable law.
Section 3.1 — Director Identification, Evaluation, and Nomination
3.1(a) — Identification of Candidates
The Committee shall develop and maintain criteria for identifying prospective director candidates. In developing such criteria, the Committee shall consider the diversity of background, experience, skills, and perspectives that candidates would bring to the Board, as well as the current and anticipated needs of the Bank and its regulatory environment. The Committee shall actively seek candidates who would enhance the Board's collective qualifications as reflected in the Skill Matrix described in Section 3.1(b) below.
The Committee shall consider candidates recommended by Board members, members of management, shareholders of BRFG, and third-party executive search firms retained by the Committee. The Committee shall establish and maintain procedures for receiving and evaluating shareholder recommendations for director candidates, which procedures shall be disclosed in the Bank's annual proxy statement.
The Committee shall also consider shareholder proposals and nominations submitted pursuant to the Bank's bylaws, BRFG's bylaws, and applicable SEC regulations, including any applicable proxy access provisions. The Committee shall work with the General Counsel and outside counsel to ensure that the Bank's procedures for receiving and processing shareholder nominations comply with all applicable legal and regulatory requirements.
3.1(b) — Director Skill-Matrix Framework
This Section 3.1(b) is a new provision adopted in response to Finding 4 of OCC Matters Requiring Attention letter SA-2024-0315 (November 15, 2024) and the related observations in Federal Reserve supervisory letter SR-BHC-2024-1107 (December 3, 2024).
The Committee shall develop, maintain, and annually update a comprehensive Board Skills and Experience Matrix (the "Skill Matrix") that identifies the core competencies, expertise, and experience areas deemed essential for effective Board oversight of the Bank. The Skill Matrix shall serve as a foundational governance tool for director recruitment, Board composition planning, and ongoing evaluation of the Board's collective qualifications.
The Skill Matrix shall include, at a minimum, the following competency categories:
(i) Financial services and banking industry experience, including commercial banking, retail banking, and community banking;
(ii) Risk management and enterprise risk oversight, including credit risk, market risk, operational risk, liquidity risk, and model risk;
(iii) Financial literacy and accounting expertise, including experience with financial reporting, auditing, and internal controls over financial reporting;
(iv) Regulatory and compliance experience, including experience with the OCC, Federal Reserve, FDIC, SEC, and state banking regulators;
(v) Technology, cybersecurity, and digital banking, including experience with information technology strategy, cybersecurity risk management, and digital transformation initiatives;
(vi) Legal and corporate governance, including experience with corporate law, securities law, regulatory enforcement, and board governance practices;
(vii) Human capital management and executive compensation, including experience with talent management, leadership development, and executive compensation program design;
(viii) Bank Secrecy Act / Anti-Money Laundering ("BSA/AML") and financial-crimes compliance, including experience with BSA/AML program design, suspicious activity reporting, and sanctions compliance;
(ix) Capital markets and investment management, including experience with debt and equity capital markets, treasury management, and institutional investment management;
(x) Strategic planning and mergers and acquisitions ("M&A"), including experience with corporate strategy development, acquisition due diligence, and integration planning;
(xi) Public-company board experience, including prior service on the board of directors of a publicly traded company or a registered bank holding company; and
(xii) Diversity considerations, including gender, race and ethnicity, age, and geographic background.
The Committee shall map each sitting director's qualifications against the competency categories in the Skill Matrix and shall identify any material gaps in the Board's collective competencies. Such mapping shall be conducted on an individual director basis, with each director's self-identified areas of expertise supplemented by the Committee's own assessment, as informed by the director's biographical information, professional experience, and demonstrated contributions to Board and committee deliberations.
The Skill Matrix shall be used to guide recruitment priorities for new director candidates. When one or more competency gaps are identified, the Committee shall consider those gaps as a priority factor in its identification and evaluation of prospective candidates. The Committee shall disclose the Skill Matrix, in summary form, in the Bank's annual proxy statement to provide shareholders with transparency regarding the Board's collective qualifications and the Committee's approach to Board composition planning.
The Committee shall present the Skill Matrix to the full Board at least annually, and shall update the Skill Matrix whenever Board composition changes as a result of director departures, new appointments, or other changes in the Board's membership. The Skill Matrix framework shall be consistent with OCC expectations for boards of institutions with total consolidated assets exceeding $10 billion, including the OCC's heightened standards, and with Federal Reserve supervisory guidance regarding effective boards of directors.
An illustrative template for the Skill Matrix is attached to this Charter as Appendix A.
3.1(c) — Evaluation of Candidates
The Committee shall conduct thorough due diligence on each prospective director candidate prior to recommending such candidate for nomination or appointment to the Board. Such due diligence shall include, without limitation:
(a) Background checks, including criminal background checks, credit checks, and regulatory history checks, conducted by an independent third-party firm retained by the Committee or the Bank;
(b) An independence assessment under the standards set forth in Section 2.2 of this Charter and the Bank's Director Independence Standards;
(c) A review of potential conflicts of interest, including business relationships with the Bank or BRFG, family relationships with officers or directors, and any other circumstances that could impair the candidate's independence or objectivity;
(d) An evaluation of the candidate's qualifications against the competency categories in the Skill Matrix, with particular attention to any identified gaps in the Board's collective competencies;
(e) An assessment of the candidate's ability to devote sufficient time and attention to Board and committee service, taking into account the candidate's other board memberships, employment responsibilities, and professional commitments;
(f) An evaluation of the candidate's compliance with any overboarding policies adopted by the Board, including any limits on the number of public-company boards on which a director may serve; and
(g) Consideration of the interplay between BRB and BRFG board composition, noting that eleven (11) of thirteen (13) current Bank directors also serve on the board of directors of BRFG.
The Committee shall document its evaluation of each candidate and the basis for its recommendation to the Board.
3.1(d) — Recommendation to the Board
The Committee shall recommend to the Board a slate of director nominees for election at each annual meeting of shareholders of BRFG. The next annual meeting of shareholders is to be scheduled in 2026; the 2025 Annual Meeting of Shareholders was held on May 14, 2025. The Committee shall also recommend to the Board candidates to fill any vacancies on the Board arising between annual meetings, whether as a result of director resignations, retirements, removal, expansion of the Board, or other circumstances.
In making its recommendations, the Committee shall consider the results of its due diligence, the candidate's alignment with the Skill Matrix, the views of other directors and management, and any applicable regulatory requirements or supervisory expectations. The Committee shall present its recommendations to the Board in sufficient time for the Board to consider and act upon them in advance of the deadline for filing the Bank's annual proxy statement with the SEC.
Section 3.2 — Corporate Governance Guidelines
The Committee shall develop, periodically review, and recommend to the Board corporate governance guidelines for the Bank. The Bank's current corporate governance guidelines are the Amended and Restated Corporate Governance Guidelines, which are being updated from the version last amended in March 2022 as part of the governance remediation process.
The Committee shall review and recommend changes to the Bank's Director Independence Standards (last amended March 2022) and the Board Code of Conduct (last amended January 2020) at least annually. Such reviews shall consider changes in applicable laws, regulations, and listing standards, as well as evolving governance best practices and shareholder expectations.
The Committee shall monitor regulatory developments affecting governance practices at financial institutions, including guidance issued by the OCC, the Federal Reserve, the FDIC, and the SEC, as well as changes to Nasdaq listing standards. The Committee shall assess the impact of such developments on the Bank's governance practices and recommend appropriate changes to the Board.
The Committee shall coordinate with the Bank's General Counsel and outside counsel on governance-related regulatory requirements. Calderwood & Harkness LLP is currently engaged as outside governance advisory counsel in connection with the Bank's governance remediation efforts; Meridian Cobalt LLP serves as general outside corporate counsel for the Bank and BRFG.
Section 3.3 — Committee Chair Succession Planning
This Section 3.3 is a new provision adopted in response to Finding 4 of OCC Matters Requiring Attention letter SA-2024-0315 (November 15, 2024) and the related observations in Federal Reserve supervisory letter SR-BHC-2024-1107 (December 3, 2024).
The Committee shall establish and oversee a formalized succession planning process for each Board committee chair position and for Board leadership positions. The succession planning process shall be designed to promote continuity of leadership, ensure orderly transitions, and maintain alignment between leadership qualifications and the Bank's governance needs.
The Committee shall maintain a documented succession plan for each of the following positions:
(a) Audit Committee Chair (current incumbent: Thomas J. Callahan);
(b) Risk Committee Chair (current incumbent: Priya Venkataraman);
(c) Compensation & Human Capital Committee Chair (current incumbent: Sandra M. Okafor);
(d) Technology & Innovation Committee Chair (current incumbent: Lawrence B. Huang);
(e) Governance & Nominating Committee Chair (current incumbent: Margaret R. Ellsworth);
(f) Board Chair (current incumbent: Margaret R. Ellsworth); and
(g) Lead Independent Director (current incumbent: David K. Sorrento).
The succession plan shall identify, for each chair and leadership position, at least one potential successor from among the current independent directors. In identifying potential successors, the Committee shall take into account the following factors:
(i) the potential successor's relevant experience and expertise, as reflected in the Skill Matrix;
(ii) the potential successor's tenure on the Board and on the relevant committee;
(iii) the potential successor's demonstrated leadership capabilities and contributions to Board and committee deliberations;
(iv) the potential successor's willingness and availability to serve in the leadership position; and
(v) the need for diversity of perspective and background in Board leadership positions.
The Committee shall consider the staggering of chair transitions to avoid simultaneous turnover in multiple leadership positions, which could disrupt the Board's effectiveness and institutional knowledge. Succession planning considerations shall include anticipated director retirements, any term limits adopted by the Board, and regulatory expectations regarding board refreshment and rotation of committee leadership.
The succession plan shall be reviewed and updated at least annually by the Committee and shall be presented to the full Board in executive session for discussion and feedback. The annual review shall take into account any changes in Board composition, director performance, regulatory expectations, and the Bank's strategic direction.
In the event of an unexpected departure of a committee chair or Board leadership position holder, the succession plan shall provide for an interim appointment process. The Committee shall recommend a successor to the Board within thirty (30) days of the departure, taking into account the succession plan, the Skill Matrix, and the needs of the relevant committee or leadership position. Pending the appointment of a permanent successor, the Committee may recommend an interim appointment to ensure continuity of leadership.
The succession plan shall be documented in a confidential memorandum maintained by the Corporate Secretary (currently James W. Prescott) and stored in a manner consistent with the Bank's information security and records retention policies. The succession plan shall be made available to the OCC upon request as part of the Bank's governance remediation commitments under OCC MRA letter SA-2024-0315.
An illustrative template for the Committee Chair Succession Plan is attached to this Charter as Appendix B.
Section 3.4 — Annual Review of Director Qualifications and Board Composition
This Section 3.4 is an enhanced provision adopted in response to Finding 4 of OCC Matters Requiring Attention letter SA-2024-0315 (November 15, 2024) and the related observations in Federal Reserve supervisory letter SR-BHC-2024-1107 (December 3, 2024).
The Committee shall conduct a comprehensive annual review of the qualifications, performance, and independence of each sitting director. The annual review shall be designed to ensure that the Board's composition remains aligned with the Bank's strategic direction, risk profile, and regulatory requirements, and that individual directors continue to meet the standards expected for service on the board of a nationally chartered bank with total consolidated assets exceeding $10 billion.
The annual review shall incorporate the following elements:
(a) Updated Independence Assessments. The Committee shall conduct updated independence assessments for each director under the standards set forth in Section 2.2 of this Charter, including Nasdaq Listing Rule 5605(a)(2), the OCC's heightened standards, and the Bank's Director Independence Standards. Any changes in a director's independence status shall be promptly reported to the Board.
(b) Skill Matrix Assessment. The Committee shall review each director's continuing satisfaction of the competencies identified in the Skill Matrix, taking into account any changes in the director's professional experience, qualifications, or areas of expertise since the prior assessment.
(c) Attendance and Participation. The Committee shall assess each director's attendance record at Board and committee meetings, including participation in executive sessions, and shall evaluate each director's overall participation in committee work, including preparation for meetings, engagement in deliberations, and contributions to the Board's oversight functions.
(d) Board Composition Analysis. The Committee shall evaluate the overall composition of the Board for diversity (including gender, race and ethnicity, age, and geographic background), expertise gaps as identified through the Skill Matrix, tenure balance (including the mix of longer-tenured and newer directors), and alignment with the Bank's strategic direction and regulatory posture.
(e) Shareholder Feedback. The Committee shall consider feedback from shareholders regarding Board composition and governance practices, including engagement with the Bank's institutional shareholders. The Committee shall give particular consideration to the views of the Bank's significant shareholders, including Thornfield Capital Management, LP (holding approximately 7.3% of outstanding BRFG common stock), Graycliff Institutional Partners (holding approximately 5.1% of outstanding BRFG common stock), and Osprey Point Pension Fund (holding approximately 3.8% of outstanding BRFG common stock).
(f) Proxy Advisory Firm Feedback. The Committee shall consider the governance assessments and recommendations of proxy advisory firms, including Gramercy Proxy Services and Northgate Governance Advisors, and shall evaluate the extent to which such assessments and recommendations are relevant to the Bank's governance practices and Board composition.
The Committee shall present its findings and recommendations from the annual review to the full Board in advance of the deadline for finalizing the annual meeting proxy statement, so that the Board may consider such findings in connection with the nomination of directors for election at the annual meeting of shareholders.
Section 3.5 — Board and Committee Evaluation Oversight
The Committee shall oversee the annual self-evaluation process for the full Board and for each standing committee of the Board. The Committee shall be responsible for designing and implementing the evaluation process, including the following:
(a) Evaluation Criteria and Methodology. The Committee shall establish evaluation criteria and methodology appropriate to the Board's and each committee's responsibilities. Evaluation methodologies may include written questionnaires, individual director interviews conducted by the Committee Chair or an independent facilitator, peer assessments, and/or the engagement of an independent third-party facilitator to conduct the evaluation process.
(b) Review of Results. The Committee shall review the results of the annual evaluation process, identify themes and areas for improvement, and develop recommendations for enhancing the effectiveness of the Board and its committees.
(c) Reporting. The Committee shall report its findings and recommendations to the full Board, including in executive session as appropriate. The Committee shall also ensure that evaluation results are appropriately documented and maintained as part of the Bank's governance records.
(d) Coordination with Board Self-Evaluation Framework. The Committee shall coordinate the evaluation process with the Board Self-Evaluation Framework adopted by the Board, as developed by Calderwood & Harkness LLP in connection with the governance remediation process.
Section 3.6 — Director Orientation and Continuing Education
The Committee shall oversee the development and administration of an orientation program for newly elected or appointed directors. The orientation program shall include, at a minimum, sessions covering the Bank's business strategy, organizational structure, risk profile and risk appetite framework, regulatory environment, financial condition and performance, corporate governance practices, and fiduciary duties of directors of a national banking association.
The Committee shall also oversee continuing education programs for all directors, with particular attention to regulatory developments affecting the banking industry, emerging risks (including cybersecurity, climate-related financial risk, and digital assets), fiduciary duties and director liability, and governance best practices. The Committee shall encourage directors to participate in external education programs offered by recognized governance organizations, industry associations, and regulatory bodies.
The Committee, in coordination with the Corporate Secretary, shall maintain records of director education activities, including both internal orientation sessions and external continuing education programs attended by each director. Such records shall be made available to the OCC upon request as part of the Bank's governance remediation commitments.
Section 3.7 — Governance-Related Regulatory Compliance
The Committee shall monitor the Bank's compliance with governance-related regulatory requirements, including without limitation the following:
(a) OCC regulations and guidance applicable to the governance of national banking associations, including the OCC's heightened standards (12 C.F.R. Part 30, Appendix D) and related supervisory guidance;
(b) Federal Reserve supervisory expectations for boards of directors of bank holding companies, including guidance set forth in SR letters and supervisory communications;
(c) Nasdaq listing standards applicable to board composition, director independence, and committee structure;
(d) Applicable provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including enhanced prudential standards applicable to banking organizations with total consolidated assets exceeding $10 billion;
(e) Applicable provisions of the Sarbanes-Oxley Act of 2002, including requirements relating to audit committee independence, certification of financial statements, and internal controls; and
(f) SEC rules and regulations applicable to corporate governance, proxy solicitation, and disclosure.
The Committee shall coordinate with the Risk Committee (Chair: Priya Venkataraman), the Audit Committee (Chair: Thomas J. Callahan), and the Compensation & Human Capital Committee (Chair: Sandra M. Okafor) on governance matters that overlap committee responsibilities. Such coordination shall include regular communication among committee chairs, joint sessions where appropriate, and the sharing of information relevant to overlapping areas of responsibility.
The Committee shall receive regular reports from the General Counsel regarding governance-related examination findings, supervisory communications, and enforcement actions. The General Counsel shall promptly inform the Committee of any new or revised regulatory requirements that may affect the Bank's governance practices.
The Committee shall oversee the governance-related elements of the Bank's remediation plan submitted to the OCC in response to OCC MRA letter SA-2024-0315 (dated November 15, 2024) and the related observations in Federal Reserve supervisory letter SR-BHC-2024-1107 (dated December 3, 2024). The Committee shall monitor progress toward completion of the governance-related remediation items and shall report on such progress to the full Board and to the OCC as required by the remediation plan.
Section 3.8 — Shareholder Engagement on Governance Matters
The Committee shall oversee the Bank's engagement with shareholders on corporate governance matters. Such engagement shall include both off-season outreach to significant institutional shareholders and proxy-season engagement in connection with the annual meeting of shareholders.
The Committee shall coordinate with the Bank's proxy solicitor, Whitfield Greer & Associates (primary contact: Anne-Marie Delacroix, Senior Vice President), regarding shareholder engagement strategy, outreach plans, and messaging on governance topics. The Committee shall ensure that the Bank maintains an active and constructive dialogue with shareholders on governance matters, including Board composition, director qualifications, governance policies, and shareholder rights.
The Committee shall review and respond to governance-related shareholder proposals and correspondence. By way of example, the Committee shall consider the March 12, 2025 letter received from Thornfield Capital Management, LP, which addressed Board composition and governance practices, and shall determine the appropriate response to any issues raised therein.
The Committee shall monitor and assess the results of shareholder advisory votes on governance matters, including advisory votes on executive compensation (say-on-pay) and any governance-related shareholder proposals presented at the annual meeting. The Committee shall also monitor the governance ratings and recommendations of proxy advisory firms, including Gramercy Proxy Services and Northgate Governance Advisors, and shall evaluate the implications of such ratings and recommendations for the Bank's governance practices.
Section 3.9 — Related Party Transactions and Conflicts of Interest
The Committee shall review and approve or ratify related party transactions as required by the Bank's Related Party Transaction Policy (as in effect from time to time) and applicable Nasdaq listing standards. For purposes of this Section 3.9, "related party transactions" shall have the meaning set forth in Item 404 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, and as further defined in the Bank's Related Party Transaction Policy.
The Committee shall review director and executive officer conflicts of interest as they arise, including any potential conflicts identified in connection with new business relationships, investments, or other transactions involving the Bank or BRFG. The Committee shall ensure that conflicts of interest are appropriately managed and, where necessary, that conflicted directors or officers recuse themselves from deliberations and votes on matters in which they have a conflict.
The Committee shall ensure appropriate disclosure of related party transactions in the Bank's annual proxy statement and other SEC filings, coordinating with Meridian Cobalt LLP, the Bank's general outside corporate counsel, as applicable.
Section 3.10 — Other Responsibilities
In addition to the duties and responsibilities set forth above, the Committee shall:
(a) Review and recommend changes to the Bank's Board committee structure, including the creation, consolidation, or dissolution of standing or ad hoc committees, as appropriate in light of the Bank's governance needs, regulatory requirements, and industry best practices.
(b) Review the charters of all Board committees on at least an annual basis and recommend amendments to such charters as appropriate to reflect changes in applicable laws, regulations, listing standards, and governance practices.
(c) Perform any other activities consistent with this Charter, the Bank's bylaws, and governing law as the Board may from time to time delegate to the Committee.
ARTICLE IV — MEETINGS AND PROCEDURES
Section 4.1 — Frequency
The Committee shall meet at least four (4) times per year, at such times and places as the Committee Chair shall determine. The Committee shall schedule its regular meetings to align, to the extent practicable, with the Board's regular meeting schedule, so that the Committee may report promptly to the full Board on matters discussed and actions taken.
Additional meetings may be called at any time by the Committee Chair, the Board Chair, or any two (2) members of the Committee, upon reasonable notice to all Committee members. The Committee Chair shall use reasonable efforts to provide at least three (3) business days' advance notice of any special meeting, together with an agenda and any available meeting materials, provided that shorter notice may be given in exigent circumstances.
Section 4.2 — Quorum and Voting
A quorum for the transaction of business at any meeting of the Committee shall consist of a majority of the members of the Committee then in office. Actions of the Committee shall be taken by the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Each member of the Committee shall have one vote.
The Committee may also act by unanimous written consent in lieu of a meeting, in accordance with the Bank's bylaws and applicable law. Any action taken by unanimous written consent shall have the same force and effect as if taken at a duly convened meeting, and the written consent shall be filed with the minutes of the Committee's proceedings.
Section 4.3 — Attendance
Members of the Committee are expected to attend all regularly scheduled meetings of the Committee. Attendance at Committee meetings shall be considered as part of the annual director evaluation process described in Section 3.4 of this Charter. Members may participate in meetings by telephone or videoconference to the extent permitted by the Bank's bylaws and applicable law, provided that all participating members can hear and be heard by all other participants.
The Committee may invite members of management, including the Chief Executive Officer (Richard A. Montague), the General Counsel and Corporate Secretary (James W. Prescott), and other officers and employees of the Bank, to attend all or any portion of a Committee meeting, as the Committee deems appropriate. The Committee may also invite outside advisors, legal counsel, consultants, and other guests to attend meetings as needed.
The Committee shall meet in executive session, without management present, at each regularly scheduled meeting. The Committee Chair shall preside over executive sessions and shall determine the matters to be discussed during such sessions. Minutes of executive sessions shall be prepared and maintained as part of the Committee's records.
Section 4.4 — Agenda and Materials
The Committee Chair, in consultation with the General Counsel and Corporate Secretary, shall establish the agenda for each meeting of the Committee. Any member of the Committee may suggest items for inclusion on the agenda by communicating with the Committee Chair or the Corporate Secretary in advance of the meeting.
Meeting materials, including the agenda, background memoranda, reports, and any other materials relevant to the matters to be considered at the meeting, shall be distributed to Committee members at least five (5) business days before each regularly scheduled meeting. In the case of special meetings, meeting materials shall be distributed as far in advance of the meeting as practicable. Committee members are expected to review meeting materials in advance of each meeting.
Minutes of each meeting shall be prepared by the Corporate Secretary (or a designee of the Corporate Secretary) and shall be maintained as part of the Bank's official corporate records. Draft minutes shall be circulated to Committee members for review and shall be approved by the Committee at its next regularly scheduled meeting. Approved minutes shall be made available to the full Board upon request.
Section 4.5 — Reports to the Board
The Committee Chair shall report to the full Board at the next regularly scheduled Board meeting following each Committee meeting on the matters discussed and actions taken by the Committee. Such reports shall include a summary of the key topics considered, any recommendations made by the Committee, and any matters requiring Board action or attention.
The Committee shall provide the Board with an annual summary of its activities, including a review of the Committee's discharge of its duties and responsibilities under this Charter, the results of the Committee's self-evaluation, and any recommendations for changes to the Committee's charter, composition, or operations.
ARTICLE V — RESOURCES AND AUTHORITY
Section 5.1 — Authority to Retain Advisors
The Committee shall have the sole authority to retain and terminate legal counsel, executive search firms, consultants, and other advisors as it deems necessary or appropriate to fulfill its responsibilities under this Charter. The Committee shall not be required to obtain the approval of the Board or management before engaging any such advisors, provided that the Committee shall inform the Board of any material engagements.
The Bank shall provide appropriate funding, as determined by the Committee in its sole discretion, for the compensation of any advisors retained by the Committee and for ordinary administrative expenses of the Committee that are necessary or appropriate for the Committee to carry out its duties. The Committee shall exercise reasonable judgment in authorizing such expenditures and shall inform the Board of material expenses incurred.
As of the date of this Charter, the following advisors have been retained in connection with the Committee's governance remediation activities:
(a) Calderwood & Harkness LLP — engaged as outside governance advisory counsel in connection with the Bank's remediation of OCC MRA letter SA-2024-0315 and Federal Reserve supervisory letter SR-BHC-2024-1107;
(b) Meridian Cobalt LLP — serves as general outside corporate counsel for the Bank and BRFG; and
(c) Ashford Pike Advisory LLC — serves as regulatory consultant for MRA remediation, including governance-related remediation items.
Section 5.2 — Access to Information and Personnel
The Committee shall have full and unrestricted access to the Bank's books, records, facilities, and personnel as the Committee deems necessary or appropriate to fulfill its responsibilities under this Charter. No officer, employee, or agent of the Bank shall withhold or delay the production of any information requested by the Committee, and any such request shall be treated with the same priority as a request from the full Board.
The Committee may direct the General Counsel and Corporate Secretary to provide any information reasonably required for the Committee to fulfill its responsibilities, including reports on director qualifications, independence assessments, governance practices, regulatory examinations and communications, and any other matters within the scope of the Committee's charter.
The Committee may also direct management to cooperate fully with and provide information to any advisors retained by the Committee. Management shall provide requested information in a timely and complete manner and shall facilitate the advisors' access to the Bank's personnel and records as directed by the Committee.
Section 5.3 — Coordination with Holding Company
The Committee shall coordinate its activities, as appropriate, with the governance and nominating function at the holding-company level (BRFG), recognizing the substantial overlap in board composition between BRB and BRFG. As of the date of this Charter, eleven (11) of thirteen (13) Bank directors also serve on the board of directors of BRFG.
Such coordination shall include, without limitation:
(a) Alignment of director nomination and evaluation processes at the Bank and holding-company levels;
(b) Coordination of governance guidelines and policies to ensure consistency across the organization;
(c) Consideration of the parallel regulatory expectations of the OCC (as Bank supervisor) and the Federal Reserve (as holding-company supervisor) in the development and implementation of governance practices; and
(d) Joint discussions with the governance committee of the BRFG board, as appropriate, on matters of mutual concern.
ARTICLE VI — ANNUAL REVIEW OF CHARTER
The Committee shall review and assess the adequacy of this Charter at least annually to ensure that it remains consistent with the Committee's duties and responsibilities, the Bank's governance needs, and applicable legal and regulatory requirements. The Committee shall recommend any proposed amendments to this Charter to the Board for approval.
In conducting its annual review, the Committee shall consider changes in applicable laws and regulations, including OCC regulations and guidance, Federal Reserve supervisory expectations, Nasdaq listing standards, and SEC rules, as well as evolving governance best practices and shareholder expectations. The Committee shall also consider any findings or recommendations arising from regulatory examinations, supervisory communications, and the Bank's governance remediation activities.
A current copy of this Charter shall be made available on the Bank's website and shall be filed as required by applicable SEC regulations and Nasdaq listing standards. The Corporate Secretary shall be responsible for maintaining the official version of this Charter and for ensuring that the website version is updated promptly following any amendments.