Compensation, Nominating and Corporate Governance Committee Charter

Compensation, Nominating, and Corporate Governance Committee Charter

I. Purposes

The purposes of the Compensation, Nominating, and Corporate Governance Committee ("Committee") of the CPD Lachine Bank Financial Corporation ("Company") Board of Directors ("Board") are as follows:

a. Compensation Matters

i. Oversee the Company’s compensation and benefits strategies and policies generally;

ii. Oversee and set compensation for the Company’s senior executives;

iii. Evaluate senior executive performance, including annual evaluation of Chief Executive Officer performance;

iv. Oversee incentive compensation arrangements for senior executives and other employees or groups of employees who are in a position to subject the Company to material risk;

v. Oversee the Company’s management succession plan; and

vi. Prepare the report on executive compensation that is required to be included in the Company’s annual proxy statement.

b. Director Nomination and Corporate Governance Matters

 i. Identify individuals qualified to become Board members consistent with criteria approved by the Board.

 ii. Select, or recommend that the Board select, director nominees for the next annual meeting of stockholders or to fill vacancies.

 iii. Develop and recommend to the Board corporate governance guidelines and exercise oversight of the matters covered by the guidelines, including evaluation of the Board and management. 

II. Qualification and Election of Committee Members and Chair, Procedures for the Committee

Procedures of the Committee shall be as follows:

a. The Committee shall consist of three or more directors, each of whom has been affirmatively determined by the Board to be independent as defined by Securities and Exchange Commission (SEC) and New York Stock Exchange (NYSE) rules and under such corporate governance guidelines

as the Board approves from time to time.

b. Members are elected by the Board annually in connection with the annual meeting of the Board.

c. Committee members may be removed in those circumstances in which the bylaws provide for removal of a director.

d. A Committee member may resign at any time, in which case the Board may elect a new Committee member or may reduce the size of the Committee.

e. In addition to the members, meetings may be regularly attended by the Chief Executive Officer and other appropriate officers of the Company.

The non-management directors of the Committee must also meet without management at each regularly scheduled meeting.

f. The Committee shall meet as often as it determines is appropriate to carry out its responsibilities under its charter, but not less than four times per year. The Committee may meet by teleconference or in any other manner authorized in the bylaws for meetings of Board committees.

g. The Committee shall have a chair, elected by the Board annually when the Committee members are elected. The chair shall preside over all meetings, or the Committee may designate an acting chair in the chair's absence.

h. Committee meetings shall follow an agenda distributed before the meeting, provided that with the approval of the chair, additional agenda items may be added at the meetings.

i. At each Board meeting, the chair of the Committee shall report to the Board on all actions taken by the Committee since its last meeting.

j. All other rules concerning quorum, voting, and similar matters are governed by the bylaws.

III. Duties, Goals and Responsibilities Except as otherwise noted, full authority is delegated to the Committee without further authorization of the Board to:

a. Compensation Matters

i. Review and approve the Company’s compensation and benefits policies generally, including reviewing and approving any equity based compensation plans of the Company (subject, if applicable, to Board and stockholder approval) and making recommendations to the Board with respect to incentive compensation and equity based plans that are subject to Board approval.

ii Review, determine and approve the compensation of, and benefits for, the Chief Executive Officer and each of the Company’s other senior executive officers. In performing its review and approval, the Committee shall, among other things: (A) identify, review and approve corporate goals and objectives relevant to executive compensation; and (B) evaluate each executive’s performance in light of such goals and objectives and approve each executive’s compensation based on such evaluation and such other factors as the Committee deems appropriate and in the best interests of the Company. The Committee shall also review, determine and approve the compensation of and benefits for, other senior officers of the Company as the Committee determines, which shall include the heads of significant business lines. The Committee’s review and approval of compensation of, and benefits for, any executive other than the Chief Executive Officer shall be upon the recommendation of the Chief Executive Officer.

iii. Review and approve management’s assessment of whether incentive compensation plans for the Chief Executive Officer and other executive and senior officers of the Company: (A) appropriately balance risk and reward, (B) encourage imprudent risk-taking, (C) are likely to lead to material loss, (D) are appropriate in amount, and (E) are consistent with safety and soundness. The Committee shall also review and approve such an assessment by management for the overall compensation strategies and policies applicable to other individual employees or groups of employees on a common incentive plan who are in a position to expose the Company to material risk.

iv. Determine if any deferral or claw back provisions for the Chief Executive Officer or other senior executive officers have been triggered and executed as required.

v. Prepare the Compensation Committee Report required by SEC and NYSE rules to be included in the Company’s annual proxy statement or Form 10-K, and review and discuss the Company’s Compensation Disclosure and Analysis as required by SEC rules (“CD&A”) with management and provide a recommendation to the Board regarding the inclusion of the CD&A within the Company’s proxy statement or Form 10-K.

vi. In consultation with the Company’s Chief Executive Officer, periodically review the Company’s management succession planning including policies for CEO selection and succession in the event of the incapacitation, retirement or removal of the CEO, and evaluations of, and development plans for, any potential successors to the CEO.

vii. Review and approve any employment contracts and severance agreements (including change in control provisions) for the Company's executive officers, except that any employment contract or severance agreement for the Chief Executive Officer shall be subject to approval by the full Board.

viii. Annually, review and approve an annual summary of the Chief Executive Officer's perquisites and review a summary of other senior executive officer perquisites.

ix. Supervise the administration of the Company's cash balance pension plan and Employees Stock Purchase Plan. This includes:(A) approval of amendments as needed (except where the amendments require full Board approval); (B) selection of the trustee, funding agents, investment managers and other similar asset managers for the trust funds; (C) acting as the Advisory Committee for the Employees Stock Purchase Plan, directing the vote of shares for which participants in such plan do not provide direction; (D) exercise of all other administrative and interpretive authority under the plans; (E) exercise of all other responsibilities

as provided in the plans.

x. Supervise the administration of the Company's deferred compensation plans, Employees Stock Purchase Plan – Supplemental Plan (SERP), and Incentive Stock Program. This includes: (A) approval of amendments as needed; (B) issuance of awards (stock options and restricted stock grants); (C) exercise of all other administrative and interpretive authority under the plans and programs; (D) exercise of all other responsibilities as provided in such plans and programs. 

xi. Supervise the administration of the directors benefit plans. This includes: (A) approval of amendments as needed; (B) issuance of awards under such plans; (C) exercise of all other responsibilities as provided in such plans.

xii. Recommend to the full Board the election of officers.

xiii. Exercise all specific delegated authority set forth in this charter.

xiv. Delegate its authority to subcommittees or the chair of the Committee.

b. Nominating and Corporate Governance Matters The Committee shall seek out nominees for new directors as vacancies become available using the following criteria:

i. A majority of directors must be independent, as determined by the Board under the Company's Corporate Governance Guidelines.

ii. Nominees shall possess expertise in general business matters and in such other areas (such as financial expertise, for directors expected to serve on the Audit Committee and risk management

expertise for directors expected to serve on the Risk Committee) as are relevant to committees on which they are expected to serve.

iii. Nominees shall be individuals with the background, character, skills and expertise such that they will meaningfully contribute to the success of the Company and its operations.

IV. Evaluations

The Committee will be responsible for performing or overseeing evaluations as follows:

a. The Committee shall oversee the annual evaluation of the Board and its committees.

b. The Committee shall annually evaluate its own performance in light of its purposes, goals and duties. The evaluation shall be retained with the minutes of the Committee and submitted to the Board along with other Committee evaluations.

c. The Committee shall periodically review and assess the adequacy of its charter and recommend any proposed changes to the Board.

V. Retention of Advisers

The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser, and shall have the sole authority to terminate any such compensation consultant, independent legal counsel or advisors. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, independent legal counsel or other adviser retained by the Committee. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, independent legal counsel or any other adviser retained by the Committee. The Committee shall also have the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm's fees and other retention terms. The Committee may select a compensation consultant, legal counsel or other adviser to the Committee only after taking into consideration, all factors relevant to that person’s independence from management, including the following:

a. The provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser;

b. The amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser), as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser;

c. The policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;

d. Any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee;

e. Any stock of the Company owned by the compensation consultant, legal counsel or other adviser; and

f. Any business or personal relationship of the compensation consultant, legal counsel, other adviser (or their employer) with an executive officer of the Company.