NewAlliance Bancshares, Inc.
Board of Directors
Governance Committee Charter
For the purposes of this Charter, the term "Bank" shall include New Haven Savings Bank and NewAlliance Bancshares, Inc., its parent holding company, as appropriate. The Governance Committee of the Board of Directors of the Bank shall operate within the terms of reference set out in this Charter.
The Governance Committee assists the Board in its oversight of corporate governance policies and practices, Board composition and director nomination and related matters. The Committee's mandate includes the following:
Specific responsibilities of the Governance Committee in fulfilling its mandate are outlined below.
The Governance Committee shall consist of a minimum of three directors, each of whom is "independent" in accordance with Nasdaq rules. Committee members and the Committee's chair shall be appointed by the full Board on an annual basis.
All members of the Governance Committee will be familiar with corporate governance issues and best practices. Each Committee member will diligently attempt to increase his or her knowledge of corporate governance issues and any relevant laws and regulations pertaining thereto on an ongoing basis.
The Chair of the Governance Committee shall be responsible for calling meetings of the committee, developing meeting agenda, providing pre-reading materials to committee members relative to agenda items and chairing the meetings.
The Governance Committee shall meet at the call of the Chair and such meetings may be in person or by conference call. The committee shall meet at least once a year. At least a majority of the members of the Governance Committee must be in attendance for a quorum. The Governance Committee may also act by unanimous written consent.
The Governance Committee shall report to the Board after each committee meeting and shall make every effort to facilitate regular communication between and among the committee, all other Board members and the CEO on issues relative to director recruitment and corporate governance.
The Governance Committee shall be responsible to identify, recruit, and recommend candidates for the Board of Directors of the Bank. The Governance Committee shall be responsible for evaluating any candidates for the Board of the Bank recommended by shareholders and shall use the nominating process outlined in the Bank's Corporate Governance Guidelines for this purpose. Governance Committee recommendations of Board candidates shall be submitted to a vote of the independent directors of the Board of the Bank. Candidates approved by a majority of the independent directors will be presented to shareholders for election at the Annual Meeting.
The Governance Committee may also make recommendations to fill any Board vacancies that arise between Annual Meetings. These will also be voted on by the independent directors of the Board. The continuing service of any Board members so appointed will be put to a vote of the Bank's shareholders at the next Annual Meeting.
The Governance Committee shall develop a formal nominating process to be used by the Bank for identifying, recruiting, evaluating and recommending director nominees. The nominating process will be outlined in the Bank's Corporate Governance Guidelines. The committee shall regularly review and refine its nominating process, as appropriate.
The Governance Committee shall develop criteria for directors to be used in the recruitment process and in reviewing any director candidates submitted by shareholders. The committee shall also develop policies with respect to Board member qualifications, including policies with respect to director independence, terms, and tenure. Director qualifications shall be set forth in the Bank's Corporate Governance Guidelines. The Governance Committee shall also develop a skills inventory of Board members, identifying specific skills and experience, which can be used both to identify any potential "gaps" to be filled through director recruitment and when considering Board committee assignments.
Board and Committee Independence
The Governance Committee shall review Board composition annually to ensure that the Board of Directors is comprised of a majority of independent directors, in accordance with the rules of the Nasdaq, and that the Audit, Compliance and CRA, Compensation, and Governance Committees are comprised entirely of independent directors as required under Nasdaq and SEC rules.
The Governance Committee shall be responsible to review and make recommendations to the Board for any changes to the Bank's committee structure or to the charters or to any Board committees. The Committee shall consult with the Chairs of the relevant Board committees prior to making such recommendations.
The Governance Committee shall annually review and make recommendations to the Board with respect to committee assignments for Board members, including the Chairs of the Board committees. In making these recommendations, the Governance Committee shall develop a system of rotation of committee Chairs and committee members that takes into account any legal or regulatory requirements for committee service, to ensure that such requirements are met and also to provide continuity. The Governance Committee shall also consult with the Chair/CEO and the Chairs of the Board Committees with respect to committee assignments.
Orientation and Director Education
The Governance Committee shall develop, implement, and regularly review and update an orientation program for new Board members. The Committee will also assume responsibility for continuing director education and shall ensure that applicable Nasdaq requirements for director continuing education are met.
The Governance Committee is responsible for developing and leading an annual Board assessment process for the Board of Directors of the Bank. The Governance Committee will review Board size, structure, meeting frequency, composition, operations, and performance as part of the annual Board assessment and shall make recommendations to the full Board on these matters.
The Governance Committee is also responsible to conduct an annual review of its own performance and to work with the chairs of the other Board committees to coordinate the annual review of the performance of each Board committee.
The Governance Committee shall develop a process for the review of incumbent Board members prior to their re-nomination. Directors may stand for re-election on the expiration of their terms if recommended by the Governance Committee and approved by a majority of the independent directors of the Board.
Governance Policies and Practices
The Governance Committee is responsible for oversight of the Bank's corporate governance policies and practices, including compliance with Nasdaq corporate governance rules. The Governance Committee shall keep abreast of best practices, regulatory changes, governance ratings, and other developments in the area of corporate governance and shall update the Board, as appropriate, on these issues.
The Governance Committee shall develop a set of Corporate Governance Guidelines for the Bank, including qualifications and responsibilities of directors. The Governance Committee shall review the Guidelines regularly and update them, as appropriate, with Board approval.
The Governance Committee shall also regularly review and update the Bank's Code of Conduct, policies contained therein, compliance mechanisms, and the disclosure of any waivers to executive officers and directors, which can only be granted by the independent directors.
The Governance Committee shall establish a process for receiving and reviewing communications from any shareholders wishing to communicate directly with the independent members of the Board. Upon such review, the committee will determine an appropriate response or course of action to address the shareholder communication which may include discussing the matter raised with the Board as a whole, with the independent directors in executive session, with the CEO and/or with other members of the senior management team, as appropriate.
The Governance Committee shall also establish procedures for the submission of shareholder recommendations for director nominations, and receive and review any such shareholder recommendations using the nominating process described in the Bank's Corporate Governance Guidelines. The Bank's Annual Proxy Circular will indicate the deadline by which such shareholder recommendations must be received by the Governance Committee for consideration.
If and when needed, the Governance Committee shall have the sole authority to retain and terminate any search firm to be used to identify or recruit candidates for the Board of Directors of the Bank. The Governance Committee shall have sole authority to approve the search firm's fees and other terms of the firm's retention.
The Governance Committee shall review this Charter annually and may recommend to the Board from time to time any proposed changes to this Charter and to documents related to the responsibilities of the Governance Committee, including the Code of Conduct and any Corporate Governance Guidelines developed for the Bank.