I. Purpose

The primary purpose of the Nominating and Corporate Governance Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Bank of Granite Corporation (the “Corporation”) in: (i) identifying qualified individuals to become Board members, (ii) determining the composition of the Board and its committees, (iii) monitoring a process to assess the effectiveness of the Board and Board committees and (iv) developing and implementing the Corporation’s corporate governance guidelines.

II. Composition

The Committee shall be comprised of three or more directors appointed by the Board, each of whom should under normal circumstances be independent within the meaning of applicable SEC regulations, Nasdaq rules and such other criteria as the Board may establish. The Board shall appoint a Chair of the Committee.

III. Meetings

The Committee shall meet at least twice annually, or more frequently as necessary. The Committee may, in its discretion, ask members of management or others to attend any of its meetings or to provide information or advice as needed.

IV. Activities

To fulfill its purpose and responsibilities, the Committee shall:

Board Membership



Make recommendations to the Board regarding the size and composition of the Board and the criteria for the selection of candidates for membership on the Board.




Oversee the search for individuals qualified to become members of the Board, including by evaluating persons suggested by shareholders or others, and supervise appropriate inquiries into the backgrounds and qualifications of possible candidates.






Recommend to the Board director nominees to be presented for shareholder approval at each annual meeting of shareholders and to fill any vacancies between annual meetings.



Board Committees



Monitor and make recommendations to the Board with respect to the functions of the Board and the various committees of the Board.

Management Succession



Review management succession plans with the Chief Executive Officer.

Corporate Governance



Develop and recommend to the Board for its approval an annual self-evaluation process for the Board and each of its committees.




Develop and recommend to the Board for its approval the by-laws and a set of corporate governance guidelines, review those by-laws and guidelines at least annually and recommend changes to the Board as appropriate.






Develop and recommend to the Board for its approval a set of minimum standards and qualifications for director nominees.







Periodically review the frequency, structure and content of Board meetings and recommend changes to the Board as appropriate.




Periodically review director fees and other compensation and advise the Compensation Committee on these matters.






Consider any other matters of corporate governance raised by the Committee, the Board or management.




After each Committee meeting, the Committee shall report its actions and recommendations to the Board.

The Committee shall conduct and present to the Board an annual review of its performance. In addition, the Committee shall review this Charter at least annually and recommend any proposed revisions to the Board for its approval.

The Committee shall have the authority to delegate any of its responsibilities to subcommittees. The Committee shall also have the authority to engage a search firm to assist in identifying director candidates and to engage outside counsel and other advisors, in each case as it deems appropriate in its sole discretion, and to set the terms (including fees) of all such engagements. The Corporation shall provide for appropriate funding, as determined by the Committee, for paying fees to outside advisors engaged by the Committee.

Approved by the Board of Directors: March 8, 2004