SECURITY FEDERAL CORPORATION

Nominating Committee Charter

 

I.  Purpose

The Nominating Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Security Federal Corporation (the “Company”):

  • to assist the Board, on an annual basis, by identifying individuals qualified to become Board members, and to nominate the director nominees for the elections to be held at the next annual meeting of shareholders;
  • to assist the Board in filling any vacancy that may arise on the Board by identifying individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancies; and
  • to lead the Board in its periodic evaluation of the performance of the Board.  

 

II.  Composition and Qualifications

The Committee shall be comprised of three (3) or more directors as determined by the Board, all of whom shall be independent non-executive directors, who are not employees of the Company, its subsidiaries or affiliates, and meet the “independent” definition of the NASD (Rule 4200).  Members of the Committee shall be appointed and removed only by the Board.  The Board shall appoint one member of the Committee as its Chair.  A majority of the members of the Committee present at any of its meetings shall constitute a quorum.  

III.  Meetings

The Committee shall meet at least once annually, and at such other times as it deems necessary to fulfill its responsibilities and duties set forth in this Charter. 

IV.  Responsibilities and Duties

The Committee shall have the primary responsibility to develop the criteria for the selection of new directors to the Board, including, but not limited to skills, experience, diversity, age, time availability, and such other criteria set forth in corporate policies or as the Committee shall determine to be relevant at the time.  The Committee shall have the authority to apply such criteria in connection with the identification of individuals to be Board members, as well as to apply all applicable federal laws and the underlying purpose and intent thereof in connection with such identification process.  

In addition, the Committee is responsible for establishing and administering the necessary processes associated with nominating potential directors, including, but not limited to, applications, screening, and interviewing prospective candidates; and finalizing its slate of candidates for recommendation to the Board.  These processes will apply to the filling of vacancies that may occur on the Board from time to time, and the election of directors at the annual meeting of shareholders.

The Committee is also responsible for the development and administration of the internal evaluation of the Board’s performance and any related individual Board member performance.  Such evaluations shall be used by the Committee in carrying out its nominating responsibilities.

Duties

  1. When Board vacancies occur, or otherwise at the direction of the Board, the Committee shall actively identify, recruit, interview, and evaluate individuals whom the Committee determines meet its criteria and standards for recommendation to the Board.
  2. The Committee shall be responsible for reviewing all candidates nominated by shareholders, and determining whether or not to include the candidate as a nominee in the Company’s proxy materials.
  3. The Committee shall nominate, on an annual basis, nominees for election as directors for the next annual meeting of shareholders and shall be responsible for administering the Company’s compliance with the election provisions of its Articles of Incorporation, Bylaws, and related policies.
  4. The Committee shall monitor the independence of the Board, to the extent that its nomination process ensures that the majority of the Board consists of independent directors as set forth in the Company’s policies.
  5. The Committee will establish, or identify and provide access to, appropriate orientation programs, sessions, or materials for newly elected directors of the Company for their benefit either prior to or within a reasonable period of time after their nomination or election as a director.
  6. The Committee will provide a report of the Company’s nomination process, activities, and resulting nominations in connection with the proxy materials associated with the Company’s annual meeting of shareholders.
  7. The Committee shall annually review its own performance, as well as the adequacy of this Charter and related corporate policies.  Any proposed changes shall be recommended to the Board for approval. 
  8. Minutes of each meeting will be provided to the Board of Directors on a timely basis.  In addition, the Committee will make from time-to-time, special presentations to the Board of Directors on topics related to Committee activities or responsibilities. 

V.  Authority

      The Committee has the authority to implement the provisions of this Charter.  Furthermore, the Committee shall have the authority to retain any outside advisors at the Company’s expense, as the Committee may deem appropriate in its sole discretion, to assist it in carrying out its responsibilities and duties. 

 

Date Approved: May 20, 2004

 

   

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