Common use of Board Oversight Clause in Contracts

Board Oversight. (1) The Board shall ensure that the Bank has competent management in place on a full-time basis in all executive officer positions to carry out the Board’s policies; ensure compliance with this Agreement; ensure compliance with applicable laws, rules, and regulations; manage the day-to-day operations of the Bank in a safe and sound manner; and fully implement the findings and recommendations of the 2008 Management Study. (2) Within sixty (60) days, the Board shall prepare a written assessment of the capabilities of Bank’s executive officers to perform present and anticipated duties, taking into account the findings in the Report of Examination conducted as of September 30, 2008 (“▇▇▇”), and factoring in the officers’ past actual performance, experience, and qualifications, compared to their position descriptions, duties and responsibilities, with particular emphasis on their proposed responsibilities to execute the Strategic Plan and 2008 Management Study, and correct the concerns raised in the Report of Examination. Upon completion, a copy of the written assessment shall be submitted to the Assistant Deputy Comptroller. (3) If the Board determines that an officer’s performance, skills or abilities needs improvement, the Board will, within thirty (30) days following its determination, require the Bank to develop and implement a written program, with specific time frames, to improve the officer’s performance, skills and abilities. Upon completion, a copy of the written program shall be submitted to the Assistant Deputy Comptroller. (4) If an executive officer position is vacant now or in the future, including if the Board realigns an existing officer’s responsibilities and a executive officer position becomes vacant, the Board shall within sixty (60) days of such vacancy identify and provide notice to the Assistant Deputy Comptroller, pursuant to paragraph (5) of this Article, of a qualified and capable candidate for the vacant position who shall be vested with sufficient executive authority to ensure the Bank’s compliance with this Agreement and the safe and sound operation of functions within the scope of that position’s responsibility. (5) Prior to the appointment of any individual to an executive officer position, the Board shall submit to the Assistant Deputy Comptroller written notice, as required by 12 C.F.R. § 5.51 and in accordance with the Comptroller’s Licensing Manual. The Assistant Deputy Comptroller shall have the power to disapprove the appointment of the proposed executive officer. However, the lack of disapproval shall not constitute an approval or endorsement of the proposed officer. The requirement to submit information and prior disapproval provisions of this Article are based upon the authority of 12 U.S.C. § 1818(b) and do not require the Comptroller or the Assistant Deputy Comptroller to complete his review and act on any such information or authority within ninety (90) days. (6) The Board shall perform, at least annually, a written performance appraisal for each Bank executive officer that establishes objectives by which the officer’s effectiveness will be measured, evaluates performance according to the position’s description and responsibilities, and assesses accountability for action plans to remedy issues raised in Reports of Examination or audit reports. Upon completion, copies of the performance appraisals shall be submitted to the Assistant Deputy Comptroller. The Board shall ensure that the Bank addresses any identified deficiencies in a manner consistent with paragraphs (3) and (4) of this Article.

Board Oversight. (1) The Within ninety (90) days, the Board shall ensure provide each of the following: (a) a recommended organization chart that the Bank has competent management in place on a full-time basis in clearly reflects areas of responsibility and lines of authority for all executive current and proposed officer positions to carry out (including Credit Risk Officer) and which considers the Bank’s current and anticipated goals and objectives; (b) a review of the Board’s policies; ensure compliance with this Agreement; ensure compliance with applicable laws, rules, committee structure and regulations; manage the day-to-day operations an analysis of the Bank in responsibilities assigned to each committee; and, (c) a safe and sound manner; and fully implement performance appraisal program for evaluating the findings and recommendations performance of the 2008 Management StudyChief Executive Officer/President, Chief Financial Officer, Senior Loan Officer and Credit Risk Officer according to the position’s description and responsibilities and for measuring performance against the Bank’s goals and objectives. (2) Within sixty ninety (6090) days, the Board shall prepare a written assessment of assess the capabilities of the Bank’s executive officers Chief Executive Officer/President, Chief Financial Officer and Senior Loan Officer, based on the officers’ experience, other qualifications and performance compared to the newly revised position’s description, duties and responsibilities. Within ninety (90) days upon hiring a Credit Risk Officer, the Board shall likewise assess this officer’s performance compared to the position. (3) The Board will make a determination as to whether existing staff has the capabilities to perform present and anticipated duties, taking into account the findings contained in the Report of Examination conducted as of September 30, 2008 (“▇▇▇”), and factoring in the officers’ past actual performance, experience, and qualifications, compared to their position descriptions, duties and responsibilities, with particular emphasis on their proposed responsibilities to execute the Strategic Plan and 2008 Management Study, and correct the concerns raised in the most recent Report of Examination. Upon completionThe Board will determine whether management changes will be made, a copy of including the written assessment shall be submitted need for additions to the Assistant Deputy Comptrolleror deletions from current management. (34) If the Board determines that an officer will continue in his/her position but that the officer’s performance, depth of skills or abilities needs improvement, the Board will, within thirty (30) days following its of determination, require the Bank to develop and implement a written program, with specific time frames, to improve the officer’s performance, supervision and management of the Bank. At a minimum the written program shall include: (a) an education program designed to ensure that the officer has skills and abilities. abilities necessary to supervise effectively; (b) a program to improve the effectiveness of the officer; (c) objectives by which the officer’s effectiveness will be measured; and (d) a performance appraisal program for evaluating performance according to the position’s description and responsibilities and for measuring performance against the Bank’s goals and objectives. (5) Upon completionadoption, a copy of the written program programs required by this Article shall be submitted forwarded to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to all the programs developed pursuant to this Article. (46) If an executive officer a position mentioned in Paragraph (2) of this Article is vacant now or in the future, including if the Board realigns an existing officer’s responsibilities and a executive officer position mentioned in Paragraph (2) of this Article becomes vacant, the Board shall within sixty thirty (6030) days of such concluding its review and assessment, including any realignment, fill any existing vacancy identify and provide notice to or new position by the Assistant Deputy Comptroller, pursuant to paragraph (5) of this Article, appointment of a qualified and capable candidate for person to the vacant position who shall be vested with sufficient executive authority to ensure the Bank’s compliance with this Agreement and the safe and sound operation of functions within the scope of that position’s responsibility. (57) Prior to the appointment of any individual to an executive officer position, the Board shall submit to the Assistant Deputy Comptroller written notice, as required by 12 C.F.R. § 5.51 the following information: (a) the information sought in the “Changes in Directors and in accordance with Senior Executive Officers” and “Background Investigations” booklets of the Comptroller’s Licensing Manual. , together with a legible fingerprint card for the proposed individual; (b) a written statement of the Board's reasons for selecting the proposed officer; and (c) a written description of the proposed officer's duties and responsibilities. (8) The Assistant Deputy Comptroller shall have the power to disapprove the appointment of the proposed executive new officer. However, the lack of disapproval of such individual shall not constitute an approval or endorsement of the proposed officer. . (9) The requirement to submit information and the prior disapproval provisions of this Article are based upon on the authority of 12 U.S.C. § 1818(b1818(b)(6)(E) and do not require the Comptroller or the Assistant Deputy Comptroller to complete his his/her review and act on any such information or authority within ninety (90) days. (610) The Board shall perform, at least annually, a written performance appraisal for each Bank executive officer that establishes objectives by which the officer’s effectiveness will be measured, evaluates performance according continue to the position’s description and responsibilities, and assesses accountability for action plans to remedy issues raised in Reports of Examination or audit reports. Upon completion, copies of the performance appraisals shall be submitted to the Assistant Deputy Comptroller. The Board shall ensure that the Bank addresses any identified deficiencies has competent management in place on a full-time basis in its senior executive officer positions to carry out the Board’s policies, ensure compliance with this Agreement, applicable laws, rules and regulations, and manage the day-to-day operations of the Bank in a manner consistent with paragraphs (3) safe and (4) of this Articlesound manner.

Board Oversight. (1) The Board shall ensure that the Bank has competent management in place on a full-time basis in all executive officer positions to carry out the Board’s policies; ensure compliance with Within ninety (90) days of this Agreement; ensure compliance with applicable laws, rules, and regulations; manage the day-to-day operations of the Bank in a safe and sound manner; and fully implement the findings and recommendations of the 2008 Management Study. (2) Within sixty (60) days, the Board shall prepare a written assessment of take the capabilities of Bank’s executive officers necessary steps to perform present eliminate the deficiencies in management leadership and anticipated duties, taking into account the findings Board oversight as described in the Report of Examination conducted as of September 30December 31, 2008 2012 (the “▇▇▇”), to include specific actions for attaining the necessary management expertise and factoring in Board involvement to return the officers’ past actual performanceBank to a safe and sound condition. (2) Within thirty (30) days of this Agreement, experience, and qualifications, compared to their position descriptions, duties and responsibilities, with particular emphasis on their proposed responsibilities to execute the Strategic Plan and 2008 Management Study, and correct the concerns raised in the Report of Examination. Upon completion, a copy of the written assessment Board shall be submitted to the Assistant Deputy Comptrolleremploy an independent outside management consultant (“Consultant”). (3) If Prior to the Board determines that an officer’s performance, skills appointment or abilities needs improvementemployment of any consultant or entering into any contract with a consultant, the Board will, within thirty (30) days following its determination, require shall submit the Bank to develop name and implement a written program, with specific time frames, to improve the officer’s performance, skills and abilities. Upon completion, a copy qualifications of the written program shall be submitted proposed consultant and the proposed terms of employment to the Assistant Deputy ComptrollerComptroller for a prior written determination of no supervisory objection. (4) If an executive officer position is vacant now or in the future, including if the Board realigns an existing officer’s responsibilities and a executive officer position becomes vacant, the Board shall within Within sixty (60) days of such vacancy identify and provide notice the receipt of the written determination of no supervisory objection to the Assistant Deputy Comptrollerproposed consultant, pursuant the Consultant shall complete a study of current management and Board supervision presently being provided to paragraph the Bank, the Bank’s management structure, and its staffing requirements, including a staffing plan for the Bank’s loan function, in light of the Bank’s present condition. The findings and recommendations of the Consultant shall be set forth in a written report (5the “Management Study”) to the Board. At a minimum, the Management Study shall contain: (a) the identification of present and future management and staffing requirements of each area of the Bank, with particular emphasis given to Board oversight, senior management and lending officers; (b) a detailed written description of: (i) the Bank’s corporate governance and decision-making process; (ii) the Bank’s committees and the structure and purpose of each committee; (iii) organizational chart; and (iv) job descriptions for all executive officers; (c) an evaluation of each senior manager’s knowledge, skills, abilities and a determination of whether each of these individuals possesses the experience and other qualifications required to perform present and anticipated duties of the position; (d) identification of the skills and expertise needed to administer the Bank’s credit function in a safe and sound manner; (e) identification of the skills and expertise of the Bank’s current loan officers; (f) comparison of the loan officers’ skills and expertise identified in (6)(d) of this ArticleArticle to the skills and expertise identified in (6)(e) of this Article as necessary to develop, market, and administer the products that will be utilized in accomplishing the Bank’s goals and objectives; (g) an evaluation of the responsibility for present weaknesses in the Bank’s condition; (h) the effectiveness of the Bank’s committees, corporate governance and decision-making process; (i) recommendations as to whether management, staffing and structural changes should be made, including the need for additions to, or deletions from, the current Board and management team or structure and lending staff; (j) objectives by which management’s and the Board’s effectiveness will be measured; (k) a qualified training program to address identified weaknesses in the skills and capable candidate abilities of the Bank’s staff and management team; (l) an evaluation of current lines of authority, reporting responsibilities and delegation of duties for all officers, including identification of any overlapping duties or responsibilities; (m) a recommended organization chart that clearly reflects areas of responsibility and lines of authority for all officers; (n) an assessment of whether Board members are receiving adequate information on the vacant position who shall be vested operation of the Bank to enable them to fulfill their fiduciary duties and other responsibilities under law; (o) an assessment of the Board’s strengths and weaknesses along with sufficient executive authority a director education program designed to strengthen identified weaknesses; (p) recommendations to ensure the Board exercises proper oversight over the affairs of the Bank’s compliance with this Agreement and ; and (q) recommendations to correct or eliminate any other deficiencies in the safe and sound operation supervision or organizational structure of functions within the scope of that position’s responsibilityBank. (5) Prior to Within five (5) days of completion of the appointment of any individual to an executive officer positionManagement Study, the Board a copy shall submit be forwarded to the Assistant Deputy Comptroller for a prior written notice, as required by 12 C.F.R. § 5.51 and in accordance with the Comptroller’s Licensing Manual. The Assistant Deputy Comptroller shall have the power to disapprove the appointment determination of the proposed executive officer. However, the lack of disapproval shall not constitute an approval or endorsement of the proposed officer. The requirement to submit information and prior disapproval provisions of this Article are based upon the authority of 12 U.S.C. § 1818(b) and do not require the Comptroller or the Assistant Deputy Comptroller to complete his review and act on any such information or authority within ninety (90) daysno supervisory objection. (6) The Within forty-five (45) days of receipt of the OCC’s no objection to the Management Study, the Board shall perform, at least annually, prepare and submit a written performance appraisal for each Bank executive officer that establishes objectives by which management plan (“Management Plan”) to address the officer’s effectiveness will be measured, evaluates performance according to deficiencies noted in the position’s description and responsibilities, and assesses accountability for action plans to remedy issues raised in Reports of Examination or audit reports. Upon completion, copies of the performance appraisals shall be submitted Management Study to the Assistant Deputy ComptrollerComptroller for a prior written determination of no supervisory objection. The Management Plan shall include the recommendations made in the Management Study and shall also include the following specific measures to correct deficiencies in Board and management oversight and corporate governance, including but not limited to: (a) incentives designed to ensure that commission-based compensation arrangements promote quality and long-term performance, including: (i) recusals by any officer, employee, or director who may benefit directly or indirectly from the granting of the credit from any participation in the loan approval process; (ii) compliance with sound underwriting standards prior to the payment of commissions, bonuses and other compensation; (iii) commission, bonus and other compensation amounts that consider the quality and ongoing performance of loans generated, including financial statement exception levels as appropriate for the position; and (iv) hold-back provisions for incentive-based compensation arrangements that require substantial portions of the compensation be withheld and not paid in the event the loan is not sold, is returned by an investor, or becomes criticized within one year of its funding date; (b) policies and procedures to ensure that prior to the Bank’s involvement in any new products or services, the Board shall ensure that prepare a written analysis of the Bank addresses any identified deficiencies product or service in accordance with the New Products Policy and submit it to the Assistant Deputy Comptroller for a manner prior written determination of no supervisory objection. The analysis shall at a minimum, include the following: (i) the assessment of the risks and benefits of the product or services to the Bank; (ii) an explanation of how the product or service is consistent with paragraphs the Bank’s strategic plan; (3iii) an evaluation of the adequacy of the Bank’s staffing, expertise, MIS, internal controls, and written policies and procedures to identify, measure, monitor and control the risks associated with the product; and (4iv) a profitability analysis, including growth projections; (c) plans for the addition of this Articleoutside directors, as appropriate; (d) a succession plan for key management positions and the Board; and (e) the development of revised internal controls and assigned accountability to monitor and ensure policy adherence. (7) Subsequent to the receipt of the OCC’s non-objection to the Management Plan, the Board at its next regularly scheduled monthly meeting shall adopt, implement and thereafter ensure adherence to the Management Plan.