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Committees

Many of the Exchange’s key committees are appointed by the chairman and vice chairman and approved by the Exchange’s Board of Directors. Several of these committees are required, under the Exchange’s rules, to include a balance of public and participant representatives.

The Nominating & Governance Committee

Candidates for election as director shall be nominated by the Nominating and Governance Committee. The Nominating and Governance Committee shall consist of two (2) Public Directors and two (2) STP Participant Directors. The Board of Directors shall appoint the Nominating and Governance Committee. The Committee shall have the responsibility to (a) annually nominate directors for the class of directors standing for election at the annual meeting of stockholders that year; and (b) periodically review the organization and governance structure of the Exchange and its subsidiaries, and make such recommendations to the Board with respect thereto as it may deem appropriate.

The Exchange’s nominating committee is equally balanced between public and participant representatives. Four people serve on the committee – two public directors and two participant directors. Each of the participant directors must be an STP participant director and one of these participant directors must not be a representative of a firm that holds Series A Preferred Stock in CHX Holdings, the Exchange’s parent company. The committee is appointed each year by the Exchange’s Board of Directors.

The nominating committee nominates candidates to positions on the Board of Directors  in accordance with the Bylaws and addresses issues associated with the governance of the Exchange.

Executive Committee

The Exchange’s executive committee shall have not less than five members, all of whom shall be directors, plus the Chairman of the Board. A majority of the committee members (including the Chairman if the Chairman is a Public Director) shall be Public Directors. The Chairman of the Board shall be the Chairman of the Executive Committee.

The Executive Committee shall have such powers as may be delegated to it by the Board of Directors, and between meetings of the Board of Directors, it shall have, and may exercise, all the rights, powers, authority, duties and obligations of the Board of Directors not otherwise delegated to another committee or an officer or officers of the Exchange by the bylaws, rules or by the Board of Directors, except the authority to propose amendments to the certificate of incorporation, to adopt an agreement of merger or consolidation, to recommend to stockholders the sale, lease or exchange of all or substantially all of the property and assets of the Exchange or to recommend to the stockholders a dissolution of the Exchange or the revocation of a dissolution.

Regulatory Oversight Committee

The Exchange’s regulatory oversight consists of at least five Public Directors. Up to two Participant Directors may be appointed to serve as non-voting advisors to the Committee. The Chairman of the Board, if he is not also serving as the Chief Executive Officer, shall be one of the Public Directors on the committee. The committee and any advisors shall be appointed by the Vice Chairman and approved by the Public Directors on the Exchange's Board of Directors. The committee shall select its chairman from among the Public Directors on the committee.

The Regulatory Oversight Committee shall assist the Board in monitoring the design, implementation and effectiveness of the Exchange's programs to promote and enforce compliance with the federal securities laws, SEC rules and CHX rules. The committee shall have the powers and responsibilities set out in a written charter and approved by the Board from time to time.

Audit Committee

The audit committee consists of not less than three members, all of whom shall be Directors. The Chairman of the Board shall be one of the committee members when he is not also acting as the Chief Executive Officer. A majority of the committee members shall be Public Directors. The Chairman of the Committee shall be a Public Director.

The Committee shall assist the Board of Directors in monitoring the integrity of the Exchange's financial statements, the Exchange's systems of internal controls and the qualifications, independence and performance of the Exchange's internal auditor and independent public accountant. In addition, to the extent not performed by the Regulatory Oversight Committee, the Committee shall assist the Board in monitoring the Exchange's compliance with legal and regulatory requirements that may have a material impact on the financial statements. The Committee shall have the direct responsibility and authority to engage and oversee the work of the independent public accountant retained to audit the Exchange's financial statements and shall have all other responsibilities that are given to it by the Board of Directors from time to time. The Committee's powers and responsibilities shall be set out in a written charter and approved by the Board from time to time.

Compensation Committee

The compensation committee consists of the Chairman of the Board and not less than two other Directors. A majority of the committee members shall be Public Directors. The Compensation Committee shall have the responsibility of establishing, without the Chairman's participation or vote when the Chairman also is acting as Chief Executive Officer, the compensation of the Chief Executive Officer and of coordinating with the Chief Executive Officer to determine the compensation of other Exchange officers, as well as a comprehensive corporate compensation and benefits policy for Exchange staff. The comprehensive corporate policy shall include the structure and the administration of the determined compensation policy, the advisability and use of outside consultants, and a periodic review of the manner in which the determined policy is being administered.

Committee Quorum

For the Executive Committee, the Compensation Committee, the Regulatory Oversight Committee and the Audit Committee, a quorum for the transaction of business shall consist of one-half of the committee members, including not less than 50 percent of the Public Directors serving as members of such committees. If at least 50 percent of the Public Director committee members are (a) present at or (b) have filed a waiver of attendance for a meeting after receiving an agenda prior to such meeting, the requirement that not less than 50 percent of the Public Director committee members be present to constitute the quorum shall be deemed satisfied.