EXHIBIT 14
EXCHANGE NATIONAL BANCSHARES, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
Exchange National Bancshares, Inc.
Code of Business Conduct and Ethics
I. GENERAL
To foster a culture of honesty and accountability, we have adopted this
Code of Business Conduct and Ethics (this "Code"). This Code sets forth specific
corporate policies governing the conduct of the business of Exchange National
Bancshares, Inc. and its subsidiaries (collectively, the "Company" or "we" "our"
or "us"). These policies were developed and are intended to be applied in good
faith with reasonable business judgment to enable us to achieve our operating
and financial goals within the framework of the law.
We are committed to conducting our business with honesty and integrity and
to maintaining the high standards of conduct reflected in our Code. We are
committed to creating a free and open environment in which compliance with this
Code is considered the responsibility of each director, officer, employee and
agent of the Company (all "Employees" or "you" or "your"). We require our
Employees to act in a manner which promotes:
1. Honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and professional
relationships;
2. Avoidance of conflicts of interest, including disclosure to an
appropriate person or persons identified in this Code of any material
transaction or relationship that reasonably could be expected to give rise
to such a conflict;
3. Full, fair, accurate, timely, and understandable disclosure in
reports and documents that our Company files with, or submits to, the
Securities and Exchange Commission ("SEC") and in other public
communications made by the Company;
4. Compliance with applicable governmental laws, rules and
regulation;
5. The prompt internal reporting to an appropriate person or persons
identified in this Code of violations of this Code; and
6. Accountability for adherence to this Code.
The Company recognizes that rapid changes in business constantly pose new
ethical and legal considerations. No set of guidelines, therefore, should be
considered the absolute last word under all circumstances. We encourage our
Employees to consult with any supervisor, manager or officer of the Company, or
the Audit Committee of the Board of Directors of the Company (the "Audit
Committee") if there is any doubt as to the proper course of action (see
"Reporting Procedures" below). Willingness to raise ethical concerns is
essential. We are confident each of our Employees shares our sense of
determination in this area.
Our policy requires our Employees to observe high standards of business
and personal ethics in the conduct of their duties and responsibilities. Each
Employee must obey the law, practice honesty and integrity and act ethically in
every aspect of dealing with other Employees, the public, the business
community, shareholders, customers, suppliers and government authorities. Our
Chief Executive Officer ("CEO") and Senior Officers (as defined herein) are
responsible for setting standards of business ethics and overseeing compliance
with these standards. Our Employees frequently encounter a variety of ethical
and legal questions.
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The way we decide these issues should be consistent with our basic values and
principles. This Code provides general guidance for resolving a variety of legal
and ethical questions for our Employees.
The topics discussed in this Code may not cover every situation and are in
addition to our other policies and programs.
B. ANTI-RETALIATION. No one will suffer any adverse effects to his or her
job or career as a result of raising, in good faith, an ethical concern or
questioning, in good faith, a Company practice. It is a violation of this Code
to discriminate or retaliate against any Employee for reporting a suspected
violation. Supervisory personnel have a special responsibility to demonstrate
high ethical standards in their behavior and to handle reports of suspected
violations properly. Each supervisor is expected to take all necessary actions
to ensure compliance with and to bring problems to the attention of higher
management or officers of the Company and any member of the Audit Committee.
C. FAILURE TO COMPLY. Failure to comply with this Code can have severe
consequences for both an Employee and the Company. Conduct that violates this
Code may also violate national or state laws and can subject both an Employee
and the Company to civil and criminal penalties. No Employee should be misguided
by any sense of loyalty to the Company or a desire for profitability that might
cause him or her to disobey any applicable Law or our policies. Violation of our
policies will constitute grounds for disciplinary action, including, when
appropriate, termination of employment.
D. DEFINITIONS. As used in this Code, the following terms have the
meanings set forth below:
1. "Disclosure Controls and Procedures" means the Company's controls and
other procedures that are designed to ensure that information required to be
disclosed by the Company in the Reports that it files and submits under the
Securities Exchange Act of 1934 ("Exchange Act") is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms.(1)b
2. "Fraud" includes, but is not limited to, embezzlement, criminal fraud,
taking of property through deceit or artifice, misappropriation and other
irregularities including such things as any:
- dishonest or fraudulent act;
- defalcation;
- embezzlement;
- forgery or alteration of negotiable instruments such as Company
checks and drafts;
- misappropriation of Company, Employee, customer, partner or supplier
assets;
- conversion to personal use of cash, securities, supplies or any
other Company asset;
- unauthorized handling or reporting of Company transactions; and
- falsification of Company records or financial statements for
personal or other reasons.
- ----------
(1) Rule 13a-15(e).
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The above list is not all-inclusive but intended to be representative of
situations involving Fraud. Fraud may be perpetrated not only by Company
employees, but by agents and other outside parties as well. All such situations
require specific action by the Company.
3. "Internal Control over Financial Reporting" is defined as a process
designed by, or under the supervision of, the Company's principal executive and
principal financial officers, or persons performing similar functions, and
effected by the Company's board of directors, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.
4. "Laws" means laws, rules, regulations, orders, directives and judgments
of governmental agencies, authorities, courts and administrative bodies.
5. "Material Nonpublic Information" shall have the same meaning as the
phrase is used in connection with the Exchange Act and any case law interpreting
that Statute, including any information which could reasonably be expected to
affect the price of the Company's stock should it become public knowledge.
6. "Quarterly Blackout Period" is a period during which the Company allows
no trading in its stock from the first day of the last month of each fiscal
quarter and ending after the market closes the second trading day after the
release of the results of operations for that quarter (and in the case of the
last fiscal quarter, its results of operations for the fiscal year then ended)
to the public
7. "Senior Officers" means all executive officers, the principal financial
officer, the controller or the principal accounting officer or any person
performing similar functions.
8. "Sensitive information" includes confidential and proprietary
information, customer lists, materials developed for in-house use,
administrative processes, business plans, pricing strategies and any formulas,
devices and compilations of information which give the Company a competitive
advantage.
II. STANDARDS OF CONDUCT
9. Employees shall exercise honesty, objectivity, and diligence and act
ethically in the performance of their duties and responsibilities. Employees
shall be ever mindful of their obligation to maintain the high standards of
competence, morality and dignity.
10. Employees shall exhibit loyalty in all matters pertaining to the
affairs of the Company. However, Employees shall not knowingly be a party to any
Fraud or other illegal or improper activity. All Employees are expected to
adhere to high standards of personal integrity. For example, perjury or any
other illegal act taken to "protect" the Company and sales made by deception or
production quotas achieved through questionable means or figures are wrong and
will not be tolerated by the Company.
11. Employees shall not knowingly engage in acts or activities, which are
discreditable to the Company.
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12. Employees shall refrain from entering into any activity which may be
in conflict with the interest of the Company or which would prejudice their
ability to carry out objectively their duties and responsibilities.
13. Employees shall not accept anything of value from an Employee,
customer or supplier of the Company which would impair or be presumed to impair
their professional judgment. Employees shall not accept costly entertainment or
gifts (excepting mementos and novelties of nominal value) from others with whom
the Company does business.
14. Employees shall be prudent in the use of information acquired in the
course of their duties. They shall not use sensitive information for any
personal gain, unless approved in advance by the Audit Committee, nor in any
manner which would be contrary to law or detrimental to the welfare of the
Company.
15. Employees, when reporting on the results of their work, shall reveal
all material facts known to them which, if not revealed, could either distort
reports of operations or conceal unlawful practices.
16. Employees shall continually strive for improvement in the proficiency,
and in the effectiveness and quality of their service to the Company.
17. Employees shall not become involved in circumstances that produce, or
reasonably appear to produce, conflict between personal interests of an employee
and interests of the Company, including, without limitation, investments in
suppliers, customers or competing companies (except insubstantial securities
investments in publicly traded companies), outside employment which would affect
working efficiency, and direct or indirect ownership of property or other
tangible items which may be sold or leased to the Company.
18. The integrity of the Company's accounting and financial records is
based on the validity, accuracy and completeness of basic information supporting
entries to the Company's books of account. All Employees involved in creating,
processing or recording such information are held responsible for its integrity
and are responsible for full, fair, accurate, timely, and understandable
disclosure in the periodic reports required to be filed by the Company.
19. Every accounting or financial entry should reflect exactly that which
is described by the supporting information. There must be no concealment of
information from (or by) management, or from the Company's independent auditors.
20. Employees who become aware of possible omission, falsification or
inaccuracy of accounting or financial entries or basic data supporting such
entries, are held responsible for reporting such information.
21. All Employees are encouraged to take part in public matters of their
individual choice. The Company may, to the extent legally permissible, support
committees aimed at encouraging political contributions by individuals.
22. In dealing with public officials and private business associates, the
Company will utilize only ethical commercial practices. The Company and its
Employees will not seek to influence sales of its products or services (or other
events impacting on the Company) by payments of bribes, kickbacks or other
questionable inducements. Payments or commitments (whether cast in the form of
commissions, payment or fees for goods
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or services received, or otherwise) made with the understanding or under
circumstances that would indicate that all or part thereof is to be paid
(directly or indirectly) to a public official or employee to induce said
individual to fail to perform their duties, to perform them in an incorrect
manner, or to cause any privilege or favor toward the Company or its products
are strictly prohibited.
23. While the Company may hire individuals who have knowledge and
experience in various technical areas, it is not the Company's intent to employ
such persons as a means of gaining access to the trade secrets of others. New
Employees will not be asked to divulge such trade secrets. Similarly, we require
that Employees not make unauthorized disclosure of our trade secrets, either
during their employment or thereafter.
III. COMPLIANCE WITH LAWS
Our policy is to comply fully with all Laws applicable to our business.
You must become familiar with and comply with the Laws which govern your area of
responsibility. You are not authorized by the Company to take any action which
you are advised would constitute a violation of Law.
Each Employee and agent is personally responsible for adhering to the
standards and restrictions, whether imposed by Law or this Code, applicable to
his or her assigned duties and responsibilities and to conduct himself or
herself accordingly. Such standards and restrictions require each employee and
agent to avoid any activities which would involve the Company in any practice
which is not in compliance with this Code. Any Employee or agent who does not
adhere to such standards and restrictions is acting outside the scope of his or
her employment or agency.
Beyond legal compliance, all Employees are expected to observe high
standards of business and personal ethics in the discharge of their assigned
duties and responsibilities. This requires the practice of honesty and integrity
in every aspect of dealing with other Employees, the public, the business
community, shareholders, customers, suppliers and governmental and regulatory
authorities.
COMPANY POLICY PROHIBITS EMPLOYEES FROM DISCRIMINATING AGAINST EMPLOYEES,
SHAREHOLDERS, DIRECTORS, OFFICERS, CUSTOMERS OR SUPPLIERS ON ACCOUNT OF RACE,
COLOR, AGE, SEX, RELIGION OR NATIONAL ORIGIN EXCEPT AS MAY BE REQUIRED BY
APPLICABLE LAW. ALL OF SUCH PERSONS SHALL BE TREATED WITH DIGNITY AND RESPECT
AND THEY SHALL NOT BE UNREASONABLY INTERFERED WITH IN THE CONDUCT OF THEIR
DUTIES AND RESPONSIBILITIES.
The Company will endeavor to provide a work environment free of all forms
of harassment or discrimination, and it is your obligation to assist the Company
in that endeavor.
The Company and Employees will comply with all health and safety Laws
covering Company facilities and otherwise strive to maintain a safe and happy
working environment.
IV. DEFALCATION, MISAPPROPRIATION AND SIMILAR IRREGULARITIES (FRAUD)
This policy establishes and communicates the Company's policy regarding
the prohibition, recognition, reporting and investigation of suspected Fraud and
other similar irregularities.
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The Company prohibits all Fraud. In accordance with the "Audit Committee -
Financial Matters Complaint Policy", situations involving suspected Fraud shall
be reported to any supervisor, manager, or officer of the Company, the Chief
Financial Officer or the Audit Committee. All Fraud investigations under the
Financial Matters Complaint Policy will be conducted under the authorization and
direction of the Audit Committee.
The Chief Financial Officer will maintain close liaison with the Audit
Committee and will assist in investigations as deemed appropriate under the
circumstances.
V. CONFLICT OF INTEREST
Employees must deal with suppliers, customers, auditors and others doing
business with the Company in a manner that avoids even the appearance of
conflict between personal interests and those of the Company. This requirement
applies equally to business relationships as well as personal activities.
Employees have a duty of loyalty to the Company to advance its legitimate
interests when the opportunity to do so arises.
Although not all situations in which a conflict may arise can be defined
precisely, you should avoid situations which interfere with your ability to act
in an honest and ethical manner. You must avoid situations where your private
interests, or the private interests of members of your family conflict with the
interests of the Company. You should not have any business or financial
relationship with customers, suppliers or competitors that could influence or
appear to influence you in carrying our your responsibilities. You should not
acquire any interests or participate in any activities that would deprive the
Company of the time or attention required to perform your duties properly, or
create an obligation of distraction that would affect your judgment or ability
to act solely in the Company's best interest. Any Employee who becomes aware of
a potential conflict of interest should communicate this to the Audit Committee
in accordance with the Reporting Procedures set forth in Section XVIII (G)
below. Employees are required to ethically handle actual or apparent conflicts
of interest between personal and professional relationships.
Examples of the types of situations, which must be approved by the
Company, are set forth below:
- Obtaining a significant financial or other beneficial interest in
one of the Company's outside accounting firms, suppliers, customers
or competitors. None of our executive officers or directors may have
been previously employed by our current independent auditor within
the most recent five years.
- Engaging in a significant personal business transaction involving
the Company for profit or gain.
- If an executive officer or director, obtaining a loan or guarantee
from the Company for personal benefit.
- Accepting money, gifts of other than nominal value, excessive
hospitality, loans or other improper personal benefits from any
supplier, customer or competitor of the Company as a result of his
or her position in the Company.
- Participating in the use, sale, loan or gift of Company property,
information or position for personal gain.
- Learning of a business opportunity through association with the
Company and disclosing it to a third party or investing in the
opportunity without first offering it to the Company.
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- Competing with the Company.
- Using the Company property or services for personal benefit.
- Working for a competitor, customer or supplier as an employee,
consultant or member of its board of directors.
VI. ENTERTAINMENT, GIFTS AND PAYMENTS
The Company considers that in the interests of avoiding even the
appearance of impropriety, Employees may not furnish on behalf of the Company
expensive gifts or provide excessive entertainment or benefits to other persons.
In addition, Employees may not use their employment status to obtain gain from
the Company's auditors, suppliers or customers doing or seeking to do business
with the Company.
Family members of Employees may not accept any gift or gratuity in any
form from any auditor, supplier or customer of the Company unless the gift is a
commonly distributed item of nominal value given for advertising or promotional
purposes or is of modest value and consistent with local business custom.
Employees may not solicit or accept gifts, gratuities, tickets or entertainment
having a value of $500 or more from auditors, suppliers or customers.
VII. INSIDER TRADING
This Code prohibits Employees from buying, selling, assigning,
transferring or otherwise trading in the securities of the Company while in the
possession of Material Nonpublic Information. This Code also prohibits Employees
from engaging in any action to take advantage of, or pass on to others, Material
Nonpublic Information. This policy is intended to enforce the securities laws of
the United States which prohibit Employees from buying or selling securities of
the Company while in possession of Material Nonpublic Information relating to
the Company or from using Material Nonpublic Information.
Our prohibition applies to Material Nonpublic Information obtained in the
course of an Employee's employment relating to any auditors, customers,
suppliers and companies with whom the Company is considering a transaction. We
will hold the Employee responsible for the compliance of his or her family
members and for the actions of any other party who has received the Material
Nonpublic Information from the Employee as a "tip". Employees may not buy or
sell securities of the Company while in possession of Material Nonpublic
Information relating to the Company.
If you are an Executive Officer or Director of the Company, you are
subject to certain restrictions on trading, including a prohibition from trading
in Company stock during a Quarterly Blackout Period. Such restrictions may
include requiring pre-clearance of trades in Company securities and the
prohibition from engaging in any of the following activities with respect to
securities of the Company: (i) trading on a short-term basis (i.e., purchase and
sale within a six month period); (ii) short sales; or (iii) buying or selling
puts or calls. See the Company's "Section 16 Reporting Policy" and the Company's
"Policy Applicable to Covered Persons Regarding Securities Trading and Handling
of Nonpublic Information."
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VIII. CONCERNS REGARDING DISCLOSURE
The Company is dedicated to fully complying with the applicable securities
laws, including reporting requirements, and to ensuring that information
contained in its public communications and its publicly filed financial
statements and periodic reports fairly present, in all material respects, the
matters disclosed and, as applicable, the financial condition, results of
operations and cash flows of the Company.
The Company's books and records will reflect, in an accurate, fair and
timely manner, the transactions and disposition of assets of the Company. All
funds and assets will be properly recorded and disclosed. Employees may not use
the books and records to mislead those who receive them, or to conceal anything
that is improper (e.g., secret funds). Those responsible for the accounting and
record-keeping functions must be vigilant in ensuring that the Company's funds
or assets are not used for any unlawful or improper purpose. Employees are
required to promote full, fair, accurate, timely, and understandable disclosure
in the periodic reports required to be filed by us and in all public
communications.
Accordingly, the Company is committed to providing an environment which is
receptive to receiving and effectively dealing with complaints regarding its
accounting, internal accounting controls, or auditing matters and maintaining
the confidentiality and anonymity of employees who submit concerns regarding
questionable accounting or auditing matters.
Under the "Audit Committee - Financial Matters Complaint Policy" the board
of directors of the Company and the Audit Committee maintain an "open door"
policy to receive, retain and handle complaints and notification regarding the
Company's accounting, internal accounting controls, auditing matters and other
reportable offenses as described in this policy. We encourage the prompt
reporting of such complaints or concerns so that rapid and constructive action
can be taken.
IX. IMPROPER INFLUENCE OVER AUDITORS
The Company recognizes the importance of preventing improper influence on
the conduct of auditors. Accordingly, the Company prohibits any Employee from
conducting any action to fraudulently influence, coerce, manipulate, or mislead
any of our auditors during their review or examination of our financial
statements for the purpose of rendering the financial statements materially
misleading. Such conduct is prohibited even if it does not succeed in affecting
our audit or review. Improper influence would include, but is not limited to,
directly or indirectly:
1. Offering or paying bribes or other financial incentives, including
offering future employment or contracts for non-audit services.
2. Providing an auditor with inaccurate or misleading accounting,
financial or legal analysis, records or information.
3. Threatening to cancel or canceling existing non-audit or audit
engagements if the auditor object to the proposed accounting.
4. Seeking to have a partner removed from the audit engagement because the
partner objects to the proposed accounting.
5. Blackmailing; and
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6. Making physical threats.
X. INTERNAL CONTROLS OVER FINANCIAL REPORTING AND DISCLOSURE
CONTROLS AND PROCEDURES
The Company shall maintain disclosure controls and procedures to ensure
that the information required to be disclosed by the issuer in its periodic
reports, current reports and proxy statements ("Exchange Act Reports") filed by
the Company under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"):
- Recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms; and
- Accumulated and communicated to the management, including the CEO
and Chief Financial Officer ("CFO") to allow timely decisions
regarding required disclosure.
The Company shall maintain a system of internal controls over financial
reporting to ensure reliability and adequacy of its books and records and proper
recording of all transactions including dispositions of assets. The Company has
established guidelines and procedures related to the keeping of books and
records that in reasonable detail accurately and fairly reflect the Company's
transactions and dispositions of assets. The Company guidelines and procedures
are intended to prevent the records from being misleading or concealing anything
that is improper.
Employees must strictly comply with disclosure controls and procedures and
internal controls over financial reporting and must be vigilant in ensuring that
the Company's funds or assets are not used for any unlawful or improper purpose.
Employees may only enter into transactions which are executed in accordance with
the Company's specific authorization or established formalized policies and
procedures. Employees must not allow any transaction to be recorded in the
accounts of the Company unless it is within the scope of written policies and
procedures or is specifically and formally approved by an appropriate and
designated employee. Such approval requires the determination that the
transaction:
- has been authorized in accordance with Company policy, and
- is supported by documentary evidence to verify the validity of the
transaction.
All transactions that have been accounted for in accordance with Company
policy will be accumulated and processed in a manner which will permit
preparation of financial statements, reports and data for purposes of internal,
public and regulatory reporting. Such statements, reports and data must be in a
form sufficient to reflect accurately and fairly the results of transactions
entered into by the Company and to permit proper accountability for assets.
The implementation and maintenance of disclosure controls and procedures
and internal controls over financial reporting that are adequate in all respects
to satisfy the requirements of the Company will be the primary responsibility of
the Chief Financial Officer. All failures regarding these of which an Employee
becomes aware should be reported to Chief Financial Officer, so that
deficiencies can be corrected and assurance of compliance can be maintained.
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XI. CONFIDENTIAL, PROPRIETARY INFORMATION
Employees have access to and become knowledgeable about sensitive
information regarding the Company and our customers that is confidential,
private or proprietary and which is valuable to us. Disclosure of confidential
and proprietary information outside the Company either during and after an
Employee's employment with the Company could be irreparably harmful to the
Company or a customer or be helpful to a competitor. The Company regularly
receives sensitive information from those with whom it does business.
Confidential and proprietary information of a customer is often received under
the terms of a written agreement that specifies the Company's obligations for
the use and protection of the customer's information ("Customer Confidentiality
Agreements").
Employees entrusted with or otherwise knowledgeable about information of a
confidential or proprietary nature, shall not disclose such information to
non-employees without written Company authorization. Employees shall disclose
sensitive information to other Employees of the Company only on a need to know
basis.
Employees must use or disclose the customer's sensitive information only
for Company purposes and not for personal benefit or a competing interest.
Access to sensitive information will be limited to those having a need to know.
Employees have a continuing duty to the Company to maintain the confidentiality
of sensitive information both during and after employment. Employees must
protect the confidentiality of any such information, whether or not such a
Customer Confidentiality agreement exists, and limit use of it to what is
authorized. Employees must protect the confidentiality of such customer
sensitive information, whether or not such customer confidentiality agreement
exists, and limit the use of such information to the extent authorized by the
customer.
XII. FAIR DEALING
The Company is committed to promoting the values of honesty, integrity and
fairness in the conduct of its business and sustaining a work environment that
fosters mutual respect, openness and individual integrity. Employees are
expected to deal honestly and fairly with the Company's customers, suppliers,
competitors and other third parties. To this end, Employees shall not:
- make false or misleading statements to customers, suppliers or other
third parties;
- make false or misleading statements about competitors;
- solicit or accept any fee, commission or other compensation for
referring customers to third-party vendors; or
- otherwise take unfair advantage of the Company's customers or
suppliers, or other third parties, through manipulation,
concealment, abuse of privileged information or any other
unfair-dealing practice.
XIII. IMPROPER INFLUENCE OR PAYMENTS; POLITICAL CONTRIBUTIONS
In dealing with public officials and private business associates, the
Company will utilize only ethical commercial practices. Improper influence over
auditors, suppliers or customers through accepting or giving bribes, kickbacks
or other payoffs and other questionable inducements is illegal, unethical and
dishonest.
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Accordingly, the Company prohibits Employees from using such schemes to
influence sales of its products or services (or other events impacting on the
Company).
Employees must not take any action to fraudulently influence, coerce,
manipulate, or mislead any independent public or certified accountant engaged to
perform an audit of the financial statements of the Company for the purpose of
rendering such financial statements materially misleading. The Company strictly
prohibits Employees from accepting or taking any kickbacks, bribes and other
illegal payments.
Without our prior approval, Employees may not directly or indirectly
offer, solicit, provide or accept any kind of payments, commitments (whether
cast in the form of commissions, payments, fees or goods or services received or
otherwise) or contribution of a significant value (other than salary, wages or
other ordinary compensation from the Company) for the purpose of:
- influencing customers, suppliers or governmental entities including
their officers or employees to cause any privilege or favor toward
the Company or its products,
- obtaining, giving or keeping business,
- persuading any officials or employees for another company to fail to
perform or improperly perform their duties, or
- influencing legislation or regulations.
The Company policy does not prohibit expenditures of nominal amounts by
Employees for meals and entertainment of suppliers and customers which are
ordinary and customary business expenses, if they are otherwise lawful. The
lawful expenditures incurred in this way should be properly accounted for in an
expense report. Employees may not use Company's funds, goods or services as
contributions for political parties, candidates or campaigns, unless previously
authorized in writing by the Company.
XIV. RECORD RETENTION AND DESTRUCTION; GOVERNMENT INVESTIGATIONS
The Company's corporate records are important assets. The Company is
required by Law and its business needs to follow certain specific requirements
in managing Company records, including certain requirements regarding the
retention and destruction of certain records. Records include paper documents,
CDs, computer hard disks, e-mail, floppy disks, microfiche, microfilm and all
other media, and all other records Employees produce, whether in hard copy or
electronic form, and informal records such as desk calendars and personal notes
regarding company matters. The Company and its Employees may be subject to
certain civil and criminal penalties for failure to comply with these
requirements. From time to time the Company establishes retention or destruction
policies and schedules for specific categories of records in order to ensure
legal compliance, and also to accomplish other objectives, such as preserving
intellectual property and cost management.
Each Employee must fully comply with any such published records retention
or destruction policies and schedules with the important exceptions described
below. If an Employee has reason to believe, or the Company informs an Employee
(such as through a legal hold described in the next subsection), that Company
records are relevant to pending or anticipated litigation or a governmental
proceeding or investigation, then the Employee must preserve those records until
the Company's legal counsel determines that the records are no longer needed.
This exception to any record destruction policy supersedes any previously or
subsequently established destruction schedule for those records. If an Employee
has reason to believe that the exception to
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any record destruction policy may apply, or has any question regarding the
possible applicability of such exception, the Employee should contact the
Company's CEO or Chief Financial Officer for advice.
XV. ADMINISTRATION OF CODE OF BUSINESS CONDUCT
This Code of Business Conduct of the Company shall be administered as
follows:
A. SCOPE. The Audit Committee shall, periodically, in light of the
experience of the Company, review this Code, and when necessary or desirable,
make recommendations to the Board of Directors (i) to ensure its continued
conformance to applicable Law, (ii) to ensure that it meets or exceeds industry
standards, and (iii) to ensure that any weaknesses revealed through monitoring,
auditing and reporting systems are eliminated or corrected.
B. ALLOCATIONS OF RESPONSIBILITY. The Audit Committee shall be responsible
for the administration of this Code. The Audit Committee shall establish such
procedures as it shall deem necessary or desirable in order to discharge this
responsibility. Such procedures shall provide for obtaining advice of legal
counsel where appropriate. In discharging these responsibilities, the Audit
Committee may delegate authority to such committees, officers and other
employees and may engage such agents and advisors as it shall deem necessary or
desirable.
C. DELEGATION OF SUBSTANTIAL DISCRETIONARY AUTHORITY. No Employee shall
delegate substantial discretionary authority to any individual who such Employee
knows, or through the exercise of due diligence should know, has a propensity to
engage in illegal activities.
D. COMMUNICATION OF POLICIES. To ensure the continued dissemination and
communication of this Code, the Audit Committee shall take, or cause to be
taken, reasonable steps to communicate effectively the standards and procedures
included in this Code to employees and agents of the Company.
E. MONITORING AND AUDITING. The Audit Committee shall take reasonable
steps to monitor and audit compliance with this Code, including the
establishment of monitoring and auditing systems that are reasonably designed to
detect conduct in violation of this Code by employees and agents of the Company.
To the extent so directed by the Audit Committee, the information
developed by the Company's independent accountants in performing their
engagement by the Company and by its internal auditors in the performance of
their assigned responsibilities shall be made available to the Audit Committee
in its capacity as administrator of this Code as a means of monitoring and
auditing compliance with this Code.
To the extent so directed by the Audit Committee, the results of the
periodic health, safety and environmental audits and export administration
audits of the Company's facilities shall be made available to the Audit
Committee in its capacity as the administrator of this Code as a means to
monitor and audit compliance with this Code.
F. BOARD COMMITTEES. The CEO or the Chief Financial Officer shall report
to the Audit Committee, at least once each year, regarding the general
effectiveness of this Code.
G. REPORTING PROCEDURES. The Company expects Employees to report possible
violations of this Code. No retaliatory action will be taken against Employees
who report in good faith suspected criminal
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activity or ethical violations. You should first consult with your immediate
supervisor. Supervisors are responsible for maintaining a workplace environment
that encourages and solicits frank and open communication regarding the
importance of operating under this Code.
Employees that feel uncomfortable raising a concern with their immediate
supervisor should notify the head of their operation. If this course of action
is not acceptable under the circumstances, Employees may contact the Chief
Financial Officer or any other Senior Officer, or any member of the Audit
Committee. Employees may write directly to the Audit Committee at the following
address:
Audit Committee
Exchange National Bancshares, Inc.
132 East High Street, Box 688
Jefferson City, MO 65102
Attn: Chairman of Audit Committee
Employees may make reports anonymously to the Audit Committee as stated
above if the Employees deem it necessary. Employees are, however, encouraged to
identify themselves, in the knowledge that there will be no retaliation where
reports are made in good faith, to enable the Company to clarify details and
take appropriate action.
The Company will promptly forward all financial matters complaints to the
Audit Committee to investigate as appropriate and, as appropriate, will
investigate any report of alleged misbehavior, take the appropriate action and
respect the rights of all parties concerned.
H. INVESTIGATION OF VIOLATIONS. If, through operation of the Company's
compliance monitoring and auditing systems or its violation reporting systems or
otherwise, the Company receives information regarding an alleged violation of
this Code, the person or persons authorized by the Audit Committee to
investigate alleged violations of this Code shall, as appropriate:
1. evaluate such information as to gravity and credibility;
2. initiate an informal inquiry or a formal investigation with
respect thereto;
3. prepare a report of the results of such inquiry or investigation,
including recommendations as to the disposition of such matter;
4. make the results of such inquiry or investigation available to
the Board of Directors or the Audit Committee for action;
5. recommend discipline or changes in this Code necessary or
desirable to prevent further similar violations; and
6. if required, ensure reporting of any change or waiver of this
Code within 2 business days of the change or waiver on a Form 8-K or on
the Company's website.
The Company may disclose the results of investigations to law enforcement
agencies.
I. DOCUMENTATION. Subject to the applicable document retention program,
the Company shall document its compliance efforts and results to evidence its
commitment to comply with the standards and procedures set forth above.
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XVI. COMPLIANCE WITH CODE
The Company encourages strict compliance with this Code. Failure to comply
with this Code can have severe consequences for both Employees and the Company.
The Audit Committee will impose appropriate discipline, which may include
discharge, for violations of this Code. Conduct that violates this Code may also
violate national or state laws and can subject both Employees and the Company to
civil and criminal penalties. Only with the approval of our board of directors
or any committee created by our board of directors, the Company may, in special
and appropriate circumstances, waive compliance with this Code by individual
Executive Officers or Directors.
XVII. DISSEMINATION; DISTRIBUTION AND ACKNOWLEDGMENT
This Code will be posted at each Company office and facility in the
appropriate locations. If required by applicable Law, amendments to this Code
will be filed with the SEC on Form 8-K and posted at each Company office and
facility.
* * *
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[AT COMMENCEMENT OF EMPLOYMENT AND ON A PERIODIC BASIS THEREAFTER, ANYONE WHO
MAY HAVE ACCESS TO SENSITIVE INFORMATION WILL BE PROVIDED WITH A COPY OF THIS
CODE AND WILL BE REQUIRED TO SIGN THE PRESCRIBED FORM OF ACKNOWLEDGMENT.]
I acknowledge that I have received a copy of the Exchange National
Bancshares, Inc. Code of Business Conduct and Ethics and that I have read this
Code and understand its provisions.
_______________________ ________________________________________
Date Signature
________________________________________
Printed Name
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