Exhibit 14
EMCLAIRE FINANCIAL CORP.
CODE OF PERSONAL AND BUSINESS CONDUCT AND ETHICS
I. GENERAL POLICY STATEMENT
It is the policy of Emclaire Financial Corp. ("the Company"), the
parent company of Farmers National Bank of Emlenton (collectively, the
"Company") to conduct its business in accordance with the highest
ethical standards in order to merit and maintain the complete
confidence and trust of its clients and the public in general. This
Code of Personal and Business Conduct and Ethics ("Code") addresses
both business and social relationships that may present legal and
ethical concerns and also sets forth a code of conduct to guide the
members of the board of directors and staff members. We expect every
employee, officer and director of the Company to read and understand
the Code and its application to the performance of his or her business
responsibilities. Directors and staff members must conduct their
personal affairs and maintain their business transactions in a manner,
which does not result in adverse comments or criticisms from the public
or in any way damage our reputation as a responsible financial services
organization. The term "staff member" refers to all officers and
employees of the Company.
Because the principles described in this Code are general in nature,
you should also review all applicable Company policies and procedures
for more specific instruction, and contact the Human Resources
Department if you have any questions.
Nothing in this Code, in any Company policies and procedures, or in
other related communications (verbal or written) creates or implies an
employment contract or term of employment.
We are committed to regularly reviewing and updating our policies and
procedures. Therefore, this Code is subject to modification. This Code
supersedes all other such codes, policies, procedures, instructions,
practices, rules or written or verbal representations to the extent
they are inconsistent.
A. Compliance with Laws and Regulation
-----------------------------------
Ethical business conduct is critical to our business. It is our policy
to fully comply with the spirit and intent of all applicable laws,
rules and regulations. Violations of these laws, rules and regulations
can create significant civil and/or criminal liability for you, the
Company, our directors, officers and other employees. We expect you to
use good judgment and high ethical standards and to refrain from any
form of illegal, dishonest or unethical conduct.
We hold periodic training sessions to ensure that all employees comply
with the relevant laws, rules and regulations associated with their
employment, including laws prohibiting insider trading (which are
discussed in further detail in Section V below). While we do not expect
you to memorize every detail of these laws, rules and regulations, we
want you to be able to determine when to seek advice from others. If
you do have a question in the area of legal compliance, it is important
that you not hesitate to seek answers from your supervisor or the
Compliance Officer.
Disregard of the law will not be tolerated. You should be aware that
conduct and records, including emails, are subject to internal and
external audits, and to discovery by third parties in the event of
government investigation or civil litigation. It is in everyone's best
interests to know and comply with our legal and ethical obligations.
B. Administration of the Code
--------------------------
It is your responsibility to be familiar with the Code. Supervising
officers are expected to make every reasonable effort to ensure that
their subordinate staff continues to comply with the provisions of the
Code.
Senior management shall administer the Code, determine matters of
interpretation, and coordinate periodic changes to the Code. The
continued implementation of the Code shall be accomplished by audit,
examination and personnel procedures.
You are encouraged to seek the advice of the appropriate supervisor
regarding questions of interpretation and of the applicability of the
provisions of the Code to a particular situation.
You will be required to sign a written acknowledgment of receipt of a
copy of the Code and of any subsequent changes thereto and return the
form to the Human Resources Department indicating that you have
received, read, understand and agree to comply with the Code. The
signed acknowledgment form will be located in your personnel file.
Part of your job and ethical responsibility is to help enforce this
Code. You should be alert to possible violations and report possible
violations to the Human Resources Department. You must cooperate in any
internal or external investigations of possible violations. Reprisal,
threats, retribution or retaliation against any person who has in good
faith reported a violation or a suspected violation of law, this Code
or other Company policies, or against any person who is assisting in
any investigation or process with respect to such a violation, is
prohibited.
Violations of law, this Code, or other Company policies or procedures
should be reported in accordance with Section XI.
Violations of law, this Code or other Company policies or procedures by
staff members can lead to disciplinary action up to and including
termination.
In trying to determine whether any given action is appropriate, use the
following test. Imagine that the words you are using or the action you
are taking is going to be fully disclosed in the media with all the
details, including your photo. If you are uncomfortable with the idea
of this information being made public, perhaps you should think again
about your words or your course of action.
In all cases, if you are unsure about the appropriateness of an event
or action, please seek assistance in interpreting the requirements of
these practices by contacting the Human Resources Department.
II. CONFLICTS OF INTEREST
Each of us has a responsibility to the Company, our stockholders and
each other. Although this duty does not prevent us from engaging in
personal transactions and investments, it does demand that we avoid
situations where a conflict of interest might occur or appear to occur.
A. Policy
------
It is our policy that directors, officers and employees do not engage
in personal conduct, which will conflict with the interest of the
Company. It is important to avoid even the appearance of a conflict of
interest, since the appearance can be as damaging to our reputation as
an actual conflict. Whether or not a conflict of interest exists or
will exist can be unclear. Conflicts of interest are prohibited unless
specifically authorized as described below.
If you have any questions about a potential conflict or if you become
aware of an actual or potential conflict, and you are not an officer or
director of the Company, you should discuss the matter with your
supervisor or the Compliance Officer (as further described in Section
XI). Supervisors may not authorize conflict of interest matters without
first seeking the approval of the Compliance Officer and filing with
the Compliance Officer a written description of the authorized
activity. If the supervisor is involved in the potential or actual
conflict, you should discuss the matter directly with the Compliance
Officer. Officers and directors may seek authorization from the Audit
Committee. Factors that may be considered in evaluating a potential
conflict of interest are, among others:
o whether it may interfere with the individual's job
performance, responsibilities or morale;
o whether the individual has access to confidential
information;
o whether it may interfere with the job performance,
responsibilities or morale of others within the
organization;
o any potential adverse or beneficial impact on our business;
o any potential adverse or beneficial impact on our
relationships with our customers or suppliers or other
service providers;
o whether it would enhance or support a competitor's position;
o the extent to which it would result in financial or other
benefit (direct or indirect) to the individual;
o the extent to which it would result in financial or other
benefit (direct or indirect) to one of our customers,
suppliers or other service providers; and
o the extent to which it would appear improper to an outside
observer.
B. Acceptance of Gifts
-------------------
You and your immediate families shall not solicit, accept, or retain
any benefit themselves or for any third party from any of our clients,
any individual or organization doing or seeking to do business with us,
or from any other individual or organization that maintains a banking
relationship with us. In this context, a benefit is regarded as any
type of gift, gratuity, service, loan, legacy (except from a relative),
fee or compensation, or anything of monetary value.
Specific exception to this prohibition may be made if there is no, and
there appears to be no, reasonable likelihood of improper influence in
your performance of duties on behalf of the Company. The personal
benefit, however, must be one of the following:
o normal business courtesies, such as a meal, refreshment or
entertainment of reasonable value, involving no more than
ordinary amenities, in the course of a meeting or other
occasion, the purpose of which is to hold bona fide business
discussions;
o non-cash gifts of reasonable value (under $100.00) when
received at holiday time or for special occasions, such as a
new job, promotion, wedding, or retirement, which represent
an expression of friendship;
o gifts based upon kinship, marriage or social relationships
entirely beyond and apart from any business relationship;
o unsolicited advertising and promotional material of nominal
value;
o awards given by charitable, education, civic, or religions
organizations for meritorious contributions or service;
o loans from other banks or financial institutions on
customary terms to finance proper and usual activities such
as home mortgage loans;
o discounts or rebates on merchandise or services that do not
exceed those available to other clients.
Any personal benefit offered or received, other than the exceptions
noted above, is to be reported by the staff member to the Compliance
Officer who will review the situation and instruct the staff member as
to the appropriate action. The Compliance Officer shall keep
contemporaneous written records of all such disclosures. The Compliance
Officer shall report any such personal benefit received directly to the
Audit Committee. Directors and executive officers will report directly
to the Audit Committee.
It is important to recognize that federal law makes it a crime for any
officer, director, or employee of a federally-insured bank or bank
holding company, directly or indirectly, to ask, solicit, accept,
receive, or agree to receive any thing of value, for himself/herself or
for any other person or entity, for or in connection with any
transaction or business of the Company. Until recently, this federal
law only applied to bribes to procure or attempt to procure a loan.
However, the recent amendment to this federal bribery statute
eliminates the necessity of showing that the staff member received
payment in exchange for making a loan. The penalty for violating this
law is a fine, imprisonment, or both. Any offer of such an improper
payment should be immediately reported to the Compliance Officer.
C. Political Contributions
-----------------------
U.S. federal and state laws limit the nature and extent of individual
and corporate political participation. For example, federal law and
that of many states prohibit corporate contributions to political
candidates or officeholders.
Federal law and Company policy also state that the Company will not
reimburse anyone for personal political contributions. The Company will
not alter personal compensation in any way under any circumstances to
reflect personal political contributions.
D. Outside Activities
------------------
We discourage staff members from holding outside employment. In those
instances where it is justified, written approval from the Human
Resources Department is required. No outside employment or activity
will be approved which might subject us to criticism or which will
impact the staff member's productivity.
We encourage individual participation in civic activities. Normally,
volunteer efforts must take place outside of regular business hours. If
volunteer efforts require business time, prior approval should be
obtained by the staff member from his or her manager.
Staff members are not to act, without prior written approval from the
Human Resources Department, as executor, administrator, trustee,
guardian or conservator, or in any outer fiduciary capacity, whether or
not it is related to our business. Staff members may act as fiduciary
for a family member(s) without prior approval.
It is a conflict of interest to serve as a director of any company that
competes with us. Although you may serve as a director of a Company
supplier, customer, developer or other business partner, our policy
requires that you first obtain approval from the President and CEO
before accepting a directorship for any company. Any compensation you
receive should be commensurate to your responsibilities. Such approval
may be conditioned upon the completion of specified actions. Serving as
a director of a non-profit organization, charity or similar entity does
not violate this policy and does not require approval. If you are an
officer or director of the Company, you must receive prior approval
from the Audit Committee.
D. The Foreign Corrupt Practices Act
---------------------------------
The U.S. Foreign Corrupt Practices Act, as amended by the International
Anti-Bribery and Fair Competition Act of 1998 (FCPA), makes it a crime
to bribe officials of another country. The law applies to U.S.
companies and their domestic and foreign subsidiaries, and their
employees or agents (whether or not U.S. nationals), as well as other
foreign persons who violate the law in the U.S. The FCPA has two basic
parts: (1) anti-bribery provisions, and (2) accounting and
record-keeping requirements.
The anti-bribery provisions make it illegal to bribe a foreign public
official, political party, party official or candidate for political
office, or an official of a public international organization. The FCPA
defines a "bribe" as any payment, directly or indirectly, or any offer
or promise to pay, anything of value (whether cash or otherwise) to the
recipient for the purpose of influencing or rewarding an act or
decision to obtain, retain or direct business, or for the purpose of
obtaining any "improper advantage" (e.g., tax breaks, immunities,
permits or priorities not otherwise earned). The FCPA's accounting and
record-keeping provisions require companies to keep detailed corporate
books, records and accounts, and prohibit the falsification of those
materials. The accounting and record-keeping provisions apply to
domestic as well as foreign operations of publicly traded U.S.
companies. These requirements complement the anti-bribery provision by
preventing the creation of unreported slush funds for illegal payments.
It is important to understand that the law requires strict accuracy in
documentation and reporting.
These provisions can be interpreted to include relatively small sums
from petty cash funds.
Consistent with the FCPA, the Company's corporate policy requires that:
o No Company employee or agent will pay or offer a "bribe" as
defined in the FCPA;
o No Company employee or agent will establish any undisclosed
or unrecorded fund of cash or assets for any purpose, or
make any false, artificial, or misleading entries in any
books or records of the Company;
o No Company employee or agents will approve or make any
payment for any purpose other than that described by the
document supporting the payment; and
o The Assistant Vice President/Controller must provide prior
written approval before a Company employee or agent:
o Makes any payment or gift to foreign public or party
officials, international public officials or foreign
political candidates of more than a nominal value;
o Pays travel or lodging expenses of, or makes any
substantial entertainment expenditure for, any of those
officials;
o Makes any "facilitating or grease payments" to
facilitate routine governmental action of more than a
nominal value;
o Makes contributions to campaigns of foreign political
parties, officials or candidates;
o Engages an agent, consultant, or advisor who may have
dealings with foreign governments or political parties
on behalf of Equifax; or
o Makes any payment arrangements where a person
performing services or selling goods in one country
requests that payments be made in another country
("split payments arrangements").
Anyone who is convicted of violating the FCPA is subject to substantial
fines or imprisonment.
E. Personal Finances
-----------------
Personal finances should be managed in a manner consistent with
employment in a financial institution. Staff members and their
immediate families should borrow only from reputable organizations,
which regularly lend money, and such borrowing must carry the
prevailing rate of interest and not involve favored treatment of any
kind. Borrowing from relatives is not subject to restriction. Staff
members are not permitted to borrow from their co-workers, but should
discuss any financial emergency with Human Resources.
Staff members should not sign on clients' accounts, act as deputy or
co-renter of clients' safe deposit boxes, or otherwise represent
clients. This does not include clients related to the staff member by
blood or marriage. A staff member may be one of several signatures to a
non-profit organization deposit account that requires two or more
signatures.
F. Personal Investment Activity
----------------------------
While we do not intend to unreasonably limit you in your personal
investment activities, it is our policy that you not enter into
investment transactions which would create, or give the appearance of
creating, a conflict of interest between you and the Company or between
the Company and any client. Many factors should be considered in
determining whether a conflict exists, including the size and nature of
the investment; your ability to influence the Company's decisions; your
access to confidential information of the Company or of the other
company; and the nature of the relationship between the Company and the
other company.
G. Related Parties
---------------
As a general rule, you should avoid conducting Company business with a
relative or significant other, or with a business in which a relative
or significant other is associated in any significant role. Relatives
include spouse, sister, brother, daughter, son, mother, father,
grandparents, aunts, uncles, nieces, nephews, cousins, step
relationships and in-laws. Significant others include persons living in
a spousal or familial fashion with you.
If such a related party transaction is unavoidable, you must fully
disclose the nature of the related party transaction to the Company's
Compliance Officer. If determined to be material to the Company by the
Compliance Officer, the Company's Audit Committee must review and
approve in writing in advance such related party transactions. The most
significant related party transactions, particularly those involving
the Company's directors or executive officers, must be reviewed and
approved in writing in advance by the Company's Board of Directors. We
must report all such material related party transactions under
applicable accounting rules, federal securities laws, Securities and
Exchange Commission rules and regulations, and securities market rules.
Any dealings with a related party must be conducted in such a way that
no preferential treatment is given to this business.
The Company prohibits the employment of relatives and significant
others in positions or assignments that have a financial dependence or
influence (e.g., an auditing or control relationship, or a
supervisor/subordinate relationship). The purpose of this policy is to
prevent the organizational impairment and conflicts that are a likely
outcome of the employment of relatives or significant others,
especially in a supervisor/subordinate relationship. If a question
arises about whether a relationship is covered by this policy, the
Human Resources Department is responsible for determining whether an
applicant's or transferee's acknowledged relationship is covered by
this policy. The Human Resources Department shall advise all affected
applicants and transferees of this
policy. Willful withholding of information regarding a prohibited
relationship/reporting arrangement may be subject to corrective action,
up to and including termination. If a prohibited relationship exists or
develops between two employees, the employee in the senior position
must bring this to the attention of his/her supervisor. The Company
retains the prerogative to separate the individuals at the earliest
possible time, either by reassignment or by termination, if necessary.
H. Lending Practices
-----------------
1. It is our policy to maintain prudent lending services to
adequately supply the credit needs of our clients. Any rate
concessions shall be based solely upon a borrower's
creditworthiness and overall business relationship with the
Company.
2. You are not in any way to represent or exercise authority on
behalf of the Company, grant direct or indirect
accommodations or make credit recommendations with respect
to:
o members of your family;
o any individual or organization to which you or your
immediate family is indebted;
o any organization with which you or your immediate
family is associated or in which a material financial
interest is held.
3. You may recommend loan or service accommodations to
non-profit organizations for which you serve as a board
member or officer, but must fully disclose this relationship
at the time of recommendation. Such accommodation must be
approved by a second party within normal authority
guidelines.
4. Federal law prohibits any director, officer or employee of
the Company from granting any loan or gratuity to any public
company, examiner or assistant bank examiner, who examines
the Company or has authority to examine the Company.
I. Giving Advice to Customers
--------------------------
You may occasionally be asked by clients to comment upon the legality
of a particular transaction. Since the Company cannot practice law or
give legal or tax advice, staff members must exercise care in
discussing transactions with clients and nothing should be said that
might be interpreted as the giving of legal or tax advice.
III. CORPORATE OPPORTUNITY
Employees, officers and directors may not exploit for their own
personal gain opportunities that are discovered through the use of
corporate property, information or position unless the opportunity is
disclosed fully in writing to the Company's Board of Directors and the
Board of Directors declines to pursue such opportunity.
IV. CONFIDENTIALITY
A. Customer Information
--------------------
Safeguarding the confidential financial information concerning our
clients is essential in maintaining the public trust. It is our policy
that such confidential information acquired by a staff member through
his or her employment must be held in the strictest confidence. Such
information is to be held for Company purposes and not as a basis for
personal gain by a staff member. Aside from routine personal credit
inquiries, information regarding a client may be released to private
persons, organizations or governmental bodies that request it generally
only with the written consent of the client involved or upon receipt of
a legal document, such as subpoena or court order. Confidential client
information should never be discussed with anyone outside the Company,
and only with those within the Company who have a legitimate business
need to know. This obligation to keep confidential such information
continues not only while a staff member is employed by the company, but
also continues after such employment ends.
B. Information Regarding the Company/Media Relations
-------------------------------------------------
Financial or other proprietary and/or confidential information
regarding the Company is not to be released to any outside person or
organization unless it has been published in reports to shareholders,
or otherwise made available to the public through authorized news
releases. All news media inquiries and other outside inquiries
regarding the Company must be referred to the President/CEO.
C. Material Inside Information
---------------------------
The use or disclosure of "material inside information" subjects staff
members, the Company, and third parties to whom the information is
communicated, to severe penalties under federal and state securities
laws. Information is "material" when there is significant likelihood
that a reasonable investor would think the information is important in
making an investment decision. Information is "inside" when it has not
been disseminated to the public at large. Any staff member possessing
such material inside information must not trade in or recommend the
purchase or sale of the securities involved until the information is
actually disseminated to the public. Lending personnel must not
disclose confidential information on existing or proposed loan clients
to investment personnel.
D. Disclosure of Company Confidential Information
----------------------------------------------
To further the Company's business, from time to time our confidential
information may be disclosed to potential business partners. However,
such disclosure should never be done without carefully considering its
potential benefits and risks. If you determine in consultation with
your manager and other appropriate Company management that disclosure
of confidential information is necessary, you must then contact the
Compliance Officer to ensure that an appropriate written nondisclosure
agreement is signed prior to the disclosure. We have standard
nondisclosure agreements suitable for most disclosures.
E. Requests by Regulatory Authorities
----------------------------------
The Company and its directors, officers, employees, agents and
contractors must cooperate with appropriate government inquiries and
investigations. In this context, however, it is important to protect
the legal rights of the Company with respect to its confidential
information. All government requests for information, documents or
investigative interviews must be referred to the Compliance
Officer. No financial information may be disclosed without the prior
approval of the Compliance Officer.
V. OBLIGATIONS UNDER SECURITIES LAWS - "INSIDER" TRADING
Directors and staff members who have access to confidential (or
"inside") information are not permitted to use or share that
information for stock trading purposes or for any other purpose except
to conduct our business. All non-public information about the Company
or about companies with which we do business is considered confidential
information. To use material non-public information in connection with
buying or selling securities, including "tipping" others who might make
an investment decision on the basis of this information, is not only
unethical, it is illegal. Information is generally considered to be
"material" if a reasonable investor would likely consider it to be
important in making his or her investment decision, or if the release
of the information is reasonably certain to have an effect on the price
of the Company's stock. You must exercise the utmost care when handling
material inside information. We have adopted a separate Insider Trading
Policy to which you are bound as a condition of your employment here.
You should consult the Insider Trading Policy for more specific
information on the definition of "material inside information" and on
buying and selling our securities or securities of companies with which
we do business.
VI. PROTECTION AND PROPER USE OF COMPANY'S ASSETS
A. General
-------
Protecting the Company's assets is a key fiduciary responsibility of
every employee, agent, consultant and contractor. Care should be taken
to ensure that assets are not misappropriated, loaned to others, sold
or donated, without appropriate authorization. All Company staff
members, agents, consultants and contractors are responsible for the
proper use of Company assets, and must safeguard such assets against
loss, damage, misuse or theft. Staff members, agents, consultants or
contractors who violate any aspect of this policy, are subject to
disciplinary action including immediate termination of employment or
the business relationship. Those staff members who demonstrate poor
judgment in the manner in which they use any Company asset may be
subject to disciplinary action, up to and including termination of
employment or business relationship at the Company's sole discretion.
Company equipment and assets are to be used for Company business
purposes only. Staff members, agents, consultants and contractors may
not use Company assets for personal use, nor may they allow any other
person to use Company assets. Staff members who have any questions
regarding this policy should bring them to the attention of the
Company's Human Resources Department.
B. Physical Access Control
-----------------------
The Company has and will continue to develop procedures covering
physical access control to ensure privacy of communications,
maintenance of the security of the Company communication equipment and
safeguard Company assets from theft, misuse and destruction. You are
personally responsible for complying with the level of access control
that has been implemented in the facility where you work on a permanent
or temporary basis. You must not defeat or cause to be defeated the
purpose for which the access control was implemented.
C. Company Funds
-------------
You are personally responsible for all Company funds over which you
exercise control. Company agents and contractors should not be allowed
to exercise control over Company funds. Company funds must be used only
for Company business purposes. Every Company staff member, agent,
consultant and contractor must take reasonable steps to ensure that the
Company receives good value for Company funds spent, and must maintain
accurate and timely records of each and every expenditure. Expense
reports must be accurate and submitted in a timely manner. Company
staff members, agents, consultants and contractors must not use Company
funds or Company guaranteed credit cards for any personal purpose.
D. Computers and Other Equipment
-----------------------------
We strive to furnish staff members with the equipment necessary to
efficiently and effectively perform their jobs. Staff members must care
for that equipment and to use it responsibly primarily for Company
business purposes. If Company equipment is used at your home or off
site, takes precautions to protect it from theft or damage, just as if
it were your own. Please refer to the Company's IT Policies for
additional information. If the Company no longer employs you, you must
immediately return all Company equipment. While computers and other
electronic devices are made accessible to employees to assist them to
perform their jobs and to promote Company's interests, all such
computers and electronic devices, whether used entirely or partially on
the Company's premises or with the aid of the Company's equipment or
resources, must remain fully accessible to the Company and, to the
maximum extent permitted by law, will remain the sole and exclusive
property of the Company.
Staff members, agents and contractors should not maintain any
expectation of privacy with respect to information transmitted over,
received by or stored in any electronic communications device owned,
leased or operated in whole or in part by or on behalf of the Company.
To the extent permitted by applicable law, we retain the right to gain
access to any information received by, transmitted by or stored in any
such electronic communications device, by and through its employees,
agents, contractors or representatives, at any time, either with or
without an employee's or third party's knowledge, consent or approval.
E. Software
--------
All software used by employees to conduct Company business must be
appropriately licensed. Never make or use illegal or unauthorized
copies of any software, whether in the office, at home or on the road,
since doing so may constitute copyright infringement and may expose you
and the Company to potential civil and criminal liability. In addition,
use of illegal or unauthorized copies of software may subject the
employee to disciplinary action, up to and including termination. The
Company's Information Technology Department will inspect Company
computers periodically to verify that only approved and licensed
software has been installed. Any non-licensed/supported software will
be removed.
F. Electronic Media Usage
----------------------
The purpose of this policy is to make certain that staff members
utilize electronic communication devices in a legal, ethical and
appropriate manner. This policy addresses the Company's
responsibilities and concerns regarding the fair and proper use of all
electronic communications devices within the organization, including
computers, e-mail, connections to the Internet, intranet
and extranet and any other public or private networks, voice mail,
video conferencing, facsimiles and telephones. Posting or discussing
information concerning our products or business on the Internet without
the prior written consent of the Company's Compliance Officer is
prohibited. Staff members who use E-mail for personal messages do so
with the knowledge that the Company reserves the right to monitor
and/or review all electronic communications if and when it deems
appropriate. All E-mail messages, all Company records and the equipment
and systems are Company property. Accordingly, Company employees are
expected to use the E-mail system properly and not assume that their
messages are confidential. Also the improper use of E-mail, e.g. for
the purposes of harassment and discriminating behavior, will result in
disciplinary action up to and including dismissal. Any other form of
electronic communication used by employees currently or in the future
is also intended to be encompassed under this policy. It is not
possible to identify every standard and rule applicable to the use of
electronic communications devices. You are therefore encouraged to use
sound judgment whenever using any feature of our communications
systems.
VII. MAINTAINING AND MANAGING RECORDS
A. General
-------
The purpose of this policy is to set forth and convey the Company's
business and legal requirements in managing records, including all
recorded information regardless of medium or characteristics. Records
include paper documents, CDs, computer hard disks, email, floppy disks,
microfiche, microfilm or all other media. We are required by local,
state, federal, foreign and other applicable laws, rules and
regulations to retain certain records and to follow specific guidelines
in managing its records. Civil and criminal penalties for failure to
comply with such guidelines can be severe for employees, agents,
contractors and the Company, and failure to comply with such guidelines
may subject the employee, agent or contractor to disciplinary action,
up to and including termination of employment or business relationship
at the Company's sole discretion.
B. Records on Legal Hold
---------------------
A legal hold suspends all document destruction procedures in order to
preserve appropriate records under special circumstances, such as
litigation or government investigations. Legal counsel determines and
identifies what types of Company records or documents are required to
be placed under a legal hold. Every Company staff member, agent and
contractor must comply with this policy. Failure to comply with this
policy may subject the staff member, agent or contractor to
disciplinary action, up to and including termination of employment or
business relationship at the Company's sole discretion, and potentially
to criminal prosecution.
The Compliance Officer will notify you if a legal hold is placed on
records for which you are responsible. You then must preserve and
protect the necessary records in accordance with instructions from the
Company's legal counsel. RECORDS OR SUPPORTING DOCUMENTS THAT HAVE BEEN
PLACED UNDER A LEGAL HOLD MUST NOT BE DESTROYED, ALTERED OR MODIFIED
UNDER ANY CIRCUMSTANCES. A legal hold remains effective until it is
officially released in writing by the Company's legal counsel. If you
are unsure whether a document has been placed under a legal hold, you
should preserve and protect that document while you check with the
Compliance Officer.
If you have any questions about this policy you should contact the
Compliance Officer.
C. Document Integrity
------------------
The integrity of our records and public disclosure depends on the
validity, accuracy and completeness of the information supporting the
entries to our books of account. Therefore, our corporate and business
records should be completed accurately and honestly. The making of
false or misleading entries, whether they relate to financial results
or test results, is strictly prohibited. Our records serve as a basis
for managing our business and are important in meeting our obligations
to customers, suppliers, creditors, employees and others with whom we
do business. As a result, it is important that our books, records and
accounts accurately and fairly reflect, in reasonable detail, our
assets, liabilities, revenues, costs and expenses, as well as all
transactions and changes in assets and liabilities. We require that:
o no entry be made in our books and records that intentionally
hides or disguises the nature of any transaction or of any
of our liabilities, or misclassifies any transactions as to
accounts or accounting periods;
o transactions be supported by appropriate documentation;
o the terms of sales and other commercial transactions be
reflected accurately in the documentation for those
transactions and all such documentation be reflected
accurately in our books and records;
o employees comply with our system of internal controls; and
o no cash or other assets be maintained for any purpose in any
unrecorded or "off-the-books" fund.
Our accounting records are also relied upon to produce reports for our
management, stockholders and creditors, as well as for governmental
agencies. In particular, we rely upon our accounting and other business
and corporate records in preparing the periodic and current reports
that we file with the SEC. These reports must provide full, fair,
accurate, timely and understandable disclosure and fairly present our
financial condition and results of operations. Employees who collect,
provide or analyze information for or otherwise contribute in any way
in preparing or verifying these reports should strive to ensure that
our financial disclosure is accurate and transparent and that our
reports contain all of the information about the Company that would be
important to enable stockholders and potential investors to assess the
soundness and risks of our business and finances and the quality and
integrity of our accounting and disclosures. In addition:
o no employee may take or authorize any action that would
cause our financial records or financial disclosure to fail
to comply with generally accepted accounting principles, the
rules and regulations of the SEC or other applicable laws,
rules and regulations, or take any action to coerce,
manipulate, mislead or fraudulently influence any
independent public accountant or certified public accountant
engaged in the performance of an audit or review of the
Company's financial statements if that person knew, or
should have known, that such action, if successful, could
result in rendering the Company's financial statements
materially misleading;
o all employees must cooperate fully with our internal
accounting department, as well as our independent public
accountants and counsel, respond to their questions with
candor and provide them with complete and accurate
information to help ensure that our books and records, as
well as our reports filed with the SEC, are accurate and
complete; and
o no employee should knowingly make (or cause or encourage any
other person to make) any false or misleading statement in
any of our reports filed with the SEC or knowingly omit (or
cause or encourage any other person to omit) any information
necessary to make the disclosure in any of our reports (or
in any auditing review or examination of our financial
statements) accurate in all material respects.
Any employee who becomes aware of any departure from these standards
has a responsibility to report his or her knowledge promptly to a
supervisor, the Compliance Officer or one of the other compliance
resources described in Section XI. The falsification of any books,
records or documents of the Company is grounds for dismissal.
VIII. FAIR DEALING
We strive to outperform our competition fairly and honestly. Advantages
over our competitors are to be obtained through superior performance of
our products and services, not through unethical or illegal business
practices. Acquiring proprietary information from others through
improper means, possessing trade secret information that was improperly
obtained, or inducing improper disclosure of confidential information
from past or present employees of other companies is prohibited, even
if motivated by an intention to advance our interests. If information
is obtained by mistake that may constitute a trade secret or other
confidential information of another business, or if you have any
questions about the legality of proposed information gathering, you
must consult your supervisor or the Compliance Officer, as further
described in Section XI.
You are expected to deal fairly with our customers, suppliers,
employees and anyone else with whom you have contact in the course of
performing your job. No staff member may take unfair advantage of
anyone through misuse of confidential information, misrepresentation of
material facts or any other unfair dealing practice.
Staff members involved in procurement have a special responsibility to
adhere to principles of fair competition in the purchase of products
and services by selecting suppliers based exclusively on normal
commercial considerations, such as quality, cost, availability, service
and reputation, and not on the receipt of special favors.
IX. MISCELLANEOUS GUIDELINES FOR CONDUCT
A. Dealing with Competitors
------------------------
It is our policy is to require staff members to observe fair and
ethical conduct in dealing with our competitors. The making of
disparaging remarks regarding our competitors is deemed to be
inappropriate and unethical. Our strategy is to emphasize the quality
and competence of our staff and services. Staff members are prohibited
from involving the Company in arrangements with its competitors which
provide for the setting or controlling of rates, prices, or marketing
policies.
B. Exclusive Dealings
------------------
It is our policy that we do not base the sale and/or provision of
services to a client upon the condition that the client must purchase
other services from us or upon the condition that the client is
prohibited from dealing with other suppliers of such services.
C. Dealings with Auditors and Examiners
------------------------------------
Staff members are required to fully cooperate with the audits conducted
by the Company's internal audit staff, external auditing firms, and any
regulators. Questions raised by the auditors or examiners must be
responded to honestly, and no adverse information in response to a
question may be concealed.
D. Falsification of Books and Records
----------------------------------
It is our policy to maintain records and accounts that accurately
reflect its assets, liabilities, receipts and disbursements. The
falsification of any books, records or documents of the Company is
grounds for dismissal.
E. User Codes and Passwords
------------------------
Staff members who are assigned user codes and establish passwords for
the purpose of accessing computer information are prohibited from
sharing these codes and passwords with any co-worker. Staff members are
also prohibited from inputting their user codes and passwords to allow
a co-worker to access information at his or her terminal.
F. Special Requirements for Government Contracts
---------------------------------------------
The Company provides products and services under several contracts with
federal and state government agencies. Employees who are involved with
those contracts must be careful to follow additional rules that apply
to government contracts. Some of those rules are as follows:
o It is illegal under both U.S. federal and state law to
solicit, offer, or pay any bribe or other gratuity to a
public official for the purpose of influencing an official
act or decision;
o It is illegal under the U.S. federal False Claims Act to
file a false report or make any false statement for the
purpose of either making a claim for payment from the
government, or avoiding a specific payment obligation to the
government.
X. WAIVERS
Any waiver of any provision of this Code for a member of the Company's
Board of Directors or an executive officer must be approved in writing
by the Company's Board of Directors and promptly disclosed in
accordance with law. Any waiver of any provision of this Code with
respect any other employee, agent or contractor must be approved in
writing by the Company's Compliance Officer.
XI. COMPLIANCE STANDARDS AND PROCEDURES - REPORTING AND INVESTIGATING
MISCONDUCT
A. Compliance Resources
--------------------
To facilitate compliance with this Code, we have implemented a program
of Code awareness, training and review. We have established the
position of Compliance Officer to oversee this program. The Compliance
Officer is a person to whom you can address any questions or concerns.
The Compliance Officer, Andrew M. Hogue, can be reached at extension
223. In addition to fielding questions or concerns with respect to
potential violations of this Code, the Compliance Officer is
responsible for
o investigating possible violations of the Code;
o training new employees in Code policies;
o conducting annual training sessions to refresh employees'
familiarity with the Code;
o distributing copies of the Code annually [via email] to each
employee with a reminder that each employee is responsible
for reading, understanding and complying with the Code;
o updating the Code as needed and alerting employees to any
updates, with appropriate approval of the Audit Committee of
the Board of Directors, to reflect changes in the law,
Company operations and in recognized best practices, and to
reflect Company experience; and
o otherwise promoting an atmosphere of responsible and ethical
conduct.
Your most immediate resource for any matter related to the Code is your
supervisor. He or she may have the information you need, or may be able
to refer the question to another appropriate source. There may,
however, be times when you prefer not to go to your supervisor. In
these instances, you should feel free to discuss your concern with the
Compliance Officer. If you are uncomfortable speaking with the
Compliance Officer because he or she works in your department or is one
of your supervisors, please contact Stan C. Simons, Vice
President/Human Resources.
If you have questions about the Company policy, need guidance on
specific situations or want to report violations of the Code, see
Section B below.
B. Clarifying Questions and Concerns; Reporting Possible Violations
----------------------------------------------------------------
If you encounter a situation or are considering a course of action and
its appropriateness is unclear, discuss the matter promptly with your
supervisor or the Compliance Officer; even the appearance of
impropriety can be very damaging and should be avoided.
If you are aware of a suspected or actual violation of Code standards
by others, you have a responsibility to report it. You are expected to
promptly provide a compliance resource with a specific description of
the violation that you believe has occurred, including any information
you have about the persons involved and the time of the violation.
Whether you choose to speak with your supervisor or the Compliance
Officer, you should do so without fear of any form of retaliation. We
will take prompt disciplinary action against any employee who
retaliates against you, up to and including termination of employment.
Supervisors must promptly report any complaints or observations of Code
violations to the Compliance Officer. The Compliance Officer will
investigate all reported possible Code violations promptly and with the
highest degree of confidentiality that is possible under the specific
circumstances. Your cooperation in the investigation will be expected.
As needed, the Compliance Officer will consult with the Human Resources
department and/or the Audit Committee of the Board of Directors
If the investigation indicates that a violation of the Code has
probably occurred, we will take such action as we believe to be
appropriate under the circumstances. If we determine that an employee
is responsible for a Code violation, he or she will be subject to
disciplinary action up to, and including, termination of employment
and, in appropriate cases, civil action or referral for criminal
prosecution. Appropriate action may also be taken to deter any future
Code violations.
Anyone can communicate with the Compliance Officer, either anonymously
or by name, by any of the following methods:
o In writing, addressed to the Compliance Officer, either by
internal mail or by U.S. mail to Andrew M. Hogue, Compliance
Officer, Farmers National Bank, Drawer D, Emlenton, PA
16373.
o By phone at 724-867-2311,ext. 223.
o By e-mail to ahogue@farmersnb.com
Callers who wish to follow up on their call will be assigned a
confidential ID number. You may also contact the Compliance Officer by
any of these methods with any questions about the Code.
XII. DISCIPLINARY ACTIONS
The matters covered in this Code are of the utmost importance to the
Company, its stockholders and its business partners, and are essential
to the Company's ability to conduct its business in accordance with its
stated values. We expect all of our directors, officers, employees,
agents, contractors and consultants to adhere to these rules in
carrying out their duties for the Company.
The Company will take appropriate action against any director, officer,
employee, agent, contractor or consultant whose actions are found to
violate these policies or any other policies of the Company.
Disciplinary actions may include immediate termination of employment or
business relationship at the Company's sole discretion. Where the
Company has suffered a loss, it may pursue its remedies against the
individuals or entities responsible. Where laws have been violated, the
Company will cooperate fully with the appropriate authorities.
XIII. ACKNOWLEDGMENT OF RECEIPT OF CODE OF PERSONAL AND BUSINESS CONDUCT AND
ETHICS
I have received and read the Company's Code of Personal and Business
Conduct and Ethics. I understand the standards and policies contained
in the Company Code of Personal and Business Conduct and Ethics and
understand that there may be additional policies or laws specific to my
job. I further agree to comply with the Company Code of Personal and
Business Conduct and Ethics.
If I have questions concerning the meaning or application of the
Company Code of Personal and Business Conduct and Ethics, any Company
policies, or the legal and regulatory requirements applicable to my
job, I know I can consult my manager or the Human Resources Department,
knowing that my questions or reports to these sources will be
maintained in confidence.
I understand that my agreement with the Code of Personal and Business
Conduct and Ethics does not constitute a contract of employment.
-----------------------------
Please sign above
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Please print your name above
-----------------------------
Date
All directors, officers, and exempt employees must sign and return this form to
the Human Resources Department