Complaint Procedures for
Accounting, Internal Accounting Controls and Auditing Matters
Any employee of First South Bancorp, Inc. (the
“Company”), including employees of First South Bank
(the “Bank”) and/or subsidiaries of the Company or the
Bank, may submit a good faith complaint regarding accounting or
auditing matters to the management of the Company without fear of
dismissal or retaliation of any kind. In addition, any person, including
employees of the Company or the Bank, may submit good faith complaints
regarding accounting, internal accounting controls or auditing matters
with confidence that the matter will be investigated thoroughly
with appropriate remedial action taken if necessary. The Company
is committed to achieving compliance with all applicable securities
laws and regulations, accounting standards, accounting controls
and audit practices. The Company’s Audit Committee will oversee
treatment of concerns in this area.
In order to facilitate the reporting of employee
and non-employee complaints, the Company’s Audit Committee
has established the following procedures for (1) the receipt, retention
and treatment of complaints regarding accounting, internal accounting
controls, or auditing matters (“Accounting Matters”)
and (2) the confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters.
Receipt of Complaints
• Persons, including employees, with concerns
regarding Accounting Matters may report their concerns to the Chairman
of the Audit Committee of the Company.
• Employees may forward concerns regarding questionable accounting
or auditing matters on a confidential or anonymous basis to the
Audit Committee Chairman through regular mail at the following address:
Mr. H. D. Reaves, Jr.
Audit Committee Chairman
First South Bancorp, Inc./First South Bank
1311 Carolina Avenue
Washington, NC 27889
Scope of Matters Covered by These Procedures
These procedures relate to concerns regarding
any questionable accounting or auditing matters, including, without
limitation, the following:
• Fraud or deliberate error in the preparation, evaluation,
review or audit or any financial statement of the Company;
• Fraud or deliberate error in the recording and maintaining
of financial records of the Company;
• Deficiencies in or noncompliance with the Company’s
internal accounting controls;
• Misrepresentation or false statement to or by a senior officer
or accountant regarding a matter contained in the financial records,
financial reports or audit reports of the Company; or
• Deviation from full and fair reporting of the Company’s
financial condition or results of operations.
Treatment of Complaints
• Upon receipt of a complaint, the Audit
Committee Chairman will (i) determine whether the complaint actually
pertains to Accounting Matters and (ii) when possible, acknowledge
receipt of the complaint to the sender.
• Complaints relating to Accounting Matters will be reviewed
under Audit Committee direction and oversight by such person(s)
as the Audit Committee determines to be appropriate. Confidentiality
will be maintained to the fullest extent possible, consistent with
the need to conduct an adequate review.
• Prompt and appropriate corrective action will be taken when
and as warranted in the judgment of the Audit Committee.
• The Company will not discharge, demote, suspend, threaten,
harass, or in any manner discriminate against any employee in the
terms and conditions of employment based upon any lawful actions
of such employee with respect to good faith reporting of complaints
regarding Accounting Matters or otherwise as specified in Section
806 of the Sarbanes-Oxley Act of 2002.
Reporting and Retention of Complaints and
• The Chairman of the Audit Committee
will maintain a log of all complaints and concerns, tracking their
receipt, investigation and resolution, and shall prepare a periodic
summary report thereof for the Audit Committee. Copies of complaints
and such log will be maintained in accordance with the Company’s
document retention policy.