I. FIRST SOUTH BANK’S POLICY
First South Bank’s policies and guidelines respecting
compliance with the bank bribery statute and conflicts of interest
are set out below. References to First South Bank shall hereinafter
be referred to as "First South".
II. ACCEPTING GIFTS MAY BE A CRIME
It is a federal crime for any representatives
of First South or any of its affiliates to seek or accept anything
of value, for themselves or others, in connection with business
of First South where there is a corrupt intent that such representatives
shall be influenced or rewarded related to First South business.
It is also a crime for anyone (including customers, vendors, and
others) to offer or give anything to representatives of First South
with corrupt intent.
This is provided in Title 18, 215 of the United
States Code. A copy of that statute is attached. It should be read.
Violations are punishable by fines and imprisonment. Section 215
applies to officers, directors, employees, agents or attorneys of
First South and its affiliates. Such persons are referred to below
as representatives of First South.
III. POLICY REGARDING ACCEPTING GIFTS
A. General Policy
Except as provided below, no representative of
First South may:
(1) solicit for themselves or for a third party
(other than First South) anything of value from anyone in return
for any business, service or confidential information of First South,
(2) accept anything of value (other than bona
fide salary, wages or fees) from anyone in connection with the business
of First South, either before or after the transaction is discussed
B. Guidelines Regarding Certain Permitted Transactions
First South recognizes that there are instances
where a representative of First South may, without risk of corruption
or breach of trust, accept something of value from someone doing
or seeking to do business with First South. In general there is
no threat of violation of Section 215:
(1) if the acceptance is based on a family or
personal relationship existing independent of any business of First
(2) if the benefit is available to the general
public under the same conditions on which it is available to the
representative of First South, or
(3) if the benefit would be paid for by First
South as a reasonable business expense if not paid for by another
Provided there is no corrupt intent by either
the giver or the receiver of the benefit, the following may be accepted
under the circumstances described:
a. Gifts, gratuities, amenities or favors based
on obvious family or personal relationships (such as those between
the parents, children or spouse of a representative of First South)
where the circumstances make it clear that it is those relationships
rather than the business of First South, which is the motivating
b. Meals, refreshments, entertainment, accommodations
or travel arrangements, all of reasonable value not to exceed $250
per day, in the course of a meeting or other occasion where the
purpose is to hold bona fide business discussions or to foster better
business relations, provided the expense would be paid for by First
South as a reasonable business expense if not paid for by another
c. Gifts of reasonable value, not to exceed $100,
that are related to commonly recognized events or occasions, such
as a promotion, new job, wedding, retirement, holiday or birthday;
d. Civic, charitable, educational or religious
organizational awards for recognition of service and accomplishments
not to exceed $100 in value;
e. Loans from other banks or financial institutions
on customary terms to finance proper and usual activities by a representative
of First South, such as a home mortgage loan;
f. Advertising or promotional material of reasonable
value, such as pens, pencils, note pads, key chains, calendars and
g. Discounts or rebates on merchandise or services
that do not exceed those available to other customers.
C. Transactions Permitted on a Case by Case Basis
Gifts and things of value may be accepted in
circumstances not described above if they are consistent with the
bank bribery statute and approved in writing by the Executive Management
Committee. Requests for approval may be made on a case by case basis.
Persons requesting such approvals shall submit their requests in
writing and shall describe in writing all of the facts relevant
to the request. Requests not submitted in advance should include
an explanation of the reason prior approval was not obtained. If
a request is submitted after a gift or favor has been received,
and the request is denied, then the gift or favor shall be disposed
of as directed by the Executive Management Committee. Written records
of all requests and approvals or disapprovals will be kept.
D. Reporting Gifts that Violate the Policy
Whenever gifts are offered or received that violate
this policy, they must be reported to the Executive Management Committee
together with all relevant facts. The Executive Management Committee
will review all such disclosures. Contemporaneous written records
of all such disclosures will be kept.
E. Disposition of Prohibited Gifts
If a gift prohibited under this policy statement is received, it
should be returned to the donor with an explanation. If return is
not possible, the recipient should consult the Executive Management
Committee. Depending on the circumstances, any such gifts will be
turned over to First South or to a charitable institution. When
possible, the donor will be informed of this disposition.
F. Reimbursement for Personal Expenses
First South will pay payments and reimbursements
to representatives of First South for travel and personal expenses
incurred in connection with First South business. No reimbursement
will be made for excessive or unusual expenses. Normally, payments
for such expenses made by customers, vendors or others should be
made to First South.
G. Apply Common Sense
The purpose of these policies is to avoid violations
of 18 U.S.C. 215 and to ensure that First South business is safeguarded
from the influence of bribery or personal favors. Whenever representatives
of First South have personal dealings with persons who have business
with First South, the requirements of the law must be kept in mind.
Necessarily, the application of the guidelines stated in Paragraph
B above will require good judgement and common sense. If representatives
of First South encounter situations in which they are not sure of
their obligations or if they find the application of these guidelines
to be unduly restrictive, they should consult the Executive Management
Committee. Under no circumstances should they accept any personal
gift or favor if it appears that by giving it the donor hopes to
influence any business of First South or to reward them for actions
taken by them on behalf of First South.
H. Personal Relationships with Customers and
It is inevitable and desirable that persons associated
with First South will have individual business and personal relationships
unrelated to First South business, with First South customers, vendors,
and others who do business with First South. This policy statement
is not intended to discourage such relationships. Any personal business
relationships should be on customary terms and for proper and usual
purposes, however, and no one associated with First South should
solicit any special favors in recognition of his or her position
with First South. See Section IV below.
IV. POLICY REGARDING CONFLICTS OF INTEREST
A. General Policy
Conflicts of interest may arise when individuals
associated with First South acquire personal interests or engage
in outside activities in which their normal self interests or obligations
to others conflict with the interests of First South or its customers.
In some circumstances, engaging in conflicts
of interest violates the law. In other cases, conflicts of interest
may lead individuals to accept inappropriate personal benefits,
which may violate the law. In all cases, where even the appearance
of a conflict exists, there may be damage to First South reputation
for integrity. Ultimately, our success depends on our reputation
for integrity and we will take whatever steps may be necessary in
order to preserve our good name.
Accordingly, First South policy is that no employee,
officer or director may engage in activities or acquire interests
which conflict with the interests of First South or its customers.
Guidelines respecting certain specific practices and conditions
are discussed below. It is not possible to describe every possible
conflict of interest. The fact that a particular practice or condition
is not prohibited below does not mean that it has been approved.
Questions will necessarily arise and they should
be addressed to the Executive Management Committee. All potential
conflicts of interest must be disclosed to the Executive Management
Committee as provided in Paragraph D below. Employees should not
attempt to resolve ambiguous or uncertain issues by themselves.
B. Misuse of Position with First South
The fact that a person holds a position with
First South may not be used as the basis to seek or accept any business
opportunity or other favor or benefit that is not available to persons
who are not employed by First South. For example, no representative
of First South may accept any offer to buy securities or other types
of property or assets at terms, which are more favorable than the
terms available to the general public, if the offer is made because
the person is associated with First South. See Sections II and III
C. Guidelines Respecting Transactions Between
Employees and Persons Outside First South
No representative of First South may become involved
in outside business interests or employment that gives rise to a
conflict of interest. The following are examples of conduct that
may give the appearance of a conflict of interest. The list is not
intended to be complete and all representatives of First South should
use their best judgments to avoid even the appearance of a conflict
(1) OUTSIDE EMPLOYMENT. Officers and employees
of First South are expected to devote their full time attention
and abilities to First South during regular hours of employment
and such additional time as may be required. No other employment
or activities should be undertaken if they would impair an individual’s
ability to properly perform his or her job responsibilities. The
Executive Management Committee must approve outside employment that
an employee of First South reasonably believes would give the appearance
of a conflict of interest or damage the reputation of First South.
No employment by a competitor of First South will be approved.
(2) OUTSIDE BUSINESS VENTURES. Representatives
of First South who have interests in companies that engage in transactions
with First South may not participate in any decisions regarding
those transactions. Representatives of First South that have material
interests in companies that engage in transactions with First South
should disclose the relationships as provided in Section D.
(3) PERSONAL LOANS. No representative of First
South may lend money to a customer of First South where such relationship
would give the appearance that the representative of First South
was using his or her position with First South to obtain the loan.
No representative of First South may borrow money from any company
that engages in transactions with First South unless that company
makes loans in the ordinary course of its business and unless such
loans are made on terms that are generally available to the public.
(4) RELATIVES. Relatives of persons associated
with First South are encouraged to become customers of the Bank.
No employee may make decisions or represent the Bank in matters
involving loans to relatives, or investment of the Bank’s funds
with relatives, or purchasing goods or services from relatives.
(5) EMPLOYMENT OF RELATIVES. No person who is
related by blood or marriage to a representative of First South
may be employed by First South unless the relationship has been
disclosed to and approved by the Executive Management Committee.
D. Disclosure of Possible Conflicts of Interest
All representatives of First South are required
to disclose all potential conflicts of interest, including those
in which they have been inadvertently placed due to either business
or personal relationships with customers, suppliers, business associates
or competitors of First South. Any questions regarding a relationship
should be addressed to the Executive Management Committee.
E. Loans to Directors and Executive Officers
Loans to Directors and Officers of First South
Bank in compliance with Regulation O, issued by the Board of Governors
of the Federal Reserve System.
V. BUSINESS INFORMATION IS CONFIDENTIAL
A. Business Information May Not Be Disclosed
Information about First South business and information
supplied to First South by its customers (including prospective
customers) and suppliers in the course of business relations is
confidential. Employees may not disclose such information to other
persons except to the extent that disclosure is necessary to carry
out assigned responsibilities. Questions about disclosing information
should be addressed to the Executive Management Committee.
B. Requests for Information by News Media, Financial
Analysts, Financial Institutions and Others
From time to time employees may receive requests
for information about First South or its customers or suppliers
from the news media, investment analysts, financial institutions,
or others. All such inquiries should be referred to an officer of
the Bank. No employee may respond to such inquires unless expressly
directed to do so by the President.
C. Information May Not be Used for Personal Purposes
No employee may use confidential information,
which might reflect upon the investment value or future market value
of any business enterprise for purposes of personal advantage or
to provide an advantage to others. In particular, information received
in the course of employment with First South that is not available
to the general public may never be used as the basis for making
any decision to buy or sell stocks or other securities. Likewise,
such information may not be used in giving investment advice to
VI. ACKNOWLEDGMENT OF AGREEMENT TO COMPLY
WITH FIRST SOUTH POLICY REGARDING ACCEPTING GIFTS AND CONFLICTS
Each director, officer and employee of First
South shall sign a Certificate of Agreement to comply with this
policy. Persons who are appointed or employed after this policy
is adopted shall sign such a Certificate upon their appointment
or employment. At times in the future when this policy is amended,
all such persons shall also acknowledge and agree to the changes
by written certificate.
VII. MAINTENANCE AND AMENDMENT OF POLICY
The Board of Directors has approved this policy.
A copy will be available to be reviewed by any employee at each
office of First South.
The Executive Management Committee shall maintain
copies of all disclosures and other records or reports required
by this policy to be made in writing for a period of no less than
No less frequently than annually, the Executive
Management Committee shall review these policies to determine whether
amendments are required or desirable. The result of such review
shall be reported to the Board of Directors.
VIII. THIS POLICY IS FOR THE BENEFIT OF FIRST
This policy is for the benefit of First South
and the guidance of its personnel. It is intended to assist persons
who are seeking to comply with the bank bribery statute and related
laws. The fact that all of the provisions of this policy may not
have been complied with in a particular instance is no evidence
of a violation of any law.
This policy does not establish rights or
standards enforceable against First South. Exceptions may be made
in particular circumstances by the Executive Management Committee.