Code of Ethics and Conflict of Interest Policy
This policy establishes standards of ethical business behavior and personal conduct. Fundamental to our continued success is the perpetuation of integrity and the highest ethical standards. The intent of this policy is to safeguard our Bank's tradition of strong moral, ethical, and social standards of conduct.
This policy applies to all officers, employees, and directors of Opportunity Bank of Montana (“OBMT” or “Bank”).
A bank is a business built upon public trust and confidence and depends upon a favorable perception of the conduct of its business by customers, regulators, suppliers, and others in both the business and general community. We should all be continually sensitive to the fact that our actions as viewed by disinterested observers are subject to close scrutiny and critical interpretation. Even the appearance of a conflict of interest may be as damaging to you and our business as an actual conflict.
Since it is impossible to anticipate all of the many circumstances that may be covered by this policy, you are urged to interpret it in the broadest possible sense. Violation of this policy will be considered a serious matter and a willful or flagrant violation will be considered grounds for termination of employment. Accordingly, we urge you to review this policy with great care and develop a full understanding of its meaning.
- Personal Conduct.
An obligation rests with every officer and employee of OBMT to render honest, efficient, and courteous performance of duties and to conform to OBMT’s standards of conduct. Respectful behavior and a reasonable attitude toward work are required. All officers and employees are required to comply with – and therefore will be held responsible and accountable for adhering to - OBMT’s policies, rules, directives and procedures prescribed by OBMT through supervisory or management personnel.
Furthermore, officers and employees must never use their position with OBMT in an attempt to influence public officials or others for personal gain or benefit. Nor should OBMT employment be used as leverage for favors from customers or suppliers.
It is the policy of OBMT to thoroughly investigate the occurrence of any major infraction and to appropriately discipline any responsible officer or employee up to and including termination of employment. Major infractions include but are not limited to the following:
Any action which renders an officer, employee or director an unacceptable security risk, adversely affects the Bank's public image, or causes embarrassment to the Bank or its customers.
Release of confidential information, or use of confidential information for personal gain.
Violation of OBMT’s Equal Employment Opportunity Policy or Equal Opportunity in Lending Policy.
Violation of any federal, state, or local law or ordinance, or any rule or regulation pertaining to job responsibilities.
Misuse, misappropriation, or willful destruction or waste of assets or property belonging to the Bank, its customers, or other employees.
Fighting with or physically abusing others or behaving in an offensive manner during work hours.
Unauthorized possession, distribution, or use of any intoxicant, controlled substance, or drug (except as prescribed by a licensed physician) during work hours.
Removing or borrowing Bank property without permission.
Helping anyone gain unauthorized entrance to the Bank’s facilities or property.
Persistent financial irresponsibility.
Willful failure to follow instructions; insubordination.
Failure to report to work without proper notification to management or leaving the Bank without proper authority.
Disregarding safety or security regulations.
- Dishonest or Fraudulent Acts.
All officers and employees have a duty to report, verbally or in writing, promptly and confidentially, any evidence of any improper practice of which they are aware. As used here, the term "improper practice" means any illegal, fraudulent, dishonest, negligent or otherwise unethical action arising in connection with Bank operations or activities. Regulatory authorities require that a written report be submitted by the appropriate Bank officer whenever a fraudulent act or theft occurs.
Bank officers or employees may file an anonymous complaint regarding the Bank’s accounting, internal controls, and auditing using the Whistle Blower Procedures outlined in the employee handbook.
Reports of other types of improper practice should be submitted through the department supervisor or Human Resources Officer.
Every employee is covered by our fidelity bond. OBMT will not continue to employ anyone who ceases to be eligible for this coverage. Coverage under the terms of our bond ceases for anyone who has been found to commit any dishonest or fraudulent act. Obviously this includes the misappropriation of money or other property. While not so obvious, also included are the misposting of accounts to favor oneself or another, or the making of any other false entries, records, or reports, and the deliberate misrouting of checks to delay payment. All transactions of the Bank will be identified precisely and recorded in the financial records of the Bank in accordance with generally accepted accounting practices.
Whoever embezzles abstracts or willfully misapplies any of the Bank's money, funds, assets or valuables entrusted to the custody or care of OBMT shall be liable for criminal prosecution.
The same consequence applies to whoever makes any false entry in any book, report or statement of OBMT with the intent to injure or defraud OBMT or with the intent to deceive any director/officer/employee of the Bank, an examiner, auditor or the Federal Reserve Bank and the State of Montana.
Whoever (except as provided by law) stipulates for or receives or consents to receive any fee, commission, gift or thing of value from any person or firm for procuring or endeavoring to procure for such person or firm or for any other person or firm any loan or extension or renewal of loan or substitution of securities, or the purchase or discount of any paper, note or bill of exchange shall be liable for criminal prosecution.
Protection of Confidential Information.
During the course of their work, OBMT officers, directors, and employees may become aware of confidential information about the Bank's customers and suppliers. Such information is privileged and must be held in the strictest of confidence. It is to be used solely for Bank purposes and never for personal gain by the employee or anyone else's personal benefit. Under no circumstances should such information be transmitted to persons outside the Bank, including family or associates, or even to other employees of OBMT unless they need to know in order to discharge their responsibilities. Care should be taken not to discuss any matter of a confidential nature in public where the conversation might be overheard.
All officers, directors, and employees of OBMT should conduct their financial affairs in such a responsible manner as to be above criticism. The following list is intended only as a guide and not as a complete or exhaustive list:
Prompt payment of personal bills and debts.
Avoid overdrafts in personal checking accounts.
Use of any Bank credit cards, expense account reimbursements, equipment and supplies only for official Bank use.
Avoidance of salary advances.
Employee loans are to be in strict compliance with internal policies. This also applies to overdrafts.
Employees are not to borrow money from customers or suppliers of OBMT, other than recognized lending institutions. The term "borrow" does not include a purchase from a customer or supplier resulting in an extension of credit in the normal course of business.
Incurring indebtedness only for legitimate purposes made in accordance with the requirements of Regulation O and any other applicable laws, regulations or guidelines.
Acting as an accommodation cosigner or guarantor for others often results in the accommodation cosigner or guarantor having to pay the obligation. Employees should not, therefore, assume such liabilities unless they are in a position to pay the obligation upon demand.
OBMT officers, directors, and employees should avoid entering into transactions where it may appear that they are improperly benefiting from their relationship with OBMT or which may violate fiduciary relationships. While a complete list of such matters cannot be given, the following transactions violate this policy and suggest situations to be avoided:
No investment interest, direct or indirect, in any of the Bank's customers or suppliers is permitted except as outlined below in paragraphs (b) and (c). Any exceptions must be approved in advance by the Chairman of the Board or President of the Bank. This prohibition applies to all forms of investment including, but not limited to, securities, investment in a proprietorship, joint venture, or similar business activities.
Investments are permitted in companies who are customers and/or suppliers if such securities are listed on an organized exchange, or are traded in the over the counter market, or if it is otherwise evident and clear that such investments are not being made on any terms that are more favorable than those terms available to the general public; subject, however, to the following restrictions:
Caution should be exercised by each officer, director, or employee to assure that the nature and amount of such permitted investments are in such amounts as are prudent for a person maintaining a financial condition entirely within conservative limits.
Acceptance of preferential treatment in the form of an allocation of "hot" issues that are, or may become, in such demand that the broker, investment banker, issuer, or other seller of securities could reasonably expect to receive or has already received favorable treatment by reason of making the allocation available is prohibited.
Investments in "limited partnership interests" will be permitted if it is evident that such investments are not being made on terms more favorable than those that are available to the general public. In the case of "limited partnership investments", it would be important that an individual's investment be only one of several such interests sold to the general public and in such amounts as are prudent for a person maintaining a financial condition entirely within conservative limits.
Personal investments or investments of immediate family members should never involve the use of any confidential information which might be considered to be "insider information", i.e., information not publicly disclosed.
In the event that OBMT markets real or personal property in which an officer, director, or employee has an interest to purchase, the property will only be sold under the following conditions. The transaction must occur on the same terms as would be available to non-employees, the transaction must be approved by the Board of Directors (for a director or officer) or reported to the Board (for an employee), and in the case of affiliated persons the transaction must be approved by the Bank’s regulators.
Membership in Community or Charitable Organizations.
Officers, directors, and employees have been and are encouraged to be active and involved participants in the community. Membership in organizations such as Big Brothers and Sisters, Kiwanis, and United Way is encouraged. Membership in service clubs is especially encouraged for those employees who are in regular contact with the public. Such activities should be limited by the person's own interests and reasonable time requirements. Major outside commitments must be approved in advance by the immediate supervisor or other designated member of management. Other than the community activity described above, officers and employees are discouraged from engaging in any outside interest which will divert time or attention from his/her Bank duties.
Directors, Officers, or Partners in Outside Companies.
No officer, director, or employee shall serve as an officer or director of an outside business organization, except a well-known nonprofit organization, without notification to management. Likewise, no officer, director, or employee shall become a partner in an economic venture without notification to management.
Trade Associations and Relations with Competitors.
OBMT will act with trade associations and competitors only on behalf of ethical objectives and will not participate in business activities that are or could be construed to be in violation of anti-trust laws.
It is the policy of OBMT not to contribute money, property, or services to any government official, political party, or candidate whether local, state or federal.
It follows that the Bank is prohibited from offering or allowing the use of its facilities, equipment, and personnel in connection with any federal, state, or local election or campaign.
Officers, directors, and employees may, and are encouraged to, engage in any governmental, regulatory, and elective process in which they are interested. This participation may be on an individual basis, group basis, or as a member of a political action committee. Since the Bank is without preference as to political parties, candidates, and opinions, each officer, director, and employee must act only on his/her own behalf and not give any representation that he/she represents anyone other than himself/herself.
At times when OBMT deems it appropriate to publicly state a corporate position on a public issue, it will designate a spokesman to speak either in support of or opposition to issues pending before public bodies.
Although OBMT has a policy of maintaining good relations with all news media and tries to accommodate media inquiries, there is much information concerning the Bank that should not be made available to the public. This includes information about customers which the Bank has a responsibility not to divulge as well as information which may be valuable to a competitor.
For these and other reasons, any inquiry made of you about the Bank or a customer by the news media should be referred to the appropriate officer.
All OBMT advertising will ensure the ethical content and moral impact of any advertising in any type media made for or on behalf of the Bank shall be in accordance with social values and accepted good taste.
Use of Bank Letterhead.
No officer, director, or employee will use official Bank stationary for personal or non-job related purposes, particularly when such use would imply endorsement by the Bank, or makes reference to Bank employment in matters of personal dispute.
Receipt of Gifts.
Neither OBMT officers, nor employees shall accept gifts of substantial value or unusual hospitality from any supplier or customer. It is neither practical nor desirable to have an inflexible rule against gifts of any specific kind or to precisely define a "substantial gift". Any doubt about the proper course of action should be discussed with your supervisor. Expenses paid for trips or other extensive entertainment by customers or suppliers must be approved in advance by the Chief Executive Officer/President.
Bequests or Legacies from Non-relatives.
It is against the policy of OBMT for an officer or employee to accept bequests or legacies from a customer under a Will or Trust Instrument.
OBMT is very conscious of its liability in handling all customer accounts. Because of this concern, we do not want our officers or employees included on customer accounts in any capacity unless they are immediate family member accounts; accounts in which the customer and the employee are contributors to the account; or as a member of an organization having an account. In addition, employees cannot personally do any transactions on their own personal accounts or those of immediate family members or any account of an organization to which they belong. These transactions include, but are not limited to: loans, deposits and withdrawals, cashing of checks, opening of new accounts, information changes on accounts, handling of safety deposit boxes, etc. Any employee who notes a suspicious transaction by another employee or officer should bring it to the attention of their supervisor or any Bank officer.
For customer account purposes, immediate family is defined as: spouse, children, parents, grandparents, brothers, sisters and grandchildren and those spousal counterparts.
Conflicts of Interest.
Officers, directors, and employees of OBMT are expected to conduct their private business and personal activities in a manner that avoids conflict of interest either with the Bank or the Bank's customers. "Conflict of interest" is defined as any situation where an individual has two or more duties or interests that are mutually incompatible. Example: An officer, director, or employee has a personal financial interest in a business or venture that banks with OBMT so that one’s judgment might reasonably be influenced by that non-bank relationship. No lending officer or employee should loan, review a loan, or make any decision regarding a loan of any customer, syndicate, or corporation in which he or she has a present or a prospective financial interest.
Loan applications submitted to OBMT loan officers by relatives or close personal friends (or entities controlled by relatives or close personal friends) are to be approved by the Senior Loan Committee.
No officer, director, or employee should take advantage of a business opportunity for his/her own or another person's personal benefit when such opportunity is within the corporate powers of OBMT and when the opportunity is of present or potential practical advantage to OBMT.
Provision for Dealing with Policy Violations.
Known or suspected conflicts of interest, usurpations of corporate opportunity, dishonest or fraudulent acts, and/or significant violations of the code of ethics must be reported as soon as possible to an Executive Officer (president/chief executive officer, chief lending officer, senior vice president/branch operations admin., senior vice president/branch retail admin. or chief financial officer). An appropriate response will be decided upon by the Executive Officers no later than the next monthly Executive Officers meeting following the report of known or suspected violation.
Known or suspected violations involving the president/chief executive officer must be reported as soon as possible to the vice-chairman of the Board of Directors. An appropriate response will be decided upon by only the outside directors no later than the next regular monthly Board of Directors meeting following the report of known or suspected violation.
Additional items specifically for principal executive officer (President/Chief Executive Officer), principal financial officer (Senior Vice President – Chief Financial Officer), and the principal accounting officer (Controller) and Financial Reporting Officer.
Opportunity Bank of MT (the Bank) is a wholly owned subsidiary of Eagle Bancorp Montana, Inc. (Eagle) which acts as the Bank’s holding company. Eagle has no other significant activities other than acting as the Bank’s holding company. As such, in substance, all Bank employees are Eagle employees. Eagle is a publicly traded company and therefore subject to federal and state rules and regulations regarding financial securities. Herein, “Company” refers to both the Bank and Eagle.
The President/Chief Executive Officer, Senior Vice President – Chief Financial Officer, Financial Reporting Officer and Controller will report the company’s financial position and activities in full, fair, accurate, and timely reports to the Securities and Exchange Commission (SEC) and in any other public release of financial information in accordance with generally accepted accounting principles and SEC rules and regulations.
All financial activities will be recorded in the company’s ledgers accurately, completely, and in the proper time period in accordance with prescribed accounting standards. Those financial items that encompass significant management assumptions (such as, but not limited to allowance for doubtful accounts) will be made in accordance with prescribed policies and procedures and using best judgment and estimates. The overriding factor when applying accounting assumptions will be to present the financial results accurately and fairly. Under no circumstances will these officers use their position to influence others in making inaccurate, incorrect, or misleading entries into the company’s financial records.
Violations of these provisions are considered to be a serious matter and if willful or flagrant will be considered grounds for termination of employment.
In summary, the officers, directors, and employees of Opportunity Bank must be conscious of the fact that in the eyes of our customers and of the general public we are custodians of their financial assets. It is their expectation that we will exercise great care with these assets and the fact that we do not have any conflicts of interest or the appearance of a conflict of interest will contribute greatly to their confidence in Opportunity Bank of Montana.
In order to assure that each officer, director, and employee understands this policy, they will be required to sign a Certification and Disclosure Form (Exhibit A) that acknowledges their responsibility for ethical conduct and conflicts of interest.
Directors and Principal Officers (Vice President and above) will also be required to sign Disclosure Form (Exhibit B) annually.
Code of Ethics_A form Code of Ethics_B form
Charter Of The Nominating Committee Of The Board Of Directors Of Eagle Bancorp Montana, Inc.
I. The Committee's Purpose
The Nominating Committee ("Committee") is appointed by the Board of Directors (Board) of Eagle Bancorp ("Eagle") for the primary purpose of:
- identifying diverse individuals qualified to become members of the Board;
- recommending to the Board the director nominees for the next annual meeting of shareholders;
- consider nominees proposed by shareholders of Eagle; and
- evaluation of the Board and its members.
II. Committee Composition and Meetings
The Committee shall be comprised of three or more independent directors, all of whom must qualify as independent directors under the listing standards of The Nasdaq Stock Market, Inc. In addition, each member shall be free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment.
The members shall be appointed annually to one-year terms by the Board. The Committee shall designate one member of the Committee as Chairperson. The members shall serve until their resignation, retirement, removal by the Board or until their successors shall be appointed. No member of the Committee shall be removed except by majority vote of the independent directors of the Board then in office.
The Committee shall fix its own rules of procedure, which shall be consistent with the Bylaws of Eagle and this Charter.
The Committee shall meet at least twice annually and more frequently as circumstances require or dictate. The Committee Chair must approve an agenda in advance of each meeting.
The Chairperson of the Committee or a majority of the members of the Committee may call a special meeting of the Committee.
A majority of the members of the Committee shall constitute a quorum.
The Committee may request that any directors, officers or employees of Eagle, or other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information as the Committee requests.
Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all actions taken by the Committee at the meeting.
The Committee shall keep written minutes of its meetings, which shall be maintained with the books and records of Eagle.
III. Committee Duties and Responsibilities
Board Vacancies. When a vacancy occurs on the Board by reason of disqualification, resignation, retirement, death or an increase in the size of the Board, the Committee shall nominate a replacement director for the Board.
Assess Board Membership Needs and Nominate Directors. Determine what types of backgrounds are needed to help strengthen and balance the Board and to nominate appropriate candidates to fill vacancies accordingly.
- Select, or recommend to the Board, director nominees to fill vacancies on the Board as necessary.
- Be constantly alert to the needs of the Board and maintain an active file of suitable candidates for consideration as nominees to the Board, which candidates may include, if the Committee deems it advisable, those recommended by the Chief Executive Officer and other members of the Board. In compiling the file, the Committee shall consider, where appropriate, the independence of each candidate.
- Consider the candidate's knowledge of the banking business and involvement in the community, business and civic affairs, and also consider whether the candidate would provide for adequate representation of its market area. Any nominee for director made by the Committee must be highly qualified with regard to some or all these attributes. The Committee will not recommend that the stock ownership, without the other reasons named above, be a basis for the selection of a director or nominee. In searching for qualified director candidates to fill vacancies in the Board, the Committee solicits its current Board of Directors for names of potentially qualified candidates. Additionally, the Committee may request that members of the Board pursue their own business contacts for the names of potentially qualified candidates. The Committee would then consider the potential pool of director candidates, select the candidate the Committee believes best meets the then-current needs of the Board, and conduct an investigation of the proposed candidate's background to ensure there is no past history, potential conflict of interest or regulatory issue that would cause the candidate not to be qualified to serve as a director of Eagle. The Committee will consider director candidates recommended by Eagle's stockholders. If a stockholder submits a proposed nominee, the Committee would consider the proposed nominee, along with any other proposed nominees recommended by members of Eagle's Board of Directors, in the same manner in which the Committee would evaluate its nominees for director.
- Conduct director evaluations upon renomination for election every three years.
- Nominate directors to be elected by the shareholders and any directors to be elected by the Board to fill vacancies.
- Review periodically the membership of each committee of the Board and recommend committee assignments to the Board, including rotation, reassignment or removal of any committee member.
- Annual review by the Board Chair and make recommendations to the Committee (Board) with respect to the compensation and benefits of directors (for service on the Board and Board committees), including structure and membership of the Board and Board Committees.
Board Size. Make recommendations to the Board about exercising the Board's authority to determine the number of its members.
Board Self-Evaluation. Conduct an annual evaluation of the performance of the full Board and report its conclusion to the Board. The Committee's report should generally include an assessment of the Board's compliance with the principles set forth in these guidelines and the Code of Ethics Policy, as well as identification of areas in which the Board could improve its performance.
Director Removal. Recommend to the Board the removal of a director where Appropriate.
Director Independence. Recommend to the Board the standards for director independence, in addition to those required by Nasdaq.
Shareholder Communication. Ensure that the Board maintains a process for shareholders to communicate with the Board. Shareholders wishing to communicate with the Board should send any communication to the Secretary, Eagle Bancorp. If an individual director or directors receives communication from shareholders, such communication shall be forwarded to the Secretary. Any communication must state the number of shares beneficially owned by the shareholder making the communication. The Secretary will forward such communication to the Chairman of the Nominating Committee. The Secretary has the authority to discard any communication or take appropriate legal action with any communication that is unduly hostile, threatening, illegal or similarly inappropriate.
Charter. To maintain and update, as appropriate, this Charter, which will be published on Eagle's website.
IV. Authority to Retain Experts
The Committee has the authority to retain, direct and if appropriate, terminate any search firm used to identify candidates for Board membership (or to establish other procedures to develop potential candidates for consideration) as well as any such other experts as it deems necessary in the performance of its duties. As part of this authority, the Committee has the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. In addition, the Committee has the authority, to the extent it deems necessary or appropriate, to ask Eagle to provide support and funding in carrying out its duties.
Adopted by the Board on August 16, 2016
Audit Committee Charter Eagle Bancorp Montana, Inc.
The Audit Committee (the "Committee") is appointed by the Board of Directors (the “Board”) of Eagle Bancorp Montana, Inc. (the “Company” or “Eagle”) and is established in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934. The Committee is a standing committee whose purpose is to assist the Board in fulfilling its oversight responsibilities for the Company’s accounting and the quality and integrity of the Company’s financial reporting process. As a wholly-owned subsidiary of the Company, reference to the Company may also include Opportunity Bank of Montana.
As such, the principal duties and responsibilities of the Committee are:
- Direct responsibility for the appointment, compensation, retention, oversight, and termination of the independent registered public accounting firm.
- Oversight and review of the independent registered public accounting firm’s qualifications and independence;
- Oversight and review of the annual financial reporting process and adequacy and integrity of the Company’s financial information (including corporate accounting, financial reporting practices, and the quality of the financial reports);
- Oversight and review of the Company’s legal and regulatory requirements;
- Oversight and review of the performance of the Company’s internal audit function and the independent accountants and other mandated Audit Committee duties;
- Oversight and review of the system of internal controls and safeguards;
- Review with the independent registered public accounting firm(s), the internal auditor(s) and management, the adequacy of the Company’s internal controls and any material weaknesses, any findings or recommendations from the independent registered public accounts firm, all critical accounting policies and all other material matters relating to the audit procedures;
- Review of related party transactions, legal and regulatory matters material to the financial statements and the Company’s compliance programs;
Maintenance of an open avenue of communication between the Board of Directors, senior management, internal auditors, and the Company’s independent registered public accounting firm and to permit internal auditors and the independent registered public accounting firm to meet the Audit Committee without the presence of management;
- Oversight, review, and approval of audit, audit-related, tax, and all other fees; and
- Oversight, as required by the Sarbanes-Oxley Act of 2002, of policies and procedures for the receipt, retention, and treatment of complaints received regarding accounting, internal accounting controls, or auditing matters, including procedures for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
Committee Membership and Independence
Number: The Committee shall be comprised of no fewer than three (3) members.
Nominations/Approval: The members of the Audit Committee shall be recommended by the Board Chair and approved by the Board or as directed by the Bylaws of the Company. The Board shall designate one member of the Committee as its chairperson.
Removal: Members may be removed by the Board in its discretion with or without cause.
Independence: Each member of the Committee shall be “independent” in accordance with the Nasdaq Marketplace Rules and SEC regulations applicable to Audit Committee members.
Qualifications: In addition, all members of the Committee shall have sufficient financial experience and ability to enable them to read and understand fundamental financial statements, including the Company's balance sheet, statements of income, and statements of cash flows. At least one member shall be an "audit committee financial expert" within the meaning of the rules of the SEC. At least one member shall meet the financial sophistication standards established by the requirements of the Nasdaq Stock Market.
None of the members of the Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three (3) years. No Committee member shall simultaneously serve on the audit committees of more than two (2) other public companies, unless the Board determines that such service would not impair the member's ability to effectively serve on the Committee.
Committee Structure and Operations
The Committee shall meet at least four (4) times each year and at such other times as the Committee or its chair deems necessary to perform the Committee's responsibilities. It will meet following the end of each fiscal quarter of the Company, prior to the release of quarterly or annual earnings, to review the financial results of the Company for the preceding fiscal quarter or the preceding fiscal year, as the case may be. The Committee may meet by telephone or video conference. In addition, the Committee may take action by written consent. All meetings of the Audit Committee shall be governed by the same rules regarding notice, quorum, and voting requirements as are applicable to the full Board. Written minutes shall be kept for all meetings of the Committee and shall be duly reported to the Board of Directors. The Committee will meet in executive sessions with the Company's independent auditors and management, as appropriate.
The Committee may delegate authority to one or more members when appropriate, provided that decisions made pursuant to such delegated authority shall be presented to the full committee at its next scheduled meeting.
In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company and has the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties. The Company shall provide funding, as determined by the Committee, for payment of compensation to the Company's independent auditors and to any advisers the Committee retains.
Committee Authority and Responsibilities
At a minimum, the Committee's duties and responsibilities shall include, but are not limited to, the following:
Review of Financial Statements and Reports
- Review the Company's financial statements, reports, and other financial information, in conjunction with the Company's management and independent auditors, as appropriate. Such review shall include candid discussions of the quality - not merely the acceptability - of the Company’s accounting principles as applied in its financial reporting. Reviews shall occur prior to dissemination of the statement, report, or other document to a third party or the public. Without limitation, the Committee shall review the following:
-The annual financial statements and other material financial content of the Company's Annual Report to Stockholders and/or Annual Reports on Form 10-K, including any certification, report, opinion, attestation, or review rendered by the independent auditors;
-Any quarterly or other interim financial statements and other material financial content of the Company's Quarterly Reports on Form 10-Q, including any certification, report, opinion, or review rendered by the independent auditors;
-Any other material financial information, such as earnings releases or financial information and earnings guidance provided to analysts, lenders, or rating agencies. In lieu of reviewing each such disclosure prior to release or dissemination, the Committee may discuss generally with management the types of information to be disclosed and the types of presentations to be made;
-Any material internal reports prepared by the Company's independent auditors, internal auditors, or management; and
-The annual report of the Committee for inclusion in the Company's annual proxy statement.
- The Chair or another member of the Committee may represent the entire Committee for purposes of reviewing quarterly information and other material financial information, such as earnings releases, to the extent permissible under the listing requirements of the Nasdaq Stock Market and generally accepted auditing standards.
Relationship with Independent Auditors and Internal Auditors
- Directly responsible for the appointment, compensation, retention, and termination of the independent auditors. The independent auditors shall report directly to the Committee. The Committee shall have sole authority to determine the compensation to be paid to the independent auditors for any service. The Committee also shall be responsible for the oversight and evaluation of the work of the independent auditors, including resolution of disagreements between management and the independent auditors;
- Pre-approve all audit and permitted non-audit services provided to the Company by the independent auditors as well as the related fees. The Committee may delegate preapproval authority to a member or members of the Committee or may adopt pre-approval policies and procedures, to the extent permitted by applicable laws. Any pre-approvals made pursuant to delegated authority or pre-approval policies and procedures must be presented to the full Committee at its next meeting;
- Receive a report or report update from the independent auditors, within the time periods prescribed by the rules of the SEC, on:
-All critical accounting policies and practices of the Company;
-All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, including the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the independent auditors; and
-Other material written communications between the independent auditors and management, including differences of opinion, if any, between the independent auditors and management;
- Ensure that it receives a formal written statement from the independent auditors delineating all relationships between the independent auditors and the Company, consistent with the requirements of the Public Company Accounting Oversight Board. The Committee shall engage the independent auditors in a dialogue with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and take appropriate action to oversee the independence of the independent auditors;
- Oversee the hiring of personnel and set clear hiring policies for persons who have been employed by the Company's independent auditors within the past three years.
- Ensure the regular rotation of the audit partners as required by law.
- Oversee the objectives, activities, and staffing of the Company's internal auditors, if any.
Financial Reporting and Auditing Processes
- Oversee the integrity of the Company's financial reporting process;
- Discuss with the independent auditors and management the overall scope and plans for the annual audit:
- Review with the independent auditors and management the adequacy and effectiveness of the Company's internal controls and procedures for financial reporting, including management’s report on the adequacy or effectiveness of internal controls, and the fullness and accuracy of the Company's financial statements. The Committee shall consider the quality of presentation of, among other matters, critical accounting policies, off-balance sheet transactions, and financial measures presented on a basis other than in accordance with generally accepted accounting principles;
Review the quality and appropriateness of the Company's accounting principles and underlying estimates as applied in its financial reporting, including the independent auditors' judgments concerning the foregoing;
- In consultation with the independent auditors and management, review any major changes or improvements to the Company's financial and accounting principles and practices, internal controls and procedures for financial reporting ,and disclosure controls and procedures; and
- As it deems necessary or advisable, discuss with management policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.
Legal and Regulatory Compliance
- Establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters;
- Review and approve all transactions with related persons, as such term is used in Item 404 of Regulation S-K under the Exchange Act, except when it is inappropriate for the Committee to review such transaction due to a conflict of interest. The Committee should consider the facts and circumstances available and deemed relevant including, but not limited to, the risks, costs, and benefits to the Company, the terms of the transaction, the availability of other sources for comparable services or products and, if applicable, the impact on the director's independence. The Committee should approve only those transactions that, in light of the known circumstances, are in or are not inconsistent with the best interests of the Company, as determined in the Committee's sole discretion.
Other Committee Matters
- Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval;
- Annually review its own performance in accordance with the standards established by the Board for committees;
- At least one (1) Committee member, or designee, attends training annually.
Limitation of Audit Committee's Role
While the Committee has the duties and responsibilities set forth in this Charter, management has primary responsibility for the Company's financial statements and the reporting process, including the systems of internal controls, and the Company's independent auditors are responsible for performing an annual audit of the Company's consolidated financial statements in accordance with auditing standards generally accepted in the United States and for expressing an opinion as to their conformity with generally accepted accounting principles.
Submitted for review and approval by the Audit Committee on April 22, 2022.
Submitted for review and approval by the Board on May 19, 2022.
Charter of the Compensation Committee Of the Board of Directors of Eagle Bancorp Montana, Inc.
The Compensation Committee (the "Committee") of the Board of Directors of Eagle Bancorp Montana, Inc. (the "Company") is a standing committee whose purpose is to discharge the Board’s responsibilities relating to the compensation of the Company’s senior executive officers and to consider, recommend, administer and implement the Company’s compensation plans, policies and programs, including incentive-compensation plans and equity-based plans. This Charter defines the role, authority and responsibility of the Committee.
The Committee shall be comprised of no fewer than two members. The members of the Committee shall be appointed by the Board on the recommendation of the Nominating Committee and may be removed by the Board in its discretion with or without cause. The Board shall designate one member of the Committee as its chairperson. The members of the Committee shall comply with the independence and other member qualification requirements of the Nasdaq Stock Market and all legal requirements. Additionally, each member shall be (1) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), and (2) an "outside director" within the meaning of §162(m) of the Internal Revenue Code of 1986 and the regulations promulgated thereunder relating to members of compensation committees.
For purposes of this Charter, the term "senior executive officers" shall refer to those employees of the Company who are identified as "officers" of the Company for purposes of Section 16 of the Exchange Act.
Committee Structure and Operations
The Committee shall meet as often as the Committee or its chair deems necessary to perform the Committee’s responsibilities. The Committee may meet by telephone or video conference and may take action by written consent. All meetings of the Committee shall be governed by the same rules regarding notice, quorum and voting requirements as are applicable to the full Board. Written minutes of the meetings of the Committee shall be duly filed in the Company records. Any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee may attend the meetings of the Committee when asked to do so, but may not be present when the Committee meets to discuss or approve the compensation or performance of such persons, as applicable. The Committee may delegate authority to one or more members when appropriate, provided that decisions made pursuant to such delegated authority shall be presented to the full Committee at its next scheduled meeting.
The Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of senior executive officer compensation and shall have sole authority to approve the consultant’s fees and other retention terms. The Committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors. The Company will provide appropriate funding, as determined by the Committee, for payment to any consultants or other advisors retained by the Committee.
Committee Authority and Responsibilities
The Committee's duties and responsibilities shall include the following:
Senior Executive Officer Compensation
1. Annually review and approve corporate goals and objectives relevant to the Chief Executive Officer’s compensation and evaluate the Chief Executive Officer’s performance in light of those goals and objectives, and determine and approve the Chief Executive Officers’ compensation level based on this evaluation and in accordance with any applicable employment agreement then in effect. In determining the long-term incentive component of the Chief Executive Officers’ compensation, the Committee may consider the Company’s performance and relative stockholder return, the value of similar incentive awards given to chief executive officers at comparable companies, and all equity-based and cash bonuses awarded to the Chief Executive Officer in past years and may consider such other factors as it deems necessary or advisable.
2. Annually review and approve the corporate goals and objectives and the compensation of all other senior executive officers and other key executives, including as provided in the Company’s incentive-compensation plans, non-equity bonus plans and equity-based plans.
3. Approve all annual incentive bonuses (if deemed appropriate) granted each senior executive officer in accordance with (i) the criteria set forth in their respective employment agreements, if any, and bonus plans with the Company and (ii) any other criteria deemed appropriate by the Committee.
4. Review and approve or recommend compensation packages for new senior executive officer hires.
5. Approve all revisions, modifications or amendments to any employment agreement between the Company and a senior executive officer, including but not limited to any proposed change to a senior executive officer’s base salary, employment term or annual incentive bonus criteria.
6. Annually review and recommend to the Board any changes with respect to any existing compensation plans of the Company and annually assess the desirability of proposing, and make recommendations to the Board with respect to, any new compensation plans and any increase in shares reserved for issuance under existing equity-based plans.
Stock Compensation Plan Administration
7. Administer, in accordance with their terms, all equity compensation plans of the Company under which common shares or other equity securities of the Company may be issued to directors, officers or key employees, including but not limited to equity incentive compensation plans, and director stock option plans.
8. Grant options and make awards of shares in accordance with the terms of the Company’s equity compensation plans.
Regulatory and Other Requirements
9. Oversee regulatory compliance with respect to compensation, including structuring compensation programs in a manner that preserves tax deductibility for the purposes of Section 162(m) of the Internal Revenue Code and Section 16 of the Exchange Act, where doing so will further the purposes of the Company’s executive compensation program.
10. Annually review its own performance.
11. Make regular reports to the Board.
12. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
Adopted by the Board on March 2, 2010.