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Code of Conduct and Ethics
Throughout its existence, Republic has exemplified the highest level of professional integrity and ethical standards. Since Republics reputation rests on the conduct of its directors, officers, and Associates, we expect the maintenance of the highest integrity and ethical standards in the conduct of all business and personal activities.
This Code provides general guidelines of ethical behavior for all directors, advisory directors, officers and Associates (collectively referred to as Associates). It set out standards of conduct for you to follow in dealing with customers, suppliers, and other persons. It does not cover every possible situation involving an Associates conduct and is not a substitute for the use of good judgment. Honest and ethical conducts, including the ethical handling of actual or apparent conflicts of interest, is required at all times. Avoidance of conflicts of interest is required, including disclosure to an appropriate person or persons of any material transaction or relationship that reasonably could be expected to give rise to any such a conflict.
Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to the SEC and other public communications are required without exception. All directors, officers, and Associates must comply with all applicable governmental laws, rules, and regulations and any known violations of this Code should be reported to the appropriate person timely. The Board of Directors is the only body authorized to waive compliance with this Code as it relates to any executive officer or director of the Company. With respect to these individuals, the Board of Directors also has the authority to investigate (or supervise the investigation of) alleged violations of this Code and to determine the appropriate consequences for violations by such individuals, or to approve a waiver. Enforcement of the Code, including waivers or exceptions, as to others not specifically set forth above shall be the responsibility of the Audit Committee.
It is Republics policy that all Associates perform their duties without regard to race, creed, color, religion, sex, sexual orientation, age, national origin, handicap, or veteran status. When associating with any fellow Associate, client, supplier or any other person, the Associate Handbook should be consulted regarding these matters as well as this Code.
You are ultimately responsible for complying with the letter and spirit of this Code. Any violation of this Code is an extremely serious matter, and may subject you to disciplinary action. If you have any questions regarding the propriety of any conduct, you should confidentially discuss the situation with your supervisor or an appropriate representative of the Legal or Human Resources Departments.
Any possible violations of laws or regulations or other serious matters should be brought to the attention of the appropriate managing officer and the General Counsel. If the matter remains unresolved, Federal law protects your right to provide information to any Federal Banking agency or the Kentucky Attorney General regarding a possible violation of any law or regulation; or gross mismanagement, gross waste of funds, abuse of authority, or an act resulting in a substantial and specific danger to the public health or safety by an Associate.
As used in Republics Code of Conduct, the following terms mean:
Associate: any Republic director, advisory director, officer, or associate.
Chief Executive Officer: the chief executive officer, or president in the absence of a chief executive officer of Republic.
Code: Republics Code of Conduct.
Community Organization: any not-for-profit organizations, operated primarily for religious, philanthropic, charitable, educational, fraternal, or other similar purpose.
Company: Republic Bancorp, Inc. and its subsidiaries, whether or not wholly owned.
Corporate Assets: any personal property, equipment, machinery, furniture, fixtures or other property owned by or belonging to Republic.
Fiduciary: includes a trustee under any trust, executor, administrator, independent or supervised personal representative, guardian, conservator, receiver, trustee in Bankruptcy or any other person acting in a fiduciary capacity for any person, trust or estate.
Immediate Family: includes an Associates spouse, children, parents, stepparents, siblings, in-laws, stepchildren, grandchildren, or grandparents.
Republic: Republic Bancorp, Inc. and its subsidiaries, whether or not wholly owned.
Your personal conduct reflects on the character and integrity of Republic. We expect you to conduct your personal affairs honorably, and avoid discrediting yourself and Republic. Our directors, officers, and Associates should always use common sense and good taste in their personal conduct. It is the Companys policy to provide an environment that is free of unlawful harassment of any kind, specifically including that, which is sexual, age-related, religious, racial, or ethnic in nature.
HEALTH AND SAFETY
The Company strives to provide all persons with a safe and healthy work environment as well as a safe and healthy environment for our clients and visitors. All Associates have the responsibility for maintaining safe and healthy conditions at all facilities and shall follow all safety and health rules and practices, including the reporting of accidents, injuries, unsafe equipment, conditions or unsafe practices. Inappropriate or illegal use of controlled substances or alcohol, selling, manufacturing, distributing, possessing, using or being under the influence of illegal drugs or alcohol while on Company property, attending business related activities, while on duty, while operating a vehicle on Company business, or operating a vehicle owned or leased by the Company is absolutely prohibited. There is an exception for modest consumption of alcohol only when served by the Company at Company events or in conjunction with client entertainment.
MEMBERSHIP IN COMMUNITY ORGANIZATIONS
We are a community-minded organization, and encourage you to support organizations that benefit your community. Your participation should be as a private citizen, and not as a Republic representative, unless specifically requested by your managing officer or a Republic senior officer.
We want our Associates to take an interest in government and keep themselves informed about political issues and candidates. You are encouraged to take an active role in fostering better government. These guidelines may help you comply with the rules involving participation in political activities.
You should make it clear that you are acting as a private citizen and not a Republic representative when you participate in political activities. You should not participate in political activities on corporate time or use corporate assets or facilities. Under no condition is any Associate permitted to lobby on behalf of the Company without the prior approval of the Chief Executive Officer.
You may not, directly or indirectly, give or promise any gift or gratuity to any governmental officer or employee for the purpose of influencing any government decision about Republic or our activities. Our Associates may not, directly or indirectly, give or promise any gift or gratuity to any other person for the purpose receiving favorable business treatment.
You may not promise or make, directly or indirectly, any payments in money, products or services to any foreign official in exchange for favorable business treatment or to influence governmental decisions. Such activity could violate the Foreign Corrupt Practices Act or other applicable statues or regulations.
The U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employees of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy, but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. Consult with the Legal Department for guidance in this area.
CONFLICTS OF INTEREST
You may not enter into any transaction, agreement, employment or venture that substantially conflicts with Republics best interest. A conflict of interest exists when a persons private interest interferes in any way with the interests of Republic. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with senior management or the Companys General Counsel. Any Associate who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, officer, manager, Human Resources, or the General Counsel. No presumption of a violation is created by the mere existence of a relationship with outside firms. However, if an Associate has any influence on transactions such as purchases, contracts, or leases, it is imperative that it be disclosed to the appropriate person so that safeguards and approvals can be established for the protection of all parties. Any improper transfer of material or disclosures of information, even though the Associate may not have personally gained by the action, constitutes unacceptable conduct under this Code.
You and members of your immediate family may not solicit or accept any gift or anything of value, whether for yourself or for a third party, from any person in exchange for specific transactions with Republic or confidential information about Republic. This applies to gifts received before or after a transaction is discussed or completed. You may accept unsolicited gifts of nominal value ($100 or less), or customary hospitality from persons doing or seeking to do business with Republic, when it is clear that no attempt is being made to reward you in connection with any business or transaction of Republic. If you or your immediate family are offered or receive anything of value in violation of this Code, you must disclose that fact in writing to your managing officer.
Diversion of Corporate Assets
You may not use or divert any corporate assets or services of other Associates for your own personal advantage or benefit.
You may not divert from Republic any business opportunities in which Republic may have an interest.
Misappropriation or Misuse of Assets
You many not misappropriate or misuse corporate assets or customer assets in a fiduciary capacity. This includes mis-posting items to favor yourself or another. You may not make false entries, misroute checks to delay payments or commit any fraudulent, dishonest or criminal act.
You may not approve or facilitate the processing or approval of loan applications or overdrafts, or waive or refund overdraft fees or other fees for yourself or family members.
All information, knowledge and data received, produced, or developed during your association with Republic are the sole properties of and proprietary to Republic. This includes business processes, computer programs, methods, customer lists, prospect lists, internal procedures and other proprietary information or data. You may not disclose or use, either during or after your association with Republic any proprietary information, except as necessary to perform your official duties while employed by Republic. We expect Associates to take all reasonable precautions to protect such information from theft or intentional or inadvertent disclosure.
INSIDER AND CONFIDENTIAL INFORMATION
It is important to preserve the confidentiality of Insider and Confidential Information. Insider Information includes non-public or proprietary Company information, concerning the business and affairs of Republic and our suppliers and clients. If you obtain inside information about Republic, its clients or suppliers during the course of your employment, you must treat the information as privileged and confidential. Confidential Information includes, but is not limited to, clients names; social security numbers; dates of birth; addresses; number of months at address; phone numbers; financial information as to accounts or loans with Republic or other accounts or loans; bankruptcy; employer names and phone numbers; number of months on the job; or whether the client owns a home. The following guidelines apply to Insider or Confidential Information obtained by Associates.
You many not disclose or communicate Insider or Confidential Information acquired during the course of your association with Republic to anyone else, including members of your family, friends, associates or other Republic Associates, unless those persons need to know the information in order to perform their official responsibilities. Under no circumstances may Insider or Confidential Information be used for personal gain or advantage by you and your family members, friends or acquaintances. Insider or Confidential Information should be disclosed on a need to know basis only. The communication of Insider or Confidential Information should involve the fewest number of Associates who need to know the information to carry out their official duties. Insider or Confidential Information should be communicated carefully and discreetly at all times under the circumstances. All Associates are expected to adhere to the provisions of the Companys Insider Trading Policy and refer to it for more information on the handling of Insider Information.
SUSPICIOUS ACTIVITY REPORTING
The Company is required to file suspicious activity reports with government authorities regarding suspected insider trading, fraud, misappropriation of funds, money laundering, etc. There are timing consequences associated with this reporting. These or related activities, if discovered, should be reported immediately to the General Counsel in order that the required reports are timely filed.
FINANCIAL HOLDING COMPANY RESTRICTIONS
The U.S. Bank Holding Company Act and other banking laws impose various requirements and restrictions on the activities of bank holding companies and financial holding companies and their subsidiaries. To ensure compliance you should consult with the General Counsel in connection with any proposed new acquisitions, investment or the divestiture of businesses or assets, as well as new products or services.
Because Republics business is subject to extensive governmental review, every Associate is responsible for ensuring that the Companys activities, as they relate to your duties, are conducted in a safe and sound manner in compliance with all regulations. You are also responsible for ensuring that your record-keeping and reports are reliable, accurate, and timely.
A lack of proper internal controls would make it difficult for management to make appropriate decisions and accurately assess the Companys condition. Additionally, it may adversely affect managements ability to comply with regulations and maintain the safety and soundness of the Companys assets.
Republic has implemented methods to safeguard the Companys assets and has provided a system for establishing, amending, and communicating approved policies and procedures. These policies and procedures contain internal controls that are critical to the continued success of the Company. As an Associate, you should familiarize yourself with the Companys policies and procedures, maintain proper segregation of duties as required, and diligently follow all approved policies and procedures in your functional area of responsibility.
Financial and accounting officers and managers, including the principal executive officer, hold an important and higher responsibility for corporate governance. These persons are vested with both the responsibility and the authority to protect, balance, and preserve the interest of all Company stakeholders. They are expected to exhibit and promote the highest standards of honest and ethical conduct through the establishment and application of policies and procedures that:
- Encourage professional integrity in all aspects of the Company, eliminating any barriers to responsible behavior such as fear of reprisal.
- Prohibit and eliminate the occurrence of conflicts between what is in the best interest of the Company and what could result in a material personal gain for any Associate.
- Provide a mechanism for members of the finance or accounting departments to inform management of deviations in practice from any policy or procedure.
Financial and accounting officers and managers, and the principal executive officer will establish and manage the Companys reporting systems and procedures to ensure that:
- Business transactions are properly authorized and completely and accurately recorded on the Companys books and records in accordance with Generally Accepted Accounting Principles (GAAP) and established Company financial policy.
- The retention or disposal of Company records shall be in accordance with applicable legal and regulatory requirements.
- Produce full, fair and accurate, timely, disclosure in reports and documents filed with or submitted to any regulatory agency. Periodic financial communications and reports will be delivered in a manner that facilitate a high degree of clarity of content and meaning so that any typical user can reasonably determine their significance and consequence.
- No actions are taken to fraudulently influence, coerce, or mislead the Companys independent auditors for the purpose of rendering the financial statements false or misleading.
TRADING IN REPUBLIC STOCK
Restriction: The trading of Republic stock based on material nonpublic information is prohibited under SEC rules. Nonpublic information relating to Republic is the property of Republic and the unauthorized disclosure of such information is prohibited.
Coverage: The prohibition covers officers, directors, shareholders, and all other employees of, or consultants or contractors to Republic, as well as family members of such persons, and others, where such persons have or may have, regardless how obtained, access to material nonpublic information.
Any person who possesses material nonpublic information regarding the Company is an Insider for so long as the information is not publicly known.
Definition: Material Nonpublic Information: It is not possible to define all categories of information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of Republics securities. Either positive or negative information may be material.
Liability for Insider Trading: Insiders may be subject to disgorgement of profits (or losses avoided) (trebled in some cases), penalties of up to $1,000,000 and up to ten years in jail.
Tipping: No insider shall disclose (tip) Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in Republics securities, nor on the basis of Material Nonpublic Information as to trading in Republics securities.
Liability for Tipping: Insiders may also be liable for improper transactions by any person (commonly referred to as a tippee) to whom they have disclosed nonpublic information regarding Republic or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in Republics securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading.
All Associates who may have access to material inside information, or who are not sure if the information they possess is material, who intend to trade in Republics securities, should contact Republics General Counsel before committing to the proposed transaction.
ETHICS AND COMPLIANCE HOTLINE
The Audit Committee of the Board of Directors of Republic Bancorp has established an Ethics and Compliance Hotline. The purpose of the hotline is to enable Associates to confidentially and anonymously report activities that could negatively impact our Company. These activities include, but are not limited to, violations of governmental regulations, fraud, theft, falsification/destruction of company records, conflicts of interest and release of proprietary information. If an Associate believes that such activities have occurred, he/she may contact his/her direct supervisor or the Ethics and Compliance Hotline at 1-877-888-0002. The Chairman of the Audit Committee has been designated as the independent recipient of information gathered through the hotline. The Chairman will direct the investigation and resolution of the activities. The Audit Committee Chairman will report his/her findings to the Audit Committee and the Board of Directors.