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Code of Conduct and Ethics
Throughout its existence, Republic Bancorp, Inc. and Republic Bank & Trust Company (hereafter "Republic" or "Bank") have exemplified the highest level of professional integrity and ethical standards. Since Republic's reputation rests on the conduct of its directors, officers, and associates, we expect 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, officers and associates (collectively referred to as "Associates"). It sets out standards of conduct for you to follow in dealing with clients, suppliers, and other persons. It does not cover every possible situation involving an Associate's conduct and is not a substitute for the use of good judgment. Honest and ethical conduct, 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 governmental regulatory bodies, and other public communications are required without exception. All Associates must comply with all applicable governmental laws, rules, and regulations and any known violations of this Code should be reported to an 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 Board's Audit Committee.
It is Republic's policy that all Associates perform their duties without regard to race, creed, color, religion, gender, gender and/or sexual orientation, age, national origin, disability, 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, a manager or a 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 your supervisor, a manager and/or a member of the Legal Department. 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 Republic's Code of Conduct, the following terms mean:
Associate: any Republic director, officer, or Associate, and for purposes of this Code of Conduct, temporary Associate, or contractor.
Chief Executive Officer: the Chief Executive Officer, or President, then Vice Chairman, in the absence of a Chief Executive Officer of Republic.
Code: Republic's Code of Conduct and Ethics.
Community Organization: any not-for-profit organization, operated primarily for religious, philanthropic, charitable, educational, fraternal, or other similar purpose.
Company: Republic Bancorp, Inc., Republic Bank & Trust Company and their 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 Associate's spouse, children, parents, stepparents, siblings, in-laws, stepchildren, grandchildren, or grandparents.
Republic: Republic Bancorp, Inc., Republic Bank & Trust Company and their 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. You should always use common sense and good taste in your personal conduct. It is the Company's policy to provide an environment that is free of unlawful harassment of any kind, specifically including that which is gender, age-related, religious, racial, or ethnic in nature.
You are expected to adhere to the Company's Fraternization Policy (as noted in the Employee Handbook). Any associate who believes he/she may have been adversely affected by such a relationship between other associates should bring his/her concerns to the attention of their direct supervisor/manager, Human Resources and/or a member of the Legal Department for investigation and resolution.
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, unsafe 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, events attended on behalf of the Company or in conjunction with client entertainment.
MEMBERSHIP IN COMMUNITY ORGANIZATIONS
We are a community-minded organization and encourage you to support Community Organizations that benefit your community. Your participation should be as a private citizen, and not as a Republic representative, unless specifically requested by your supervisor or other appropriate 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 of 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 and 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 POLICY
You may not enter into any transaction, agreement, employment or venture that substantially conflicts with Republic's best interest. A conflict of interest exists when a person's private interest interferes in any substantial 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 your supervisor, a manager or another member of the Legal Department. 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 Legal Department. 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 both the outside firm and the appropriate Republic person so that safeguards and approvals can be established for the protection of all parties. Generally, an associate should be removed from transactions where a conflict of interest exists or may occur. Any improper transfer of material or disclosures of Confidential Information, even though the Associate may not have personally gained by the action, constitutes unacceptable conduct under this Code.
Warning: It is a violation of our Code of Conduct for Associates to perform master file maintenance on their own accounts or those of Immediate Family members. These changes should be properly documented and performed by an independent Associate.
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 or its clients. 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 supervisor, a manager or to Human Resources. All such reports must ultimately be made to the Human Resources Employee Relations Manager.
Diversion of Company Assets
You may not use or divert any Company assets or services of other Associates for your own personal advantage or benefit. Please note that it is a violation of our Code of Conduct for you to waive Bank fees for yourself or Immediate Family members.
You may not divert from Republic or take for yourself any business opportunities in which Republic may have an interest. This means you cannot refer or direct business that Republic may have an interest in to any other entity.
Misappropriation of Misuse of Assets
You many not misappropriate or misuse Company assets or client assets that are subject to the Company's control as a bank or in its Fiduciary capacity. This includes miss-posting items to favor yourself or any other person/entity. You may not make false entries, misroute checks to delay payments or commit any fraudulent, dishonest or criminal act.
Loan Depository Approvals
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, any Immediate Family members, co-workers or personal friends. Any requests should be routed to your supervisor or a manager.
Incentive and Bonus Compensation
You may not misrepresent to any client or prospective client any service or product offered by Republic, nor sell a service or product offered by Republic that is not in the client or prospective client's best interest to enhance or gain incentive or bonus compensation. You may not submit or misrepresent to Republic any sale or enhancement of a service or product offered by Republic to enhance or gain incentive or bonus compensation that you would otherwise not be eligible for. Misrepresenting any products or services to any client, prospective client, or Republic that would result or possibly result in a payout of any incentive or bonus compensation will lead to disciplinary action up to and including termination of employment.
Further, if you have knowledge of any other Associate(s) misrepresenting or falsifying this type of information, and you fail to bring this to the attention of Internal Audit or Human Resources, you are subject to disciplinary action up to and including termination of employment.
All incentive and bonus compensation plans are periodically audited by Internal Audit to ensure the integrity of the programs. Their findings are reported to the appropriate individuals and departments for review and action where necessary.
All information, knowledge and data received, produced, or developed during your employment with Republic are the sole properties of and proprietary to Republic. This includes business processes, computer programs, methods, client names, information and/or lists, prospective client lists, internal policies and procedures and other proprietary information or data. You may not disclose or use, either during or after your employment with Republic any proprietary information, except as necessary to perform your official duties. In compliance with the Company's Information Security Program we expect Associates to take all reasonable precautions to protect such information from theft or intentional or inadvertent disclosure.
Warning: It is a violation of our Code of Conduct to access private client information for personal reasons, such as asking the client out on a date or snooping on your neighbors, coworkers, friends or family members. Such violation will result in disciplinary action up to and including termination. Client information can only be accessed for legitimate business purposes.
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, whether the client owns a home, or whether the person is a Republic client. The following guidelines apply to Insider or Confidential Information in the possession of Associates:
- You may not disclose or communicate Insider or Confidential Information acquired during the course of your employment 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 is required to be communicated carefully and discreetly at all times under the circumstances. This includes casual conversations with non-Republic Associates where even mentioning that a person is a client or the size of their relationship could be deemed a breach of our responsibility as Republic Associates.
All Associates are expected to adhere to the provisions of the Company's Insider Trading Policy and Information Security Program and refer to them for more information on the handling of Insider Confidential Information.
FRAUD AND CLIENT DOCUMENTATION
Fraud and/or corruption can undermine the viability of the Bank, compromise the delivery of services, and breach the trust we proudly have among our Associates, clients and other stakeholders. Accordingly, fraud will not be tolerated and appropriate disciplinary action, up to and including termination, may be taken against Associates or third parties doing business with the Bank such as agents, representatives, consultants, contractors, suppliers, vendors, subcontractors, and program managers.
Fraud can be broadly defined as an intentional act of deceit to obtain an unjust or illegal advantage. You may not commit any fraudulent, dishonest, or criminal act. Fraud can include many acts, several of which are covered in other sections of this Code, but acts related to client documentation can include (but are not limited to):
- Falsifying records – this includes accounting and audit records, loan applications or documents, phone records, transaction records, deposit slips, ATM and teller balancing, expense reports, and all other records that are part of our day-to-day business.
- Q: A client deposited $10 cash into her account. I mistakenly entered a $100 cash deposit. May I change the deposit ticket for the account at the end of the day for balancing purposes?
- A: No. You must follow the proper procedures for addressing discrepancies – i.e., see "Cash Outages" procedure.
- Q: A borrower forgot to date a disclosure for a mortgage loan. May I add the date so that I do not need to disturb the borrower?
- A: No. If a date is necessary, you must have the Borrower correctly date the document.
- Misrouting checks to delay payments
- You must also follow notary requirements
- Q: A client forgot to have his loan documents notarized. My co-worker told me I should go ahead and notarize them since we know the customer. May I do this?
- A: No. The notarization process requires both you, as the notary, and the signer to be physically present so you can verify the signer's identification and ensure he or she is signing the document voluntarily. You must follow the procedures of your notary license in your state, even if someone tells you to ignore them.
- Forgery – you must not sign anyone else's name other than your own on any bank or client record.
- Q: A client dropped off signed loan documents at the banking center. He missed one signature line on one page, but his wife signed on that page. I know that his intent was to sign the document and it needs to be signed today for the scheduled closing. May I sign his name?
- A: No. The client needs to sign his or her own name.
All Associates have a duty to guard against and report any fraud.
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, or other known or attempted financial criminal activity. There are timing requirements associated with this reporting. These or related activities, if discovered, should be reported immediately to the Bank Secrecy Officer in the Compliance Department in order that the required investigation and reports are completed timely.
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 Legal Department in connection with any proposed new acquisitions, investments or divestitures of businesses or assets, as well as new products or services or any agreements between Republic Bancorp, Inc. and any of its subsidiaries.
Because Republic's business is subject to extensive governmental review, every Associate is responsible for ensuring that the Company's activities, as they relate to their duties, are conducted in a safe and sound manner in compliance with all regulations. You are also responsible for ensuring that your recordkeeping 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 and report the Company's condition. Additionally, it may adversely affect management's ability to comply with regulations and maintain the safety and soundness of the Company's assets.
Republic has implemented methods to safeguard the Company's 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 Company's 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 Company's reporting systems and procedures to ensure that:
- Business transactions are properly authorized and completely and accurately recorded on the Company's books and records in accordance with Generally Accepted Accounting Principles (GAAP) and the established Company financial policy.
- The retention or disposal of Company records shall be in accordance with applicable legal and regulatory requirements.
- Production of full, fair, accurate, and 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 facilitates 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 Company's 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 so long as the information is not publicly known.
Definition: Material Nonpublic Information: It is not possible to define all categories of this 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 Republic's securities. Either positive or negative information may be material. Questions should be directed to the Company's Legal Department.
To ensure compliance with this Policy and applicable federal and state securities laws, the Company strongly recommends that all directors, officers and associates having access to the Company's internal financial statements or other Material Nonpublic Information refrain from conducting transactions involving the purchase or sale of the Company's securities other than during the following period (the "Trading Window"): Trading Window: The period In any fiscal quarter commencing at the close of business two full Trading Days following the date of public disclosure of the financial results for the prior fiscal quarter or year and ending on the last day of the second fiscal month of the fiscal quarter. See the Republic Bancorp insider Trading Policy for more details.
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 ta his or her profit by trading in Republic's 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 Republic's 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 Nonpublic Information, or who are not sure if the information they possess is material, who intend to trade in Republic's securities, should contact Republic's Legal Department before committing to the proposed transaction.
ETHICS AND COMPLIANCE HOTLINE
The Audit Committee of the Board of Directors of Republic 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 laws or regulations, fraud, theft, falsification/destruction of company records, conflicts of interest, violation of the Company's policies or procedures and release of proprietary information. If an Associate believes that such activities have occurred, he/she may contact his/her direct supervisor, a manager 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.