CENTRAL BANCORP, INC.
CODE OF ETHICS
FOR
SENIOR EXECUTIVE AND FINANCIAL OFFICERS
GENERAL PHILOSOPHY
The honesty, integrity and sound judgment of our senior executive and
financial officers is essential to Central Bancorp's reputation and success.
This Code of Ethics governs the actions and working relationships of senior
executive and financial officers of Central Bancorp, Inc. and its subsidiaries
and affiliates (collectively, "Central Bancorp") with current and potential
customers, consumers, fellow employees, competitors, government and
self-regulatory organizations, the media, and anyone else with whom Central
Bancorp has contact. These relationships are essential to the continued success
of Central Bancorp as a financial services provider.
This Code of Ethics:
- Requires the highest standards for honest and ethical conduct,
including proper and ethical procedures for dealing with actual or
apparent conflicts of interest between personal and professional
relationships.
- Requires full, fair, accurate, timely and understandable disclosure in
the periodic reports required to be filed by Central Bancorp with
governmental and regulatory agencies.
- Requires compliance with applicable laws, rules and regulations.
- Addresses potential or apparent conflicts of interest and provides
guidance for senior executive and financial officers to communicate
those conflicts to Central Bancorp.
- Addresses misuse or misapplication of Central Bancorp property and
corporate opportunities.
- Requires the highest level of confidentiality and fair dealing within
and outside the Central Bancorp environment.
- Requires reporting of any illegal behavior.
IDENTIFICATION OF SENIOR EXECUTIVE AND FINANCIAL OFFICERS
For purposes of this Code of Ethics, Central Bancorp's senior executive and
financial officers shall consist of all officers with the title of Senior Vice
President or higher, as well as Central Bank's Vice President and Controller.
CONFLICTS OF INTEREST
A "conflict of interest" occurs when your private interest interferes or
appears to interfere in any way with the interests of Central Bancorp. You are
expected to avoid all situations that might lead to a real or apparent material
conflict between your self-interest and your duties and responsibilities as a
senior executive or financial officer of Central Bancorp. Any position or
interest, financial or otherwise, which could materially conflict with your
performance as a senior executive or financial officer of Central Bancorp, or
which affects or could reasonably be expected to affect your independence or
judgment concerning transactions between Central Bancorp, its customers,
suppliers or competitors or otherwise reflects negatively on Central Bancorp
would be considered a conflict of interest.
CONFIDENTIALITY
Nonpublic information regarding Central Bancorp or its businesses,
employees, customers and suppliers is confidential. As a Central Bancorp senior
executive or financial officer, you are trusted with confidential information.
You are only to use such confidential information for the business purpose
intended. You are not to share confidential information with anyone outside of
Central Bancorp, including family and friends, or with other employees who do
not need the information to carry out their duties. You may be required to sign
a confidentiality agreement in the course of your employment at Central Bancorp.
You remain under an obligation to keep all information confidential even if your
employment with Central Bancorp ends.
The following is a non-exclusive list of confidential information:
(i) Trade secrets, which include any business or technical information,
such as formula, program, method, technique, compilation or
information that is valuable because it is not generally known.
(ii) All rights to any invention or process developed by an employee using
Central Bancorp facilities or trade secret information, from any work
for Central Bancorp, or relating to Central Bancorp's business, is
considered to be "work-for-hire" under the United States copyright
laws and shall belong to Central Bancorp.
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(iii)Proprietary information such as customer lists and customers'
confidential information.
Public and media communications involving Central Bancorp must be made only
by Central Bancorp's Chief Executive Officer or his designee.
CORPORATE OPPORTUNITIES
Using confidential information about Central Bancorp or its businesses,
directors, officers, employees, customers, consumers or suppliers for personal
benefit or disclosing such information to others outside your normal duties is
prohibited.
Title 18 U.S. Code, Section 215, makes it a criminal offense for any
Central Bancorp employee to corruptly:
(i) solicit for himself or herself or for a third party anything of value
from anyone in return for any business, service or confidential
information of Central Bancorp ; or
(ii) accept anything of value (other than normal authorized compensation)
from anyone in connection with the business of Central Bancorp, either
before or after a transaction is discussed or consummated.
Senior executive and financial officers are prohibited from:
(i) Personally benefiting from opportunities that are discovered through
the use of Central Bancorp property, contacts, information or
position.
(ii) Accepting employment or engaging in a business (including consulting
or similar arrangements) that may conflict with the performance of
your duties or Central Bancorp's interest.
(iii)Soliciting, demanding, accepting or agreeing to accept anything of
value from any person in conjunction with the performance of your
employment or duties at Central Bancorp.
(iv) Acting on behalf of Central Bancorp in any transaction in which you or
your immediate family has a significant direct or indirect financial
or other interest.
There are certain situations in which you may accept a personal benefit
from someone with whom you transact business such as:
(i) Accepting a gift in recognition of a commonly recognized event or
occasion (such as a promotion, new job, wedding, retirement or
holiday).
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An award in recognition of service and accomplishment may also be
accepted without violating these guidelines so long as the gift does
not exceed $100 from any one individual in any calendar year.
(ii) Accepting something of value if the benefit is available to the
general public under the same conditions on which it is available to
you.
(iii)Accepting meals, refreshments, travel arrangements and accommodations
and entertainment of reasonable value in the course of a meeting or
other occasion to conduct business or foster business relations if the
expense would be reimbursed by Central Bancorp as a business expense
if the other party did not pay for it.
INSIDER TRADING
It is both unethical and illegal to buy, sell, trade or otherwise
participate in transactions involving Central Bancorp common stock or other
security while in possession of material information concerning Central Bancorp
that has not been released to the general public, but which when released may
have an impact on the market price of the Central Bancorp common stock or other
equity security. It is also unethical and illegal to buy, sell, trade or
otherwise participate in transactions involving the common stock or other
security of any other company while in possession of similar non-public material
information concerning such company. Senior executive and financial officers are
advised that they are required to comply with the Central Bancorp, Inc. Insider
Trading Policy and the Central Bancorp, Inc. Special Trading Procedures for
Directors, Officers and Certain Employees with Access to Sensitive Information.
Any questions concerning the propriety of participating in a Central Bancorp or
other company stock or other security transaction should be directed to the
Chief Financial Officer at (617) 629-4244. Copies of the Insider Trading Policy
and the Special Trading Procedures are available from Central Bancorp's Chief
Financial Officer.
EXTENSIONS OF CREDIT
Central Bancorp's subsidiary bank may extend credit to any officer,
director, or principal shareholder or employee of Central Bancorp only in
compliance with Massachusetts and federal law and regulations and Central Bank's
policy on Loans to Principal Shareholders, Directors, Officers and Employees
(the "Loan Policy"). A copy of the Loan Policy is available from Central
Bancorp's Chief Financial Officer.
OUTSIDE BUSINESS RELATIONSHIPS
Senior executive and financial officers should disclose all new
directorships or potential directorships to the Chairman of the Board of
Directors in order to avoid any
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conflicts of interest. Senior executive and financial officers of Central
Bancorp are prohibited from holding outside employment.
Central Bancorp encourages civic, charitable, educational and political
activities as long as they do not interfere with the performance of your duties
at Central Bancorp.
FAIR DEALING
Each senior executive and financial officer should undertake to deal fairly
with Central Bancorp's customers, suppliers, competitors and employees.
Additionally, no one should take advantage of another through manipulation,
concealment, abuse of privileged information, misrepresentation of material
facts, or any other unfair-dealing practices.
Senior executive and financial officers must disclose prior to or at their
time of hire the existence of any employment agreement, non-compete or
non-solicitation agreement, confidentiality agreement or similar agreement with
a former employer that would in any way restrict or prohibit the performance of
any duties or responsibilities of their positions with Central Bancorp. Copies
of such agreements should be provided to the Vice President of Human Resources
to permit evaluation of the agreement in light of the employee's position. In no
event shall an employee use any trade secrets, proprietary information or other
similar property, acquired in the course of his or her employment with another
employer, in the performance if his or her duties for or on behalf of Central
Bancorp.
Senior executive and financial officers should not directly or indirectly
accept bequests under a will or trust if such bequests have been made to them
because of their employment with Central Bancorp.
PROTECTION AND PROPER USE OF CENTRAL BANCORP PROPERTY
All senior executive and financial officers and employees should protect
Central Bancorp's property and assets and ensure their efficient and proper use.
Theft, carelessness and waste can directly impact Central Bancorp's
profitability, reputation and success. Permitting Central Bancorp property
(including data transmitted or stored electronically and computer resources) to
be damaged, lost, or used in an unauthorized manner is strictly prohibited.
Senior executive and financial officers may not use corporate, bank or other
official stationery for personal purposes.
COMPLIANCE WITH LAWS, RULES AND REGULATIONS
This Code of Ethics is based on Central Bancorp's policy that all
directors, officers and employees comply with the law. While the law prescribes
a minimum
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standard of conduct, this Code of Ethics requires conduct that often exceeds the
legal standard.
PREPARATION OF PERIODIC REPORTS FILED WITH GOVERNMENTAL AND REGULATORY AGENCIES
Particular care is required in the preparation of Central Bancorp's filings
("Securities Reports") with the Securities and Exchange Commission ("SEC")
pursuant the Securities Act of 1933, as amended and the Securities Exchange Act
of 1934, as amended and the rules and regulations of the SEC thereunder
(collectively, the "Securities Laws"), as well as Central Bancorp's filings and
communications (collectively, "Regulatory Reports") with federal and
Massachusetts bank regulatory authorities. It is essential that Central
Bancorp's Securities Reports contain full, fair, accurate, timely and
understandable disclosure and otherwise comply with the letter and spirit of the
Securities Laws for the protection of Central Bancorp and its stockholders and
to engender public confidence in the information provided by Central Bancorp in
its Securities Reports. Similarly, it is essential that Central Bancorp's
Regulatory Reports contain full, fair, accurate, timely and understandable
disclosure and otherwise comply with the letter and spirit of applicable federal
and state banking laws and regulations ("Banking Laws"). Accordingly, the senior
executive and financial officers of Central Bancorp must use their best efforts
to ensure that Central Bancorp's Securities Reports and Regulatory Reports and
other public communications made by Central Bancorp contain full, fair,
accurate, timely and understandable disclosure and that Central Bancorp at all
times complies in all material respects with the letter and spirit of the
Securities Laws and the Banking Laws.
REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOR AND VIOLATIONS OF THIS CODE OF ETHICS
All senior executive and financial officers are expected to demonstrate the
ability to properly manage their personal finances, particularly the prudent use
of credit. Central Bancorp recognizes that its customers must have faith and
confidence in the honesty and character of its senior executive and financial
officers. In addition to the importance of maintaining customer confidence,
there are specific laws that outline the actions Central Bancorp must take
regarding any known, or suspected, crime involving the affairs of Central
Bancorp. With regard to financial affairs, a bank must make a criminal referral
in the case of any known, or suspected, theft, embezzlement, check/debit card
fraud, kiting, misapplication or other defalcation involving bank funds or bank
personnel in any amount.
Fraud is an element of business that can significantly affect the
reputation and success of Central Bancorp. Central Bancorp requires its senior
executive and financial officers to talk to the Vice President of Human
Resources, reporting directly to the Audit Committee of the Board of Directors,
to report and discuss any known or suspected
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criminal activity involving Central Bancorp or its employees. If, during the
course of employment, you become aware of any suspicious activity or behavior
including concerns regarding questionable accounting or auditing matters, you
must report violations of laws, rules, regulations or this Code of Ethics to the
Vice President of Human Resources, reporting directly to the Audit Committee of
the Board of Directors. Reporting the activity will not subject you to
discipline absent a knowingly false report.
ADMINISTRATION AND WAIVER OF CODE OF ETHICS
This Code of Ethics shall be administered and monitored by the Central
Bancorp Vice President of Human Resources, reporting directly to the Audit
Committee of the Board of Directors. Any questions and further information on
this Code of Ethics should be directed to this individual.
It is also the responsibility of the Vice President of Human Resources to
annually reaffirm compliance with this Code of Ethics by all senior executive
and financial officers, and to obtain a signed certificate that each senior
executive and financial officer has read and understands the guidelines and will
comply with them. Senior executive and financial officers will be required to
sign a receipt form indicating they have read this Code of Ethics and will
comply with its provisions.
Senior executive and financial officers of Central Bancorp are expected to
follow this Code of Ethics at all times. Generally, there should be no waivers
to this Code of Ethics. However, in rare circumstances conflicts may arise that
necessitate waivers. Waivers will be determined on a case-by-case basis by the
Audit Committee of the Board of Directors. The Audit Committee of the Board of
Directors shall have the sole and absolute discretionary authority to approve
any deviation or waiver from this Code of Ethics. Any waiver and the grounds for
such waiver by directors or executive officers shall be promptly disclosed to
stockholders in a Current Report on Form 8-K.
Known or suspected violations of this Code of Ethics will be investigated
and may result in disciplinary action up to and including immediate termination
of employment.
Central Bancorp will provide to any person without charge, upon request, a
copy of this Code of Ethics. Such request should be made, in writing, to:
Corporate Secretary, Central Bancorp, Inc., 399 Highland Avenue, Somerville, MA
02144.
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