TRI-COUNTY FINANCIAL CORPORATION
CODE OF ETHICS
FOR
SENIOR EXECUTIVES, FINANCIAL OFFICERS AND DIRECTORS
GENERAL PHILOSOPHY
The honesty, integrity and sound judgment of our senior executives,
financial officers and directors is essential to the reputation and success of
Tri-County Financial Corporation and Community Bank of Tri-County (collectively,
the "Company").
This Code of Ethics governs the actions and working relationships of senior
executives, financial officers and directors of the Company with current and
potential customers, consumers, fellow employees, competitors, government and
self-regulatory organizations, the media, and anyone else with whom the Company
has contact. These relationships are essential to the continued success of the
Company 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 the Company 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 executives, financial officers and directors to
communicate those conflicts to the Company.
- Addresses misuse or misapplication of the Company's property and
corporate opportunities.
- Requires the highest level of confidentiality and fair dealing within
and outside the Company environment.
- Requires reporting of any illegal behavior.
IDENTIFICATION OF SENIOR EXECUTIVES, FINANCIAL OFFICERS AND DIRECTORS
For purposes of this Code of Ethics, the Company's senior executives,
financial officers and directors shall consist of all officers with the title of
President and Executive Vice President as well as the Company's other chief
accounting officers and board of directors.
CONFLICTS OF INTEREST
A "conflict of interest" occurs when your private interest interferes or
appears to interfere in any way with the interests of the Company. 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 the Company. Any position or interest,
financial or otherwise, which could materially conflict with your performance as
a senior executive or financial officer of the Company, or which affects or
could reasonably be expected to affect your independence or judgment concerning
transactions between the Company, its customers, suppliers or competitors or
otherwise reflects negatively on the Company would be considered a conflict of
interest.
CONFIDENTIALITY
Nonpublic information regarding the Company or its businesses, employees,
customers and suppliers is confidential. As a senior executive or financial
officer of the Company, 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 the Company,
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 the Company. You
remain under an obligation to keep all information confidential even if your
employment with the Company 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
the Company facilities or trade secret information, from any work for
the Company, or relating to the Company's business, is considered to
be "work-for-hire" under the United States copyright laws and shall
belong to the Company.
(iii)Proprietary information such as customer lists and customers'
confidential information.
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Public and media communications involving the Company must be made only by
the Company's Chief Executive Officer and President or his designee.
CORPORATE OPPORTUNITIES
Using confidential information about the Company 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
Company 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 the Company; or
(ii) Accept anything of value (other than normal authorized compensation)
from anyone in connection with the business of the Company, either
before or after a transaction is discussed or consummated.
Senior executives, financial officers and directors are prohibited from:
(i) Personally benefiting from opportunities that are discovered through
the use of the property, contacts, information or position of the
Company.
(ii) Accepting employment or engaging in a business (including consulting
or similar arrangements) that may conflict with the performance of
your duties or the Company'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 the Company.
(iv) Acting on behalf of the Company 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). An award in recognition of service and accomplishment may
also be accepted without violating these guidelines so long as the
gift does not exceed $150 from any
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one individual in any calendar year. Any gift in excess of $150 must
be reported to the President and Chief Executive Officer.
(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 the Company 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 the Company's common stock or other
security while in possession of material information concerning the Company that
has not been released to the general public, but which when released may have an
impact on the market price of the Company's 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. Any questions concerning the propriety of participating
in a Company or other company stock or other security transaction should be
directed to the Chief Financial Officer.
EXTENSIONS OF CREDIT
The Company may extend credit to any officer, director, or principal
shareholder or employee of the Company only in compliance with Maryland and
federal law and regulations and the Company's policies with respect thereto, if
any.
OUTSIDE BUSINESS RELATIONSHIPS
Senior executives, financial officers and directors should disclose all new
directorships or potential directorships to the President and Chief Executive
Officer in order to avoid any conflicts of interest. Senior executives and
financial officers of the Company are prohibited from holding outside
employment.
The Company encourages civic, charitable, educational and political
activities as long as they do not interfere with the performance of your duties
at the Company.
FAIR DEALING
Each senior executive, financial officer and director should undertake to
deal fairly with the Company's customers, suppliers, competitors and employees.
Additionally, no one
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should take advantage of another through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other
unfair-dealing practices.
Senior executives, financial officers and directors 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 the
Company. Copies of such agreements should be provided to the human resources
personnel 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 the Company.
Senior executives, financial officers and directors 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 the Company.
PROTECTION AND PROPER USE OF COMPANY PROPERTY
All senior executives, financial officers, directors and employees should
protect the Company's property and assets and ensure their efficient and proper
use. Theft, carelessness and waste can directly impact the Company's
profitability, reputation and success. Permitting the Company property
(including data transmitted or stored electronically and computer resources) to
be damaged, lost, or used in an unauthorized manner is strictly prohibited.
Senior executives, financial officers and directors may not use corporate, bank
or other official stationary for personal purposes.
COMPLIANCE WITH LAWS, RULES AND REGULATIONS
This Code of Ethics is based on the Company's policy that all directors,
officers and employees comply with the law. While the law prescribes a minimum
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 the Company's filings
("Securities Reports") with the Securities and Exchange Commission (the "SEC")
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder (collectively,
the "Securities Laws"), as well as the Company's filings and communications
(collectively, "Regulatory Reports") with federal and Maryland bank regulatory
authorities. It is essential that the Company'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 the Company
and its
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stockholders and to engender public confidence in the information provided by
the Company in its Securities Reports. Similarly, it is essential that the
Company'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 executives, financial officers and directors of the
Company must use their best efforts to ensure that the Company's Securities
Reports and Regulatory Reports and other public communications made by the
Company contain full, fair, accurate, timely and understandable disclosure and
that the Company 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 VIOATIONS OF THIS CODE OF ETHICS
All senior executives, financial officers and directors are expected to
demonstrate the ability to properly manage their personal finances, particularly
the prudent use of credit. The Company recognizes that its customers must have
faith and confidence in the honesty and character of its senior executives,
financial officers and directors. In addition to the importance of maintaining
customer confidence, there are specific laws that outline the action the Company
must take regarding any known, or suspected, crime involving the affairs of the
Company. With respect to bank personnel covered by this policy, the bank will
file a Suspicious Activity Report in the case of any known, or suspected, theft,
embezzlement, check/debit card fraud, kiting, misapplication or other
defalcation involving bank funds.
Fraud is an element of business that can significantly affect the
reputation and success of the Company. The Company requires its senior
executives, financial officers and directors to report directly to the Audit
Committee of the Board of Directors and discuss any known or suspected criminal
activity involving the Company 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 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 Company's
Chief Financial Officer who will report such matters 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 Chief Financial Officer to annually
reaffirm compliance with the Code of Ethics by all senior executives, financial
officers and directors, and to obtain a signed certificate that each senior
executive, financial officer and director has read and understands the
guidelines and will comply with them. Senior executives, financial officers and
directors will be required to sign a receipt form indicating they have read this
Code of Ethics and will comply with its provisions.
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Senior executives, financial officers and directors of the Company 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.
The Company will provide to any person without charge, upon request, a copy
of this Code of Ethics. Such request should be made, in writing, to: Chief
Financial Officer, Tri-County Financial Corporation, 3035 Leonardtown Road,
Waldorf, Maryland 20601.
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ACKNOWLEDGEMENT
I have received, read and understand the "Tri-County Financial Corporation Code
of Ethics for senior executives, financial officers and directors".
I agree to adhere to its terms, requirements and specified procedures.
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Signature Witness
Date:
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