EXHIBIT 14
MainSource Financial Group, inc.
Code of Ethical Conduct
All officers, directors and employees of MainSource Financial Group
(the "Company") are obligated at all times to comply with the laws, rules and
regulations of the United States and of each jurisdiction (local and foreign) in
which the Company does business. This Code of Ethical Conduct (the "Code") has
been adopted by the Company as evidence of the Company's commitment to the
principles of HONESTY, INTEGRITY AND RESPONSIBILITY as a code of behavior for
all employees, officers, directors, affiliates and associates of the Company.
The implementation of this Code is intended to engender the TRUST, RESPECT AND
CONFIDENCE of customers, clients, suppliers, regulators, creditors, stockholders
and the general public. By accepting a position or affiliation with the Company,
each officer, director and employee is charged with the responsibility of
upholding the Company's commitment to ethical corporate behavior and agrees to
comply with this Code.
This Code covers a wide range of business practices and procedures. It
does not purport to summarize all laws, rules and regulations that may be
applicable to the Company and its employees, officers and directors or cover
every issue that may arise, but it sets out basic principles to guide all
employees and directors. This Code is intended to convey the overriding
commitment of the Company that its business and affairs be conducted at the
highest level of honest and appropriate corporate behavior.
The Company's Executive Officers, including the chief executive
officer, the chief financial officer, and others performing similar functions,
and the Company's Board of Directors hold an important and elevated role in
corporate governance. The Company's Executive Officers and the Board of
Directors are charged with both the responsibility and authority to protect,
promote and preserve the interests of all of the stakeholders, including
stockholders, creditors, customers, employees, and suppliers. All Executive
Officers and Directors, as models for all employees of the Company, must behave
in such manner as to deter wrongdoing and to promote honest and ethical conduct
in all aspects of the Company's business and operations.
For purposes of this Code, "Covered Person" means each employee,
officer, Executive Officer and Director of the Company; "Executive Officers"
include the President, Chief Executive Officer, Chief Financial Officer, each
Vice President, each person in an executive position for each subsidiary or
division of the Company, and all other persons occupying similar policy-making
positions: and "Director" means each member of the Board of Directors of the
Company or any of its affiliates or subsidiaries.
HONESTY
Each Covered Person shall exhibit and promote the highest standards of
honest and ethical conduct in his/her professional and personal behavior. The
Board of Directors and the Executive Officers are mandated to publicize and
support this Code within the Company.
The standards for honest and ethical behavior for all Covered Persons
include, but are not limited to, the avoidance of conflicts of interest, the
prohibition on the misuse of corporate opportunities, the prohibition on the
misuse of corporate assets, the preservation of the Company's confidential
information, the requirement to deal fairly with Company customers, suppliers
and competitors, and the prohibition of trading while in possession of inside
information.
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Avoidance of Conflicts of Interest
o A "conflict of interest" exists or may exist whenever a Covered
Person's private interests are adverse to, interfere with, or
influence the objective judgment and actions of the Covered Person (or
appear to do any of the foregoing) with respect to the business
interests of the Company. A conflict situation can arise when a
Covered Person takes actions or has interests that conflict with or
otherwise may make it difficult to perform his or her Company duties
objectively and effectively. Conflicts of interest may also arise when
a Covered Person or an affiliate (including a family member) of such
Covered Person receives improper personal benefits from any Company
action or omission to act which are substantially attributable to such
Covered Person's position with the Company. Examples of potential
conflicts of interest include employment with or substantial equity
holdings in a competitor.
o Conflicts of interest are prohibited as a matter of Company policy. To
the extent that any Covered Person is or becomes aware of a potential
or actual conflict of interest between such Covered Person's interests
and the actions or potential actions of the Company, the Covered
Person shall promptly report such potential or actual conflict of
interest to his/her supervisor with the intended purpose of completing
a report to the Company's Director of Human Resources. Any Covered
Person who becomes aware of a potential or actual conflict of interest
with respect to the interests of another Covered Person is also
directed to make a report. Any report of a potential or actual
conflict of interest may, at the option of the Covered Person making
the report, be made directly to the Corporate CEO or the Director of
Human Resources.
o Kickbacks, bribes, rebates or other forms of illegal consideration are
never acceptable, and must never be either offered or accepted by
anyone acting on behalf of the Company or in connection with the
performance of his or her duties. At the same time, business
entertainment and gifts in a commercial setting intended to create
good will and sound working relationships, and not to gain unfair
advantage with customers or other parties, are acceptable if
reasonable in amount and form. The giving or receipt of
business-related gifts or entertainment, such as customary holiday
gifts, is acceptable as long as the gift is not a cash gift, is
consistent with customary business practices and is nominal in value,
and does not violate any applicable laws or regulations. For the
purposes of this Code, "nominal" should be considered as meaning less
than $100. Covered Persons dealing with government agencies should be
particularly alert to any agency rules limiting or prohibiting gifts
or other favors. Covered Persons should discuss with their supervisor
any gifts or proposed gifts that they are not certain are appropriate.
o Covered Persons may not accept a fiduciary or co-fiduciary appointment
unless he/she is acting on behalf of a family member or has first
received approval from the Corporate CEO. A "fiduciary appointment" is
an appointment as an administrator, executor, guardian, custodian for
a minor, trustee or managing agent. A Covered Person also may not act
as a deputy or co-tenant of a safe deposit box, or act as an agent or
attorney-in-fact (including signor or co-owner) on a customer's
account unless for a family member or if approval is first received
from the Corporate CEO.
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Prohibition on Misuse of Corporate Opportunities
o Each Covered Person is prohibited from (i) appropriating for
himself/herself or any of his/her affiliates or family member's
business opportunities that properly belong to the Company or are
discovered by the Covered Person through the performance of duties on
behalf of the Company, and (ii) using his/her position for personal
gain.
Prohibition on Misuse of Corporate Assets
o All Company assets should be used for the legitimate business purposes
of the Company only, although incidental personal use of Company
equipment may be permissible. However, use of Company assets, time or
property for personal political activities is never permissible.
o Company policy expressly prohibits the creation and maintenance of
secret or unrecorded assets or liabilities. The use of Company funds
(whether inside or outside the United States) for illegal purposes or
for illegal political contributions to candidates, political action
committees or political parties is expressly prohibited.
Preservation of the Company's Confidential Information
o The Company's "Confidential Information" shall mean all proprietary
information belonging to the Company, whether in written or electronic
form, and used by the Company in the conduct of its business,
including, without limitation, data, technology, source code,
know-how, inventions, discoveries, designs, processes, formulations,
models, equipment, algorithms, software programs, documents,
specifications, information concerning research and development work,
trade and business secrets, customer information, supplier lists,
financial records, and information which relates to current, planned
or proposed products, marketing and business plans, forecasts,
projections and analyses, and financial information. Confidential
Information does not include information in the public domain or
generally known in the industry in which the Company operates, unless
such availability has been caused by a violation of this
non-disclosure policy.
o Each Covered Person shall hold all Confidential Information in strict
confidence and shall take such steps to safeguard the Confidential
Information from unauthorized disclosure.
o The Company and its subsidiaries are periodically reviewed by
regulatory examiners. Certain reports made by these agencies are the
property of the agencies and are strictly confidential. Giving
information from those reports to anyone not associated with the
Company is a criminal offense.
o If a Covered Person believes that disclosure of Confidential
Information is required by applicable law or judicial process, such
Covered Person shall first notify and consult with the Company's CEO
prior to any such disclosure.
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Prohibition of Trading on Inside Information
o Pursuant to Federal law and Company policy, no Covered Person shall
purchase or sell any security of the Company while in possession of
material information about the Company, whether positive or negative,
which has not yet been publicly disseminated. The prohibition on the
use of such "inside information" applies to any Covered Person at any
level within the Company and extends to persons not employed by the
Company if they have access to such information including if such
persons are "tipped" by a Covered Person. This same prohibition
applies to trading in the stock of other publicly held companies on
the basis of material, non-public information gained through position
with the Company.
o Material, non-public information is any information that could
reasonably be expected to affect the price of a stock. Anyone
considering buying or selling stock because of inside information they
possess should assume that such information is material. It is also
important to keep in mind that any trade that becomes the subject of
an investigation by the government will be viewed after-the-fact with
the benefit of hindsight. Covered persons who are unsure whether a
potential trade could run afoul of these rules should contact the
Corporate CFO or CEO.
o The laws and regulations governing transactions in Company securities
are extensive and complex. At times, the Board of Directors of the
Company will issue alerts notifying each Covered Person that no
transactions in Company securities may occur during a certain period.
At other times, each Covered Person should consult with the Company's
Chief Financial Officer prior to entering into any transaction
involving Company securities.
Competition and Fair Dealing
o We seek to outperform our competition fairly and honestly, and in
compliance with all applicable laws, including antitrust laws.
Stealing proprietary information, possessing trade secret information
that was obtained without the owner's consent, inducing past or
present employees of other companies to disclose such proprietary,
trade secret or other confidential information, and similar practices,
are prohibited. Covered Persons should endeavor to respect the rights
of and deal fairly with the Company's customers, suppliers,
competitors and employees. No Covered Person should take unfair
advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any
other intentional unfair-dealing practice.
o Covered Persons are expected to fully comply with all applicable
antitrust laws. To that end, Covered Persons should never discuss
business strategy or similar issues with competitors of the Company.
In addition, to avoid even the appearance of an improper agreement or
understanding, communications with competitors should be kept to a
minimum. There should be a legitimate business reason for any such
communication.
INTEGRITY OF COMPANY FINANCIAL RECORDS AND REPORTS
As a public company, the Company is required to make periodic filings
with the Securities and Exchange Commission ("SEC") reporting on the Company's
results of operations and general financial condition. It is the Company's
policy that these reports are filed with
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complete and accurate information and on a timely basis. The Company has
established and maintains sufficient reporting systems and procedures to ensure
such full, fair, accurate, timely and understandable disclosure in filings with
the SEC and in other communications with the Company's stockholders and the
general public.
o It is Company policy that all Company books, records, accounts and
financial statements be maintained in reasonable detail, and that
business transactions be timely, completely and accurately recorded on
the Company's books and records in accordance with applicable legal
and other requirements and the Company's disclosure controls and
procedures and system of internal controls. Financial records should,
in addition, be maintained in accordance with generally accepted
accounting principles and established company financial policy.
o It is against Company policy to evade the Company's system of internal
controls and to perpetuate unrecorded transactions, assets or
liabilities.
o Depending upon their position within the Company, each Covered Person
may be required to provide necessary financial and other information
concerning such Covered Person's areas of responsibility, and each
Covered Person agrees to provide accurate and complete information in
response to such request on a timely basis. Covered Persons should
notify their supervisor or the person to whom the information was
supplied upon learning of any inaccuracy or deficiency in such
previously-supplied information.
o Further, each Covered Person is expected to comply, within the scope
of his or her duties, with the Company's disclosure controls and
procedures implemented by the Company to ensure that material
information relating to the Company is timely recorded, processed,
summarized and reported in accordance with all applicable SEC and
other applicable rules and regulations. In addition, employees should
report to his/her supervisor any information regarding the Company
that he or she believes might be material, but may not be known at
higher levels within the Company. Directors should report such matters
to the Corporate CEO.
o Employees who become aware of any omission, inaccuracy or
falsification regarding Company financial or other business records,
or the information supporting such records, should report the
situation to his/her supervisor, while Directors should report such
matters to the Corporate CEO.
o Furthermore, Covered Persons shall also report any concerns or
complaints regarding questionable accounting or auditing matters of
the Company. Such reports may be made on a confidential, anonymous
basis directly to the Corporation's Audit Committee by following the
process and procedure as put forth in the Employee Handbook.
o The retention or proper disposal of Company records shall be in
accordance with established enterprise financial policies and
applicable legal and regulatory requirements.
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COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS
Obeying the law, both in letter and in spirit, is the foundation on which
the Company's ethical standards are built. All Covered Persons must respect and
obey the laws, rules and regulations applicable to the Company's business and
operations, including those regarding equal opportunity, harassment in the
workplace, political activities, insider trading in securities and all
applicable banking regulations. Violating any of them could subject a Covered
Person or the Company to criminal and/or civil penalties. Although not all
Covered Persons are expected to know the details of all of these laws, rules and
regulations, it is important to know enough to determine when to seek advice
from supervisors, managers or other appropriate personnel.
As appropriate, the Company will hold information and training sessions to
promote compliance with applicable laws, rules and regulations.
While this Code cannot address all laws, rules and regulations applicable
to the Company, some of the most material ones, to the extent not addressed
above, are discussed below.
Criminal Laws
Covered Persons are subject to a number of criminal laws. For example, a
Covered Person may not:
o corruptly accept or solicit anything of value intending to be
influenced or rewarded in connection with the Company's business or in
return for confidential information;
o intentionally fail to make currency transaction reports or other
filings required by the Bank Secrecy Act, or other applicable laws or
regulations;
o knowingly engage in financial transactions involving the proceeds of
an illegal activity. This is referred to as money laundering;
o using Company funds or assets to finance campaigns for political
office;
o making a loan or giving a gift to someone who has the authority to
examine the Company or its affiliates;
o using a computer to gain unauthorized access to customer records; and
o making false statements to government officials.
Equal Opportunity; Discrimination and Harassment
o It is the Company's policy, in compliance with applicable federal,
state and local laws, to provide equal opportunity in all aspects of
employment, and we will not tolerate any illegal discrimination or
harassment of any kind. Decisions regarding employment, training,
compensation and advancement will be made on the basis of
qualification, merit and business needs, regardless of race, religion,
sex, national origin, age, or other protected characteristic. Examples
of impermissible harassment include derogatory comments based on sex,
racial or ethnic characteristics, religion, national origin and
similar characteristics, and unwelcome sexual advances.
WAIVERS OF THE CODE
o Any waivers of this Code for employees must be made in writing to the
Corporate CEO. Any waivers of the Code for Executive Officers and
Directors may be made
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only by the board of directors, and must be promptly disclosed to
stockholders in accordance with applicable SEC and NASDAQ rules and
regulations.
REPORTING ANY VIOLATIONS OF COMPANY POLICY OR ILLEGAL OR UNETHICAL BEHAVIOR
o Covered Persons are required to report violations or suspected
violations of this Code, other Company policies or any applicable law,
regulatory requirement or other rule or regulation applicable to the
Company promptly after becoming aware of such violation or potential
violation. Employees may make reports to either their supervisor or if
they feel more comfortable, to the Company's internal compliance
officer. Directors should report violations or suspected violations to
the Corporate CEO. To the extent possible, the identity of persons
making such reports will be kept secret and their anonymity will be
protected if the circumstances so warrant.
o While reporting a known or suspected violation will not absolve a
Covered Person from the consequences of his or her misconduct, it may
be considered in determining an appropriate disciplinary response. In
addition, failure to report violations of which one is aware is itself
a violation of this Code and could result in disciplinary action as
discussed further below, including possible termination of employment.
o Employees are encouraged to talk to supervisors or other appropriate
personnel if they have questions about this Code or its applicability
or about the appropriateness of observed behavior and when in doubt
about the best course of action in a particular situation. Directors
should consult with the Corporation's CEO on such matters. Covered
Persons are expected to cooperate in internal investigations of
misconduct.
o The Company will not permit any form of retaliation against any person
who, in good faith, reports known or suspected violations of this Code
or any other illegal or unethical behavior, even if such report turns
out to be in error. Any such retaliation is itself a violation of this
Code and will subject the person(s) involved to disciplinary action,
as discussed below.
DISCIPLINARY MEASURES
o Violations of the Code or other policies, or of applicable laws, rules
and regulations, may result in disciplinary measures against the
violator. Such measures, depending on the nature and severity of the
violation, whether the violation was a single or repeated occurrence,
and whether the violation appears to have been intentional or
inadvertent, may include written notices to the individual involved,
censure by the Board, demotion or re-assignment, suspension with or
without pay or benefits and termination of employment. Directors may
be asked to resign from the Board.
o Disciplinary action will also apply to supervisors who, with respect
to those employees reporting to them, know that prohibited conduct is
contemplated by such employees and do nothing to prevent it, or know
that prohibited conduct has been engaged in by such employees and fail
to take appropriate corrective action. Supervisors may also be subject
to disciplinary action for their failure to effectively monitor the
actions of their subordinates.
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o In addition, Covered Persons should keep in mind that violations of
legal and regulatory requirements may carry their own civil and
criminal penalties, including fines and imprisonment.
GENERAL
This Code may be amended by the Board of Directors, subject to the
disclosure requirements under Federal securities laws. The date indicated at the
bottom of this Code of Ethical Conduct indicates the date on which this Code has
been adopted by the Company, and the latest date through which this Code has
been amended.
MainSource Financial Group MainSource Bank
_______________________ Date: _______ _______________________ Date: _______
James L. Saner, Sr. Daryl R. Tressler
President & CEO President & CEO
Regional Bank Capstone Bank
_______________________ Date: _______ _______________________ Date: _______
Michael K. Bauer W. Brent Hoptry
President & CEO President & CEO
First Community bank & trust
_______________________ Date: ______
Albert R. Jackson, III
President & CEO