Covered Persons must also safeguard the Corporation’s proprietary information, including,without limitation, trademarks, patents, trade secrets, copyrights, customer lists, customerinformation, reports, studies, records, data, computer software, and other non-public informationabout the Corporation and its business, relationships, customers, and prospective customers.Proprietary information is entrusted to Covered Persons as representatives of the Corporation.Covered Persons may not use proprietary information other than in connection with Corporationbusiness. All proprietary information of the Corporation is the Corporation’s property and CoveredPersons may not use or disclose such information to any third party absent express writtenauthorization from the Corporation. A Covered Person’s obligation to safeguard proprietaryinformation continues to apply after his or her employment or other service with the Corporationhas ended.          Employees must also comply with all confidentiality and other relevant sections of theEmployee Handbook.     **III. ENSURING INTEGRITY OF RECORDS**          Covered Persons must ensure that all records created or maintained in the ordinary course ofbusiness are accurate, complete, and maintained with reliability and integrity. This includes allaccounting and audit records, loan documents, transaction records, time records, phone records,electronic records, and all other records that are generated and maintained in the ordinary courseof business. All documents requiring notarization must be in full compliance with notaryrequirements. All records must accurately reflect transactions in a timely manner. Errors must becorrected promptly. Covered Persons must not falsify or otherwise cause records to be inaccurate.     **IV. INTERNAL CONTROL OVER ASSETS**          Covered Persons must comply with all Corporation policies and procedures established for thesafeguarding of Corporation assets and proper reporting and disclosure of financial information. Ata minimum, Covered Persons must adhere to the following standards: **A.** No undisclosed or unrecorded asset is to be established for any purpose;  **B.** No false entry is to be made in the books of the Corporation for any reason,and no entry is to be used for any purpose other than the purpose described in thesupporting documents;  **C.** No payment is to be approved or made with the intention that any part of itis to be used for any purpose other than the purpose described in the supportingdocuments; and  **D.** Any Covered Person who knows of any unrecorded assets of the Corporation orany prohibited act described in this Section IV must*Page 2 of 12*
 

 
promptly report it to the Chief Executive Officer or Chief Financial Officer.     **V. CANDOR IN DEALING WITH AUDITORS, REGULATORS, AND LEGAL COUNSEL**          Covered Persons must respond completely, honestly, and candidly in communications with theCorporation’s auditors, regulators, and legal counsel. Incomplete or false communications with theCorporation’s auditors, regulators, or legal counsel are strictly prohibited.     **VI. ANTI-BRIBERY**          Covered Persons must observe standard loan procedures in all transactions, including loancommittee review.          No Covered Person may solicit for himself or herself or for a third party other than theCorporation itself, anything of value from anyone in return for any business, service, orconfidential information of the Corporation.          No Covered Person may accept anything of value (other than bona fide salaries, wages, fees orother compensation paid, or expenses paid or reimbursed, in the usual course of business of theCorporation) from anyone in connection with the business of the Corporation either before or aftera transaction is discussed or consummated. Any Covered Person who is offered or receives somethingof value from anyone beyond what is authorized in these guidelines must disclose this fact inwriting to the Donald L. Denney, President and CEO, Andrew J. Van Doren, Vice President and GeneralCounsel, or Stephen Ross, Chairman of the Board.          Exceptions to the above:          Covered Persons may accept small gifts or other items of value from customers, vendors, orthose attempting to become vendors of the Corporation as long as they are properly disclosed andthe dollar value is considered nominal. Gifts valued up to $50 may be accepted without priorapproval. Gifts to Directors and to officers who are Vice President (“Officers”) and aboveestimated to be of a value between $50 and $200 may be accepted with disclosure to the ChiefExecutive Officer. Gifts to Directors and to Officers (as defined above) exceeding $200 mustreceive the approval of the Chairman of the Board or the Board of Directors before acceptance.Gifts to employees who are not Officers (as defined above) exceeding $50 must receive the approvalof the Chief Executive Officer or the Chief Operating Officer before acceptance.          Following are examples of the types of gifts Covered Persons may accept from individuals orcompanies doing or seeking to do business with the Corporation: **•** Meals, gratuities, amenities, or favors based on obvious family or personalrelationships*Page 3 of 12*
 

 
 **•** Meals, refreshments, travel arrangements, accommodations, or entertainment ofreasonable value in the course of a meeting or other bona fide business occasion  **•** Loans from other financial institutions when made on customary terms for the purpose offinancing usual and proper activities (Insiders must refer to the bank’s insider policyfor additional guidance and regulatory requirements concerning loans from correspondentbanks.)  **•** Advertising or promotional material of reasonable value (pens, note pads, calendars,etc.)  **•** Discounts or rebates on merchandise or services that are available to other similarcustomers  **•** Gifts of reasonable value related to commonly recognized events or occasions such as apromotion, wedding, retirement, holiday, or other special occasion  **•** Civic, charitable, education, or religious organizational awards for recognition ofservice and accomplishment  **•** Other benefits or items of value, when approved in writing on a case-by-case basis.The Compliance Officer will keep all Policy Disclosure Forms from Covered Persons.          The observance of these standards is mandatory for all Covered Persons. Observance also is fora Covered Person’s personal benefit, because federal bank bribery law provides that a personconvicted of improperly receiving something with a value of over $1000 can be fined up to 3 timesthe item’s value and imprisoned for 30 years; if the value is less than $1000 the penalty can be afine and/or a year in prison.     **VII. CONFLICTS OF INTEREST****A.**In General. Except for wages, salary, or other direct or indirect compensation paid inthe normal course of the Corporation’s business, no Covered Person may directly orindirectly benefit personally from his or her position or connection as a director,officer, employee, or agent of the Corporation or from any other activity of theCorporation. For example:1. No Covered Person may have any interest, direct or indirect, in any organizationwhich is seeking or doing business with the Corporation or which is the competitorof the Corporation except:a. When such interest comprises securities in a widely held corporationwhich are traded regularly in recognized security markets and suchinterest is not in excess of 1% of any class of securities of such acorporation, orb. When such interest has been fully disclosed in writing to seniormanagement of the Corporation for a determination as to the substantialityof such interest and the propriety of retaining it.*Page 4 of 12*
 

 
2. No Covered Person may serve as an officer, director, employer, or consultant ofanother company or organization which:a. Is a competitor of the Corporation;b. Is seeking or doing business with the Corporation;c. Is in substantial default to the Corporation on any loan, contract orother obligation;d. Is involved in a substantial dispute or litigation with theCorporation; ore. Otherwise presents a conflict of interest, except with the knowledgeand written consent of senior management of the Corporation. If a CoveredPerson receives written consent to so serve, and at any time learns of aconflict of interest or potential conflict of interest arising from thisposition, (s)he must immediately disclose this fact to senior managementof the Corporation.3. No Covered Person, without written authorization of senior management of theCorporation, shall use or reveal any confidential information received in aCorporation capacity except as is authorized by applicable law or regulation or useor permit others to use Corporation property or services for personal purposes.4. Every Covered Person has an obligation immediately to report in writing tosenior management of the Corporation any potential conflict of interest which mayarise at any time for any reason, with respect to his/her association with theCorporation.**B.**Employees. Employees must also comply with all outside employment and other relevantsections of the Employee Handbook.**C.**Principal Shareholders. Principal shareholders are shareholders who, directly orindirectly own, control or have power to vote more than 10% of any class of theCorporation’s voting securities. At the point at which a shareholder becomes a principalshareholder, senior management must advise the principal shareholder of the need for fulldisclosure of their direct or indirect involvement in any loan or other transaction withthe Corporation. This includes a statement that the FDIC urges disclosure of anyinvolvement in any project or business activity that could pose a conflict of interest withthe Corporation.*Page 5 of 12*
 

 
**D.**Political and Civic Activities. The Corporation encourages employees to participate inactivities outside of the Bank, including charitable or political activities. However,federal law prohibits the Bank from making political contributions. To ensure the Bank’sseparation from any political contributions, employees are prohibited, while on Bankproperty or while on duty, from soliciting other employees for political contributions onbehalf of candidates for public office, political action committees, or political parties.Management may disseminate to employees materials from banking related political actioncommittees, however, directors, officers and employees may not coerce other employees intocontributions to such political action committees. However, the Federal Election Commissiondoes permit the use of Corporation funds and assets for limited political purposes, suchas:1**.**Establishing political action committees to solicit contributions to separatepolitical funds to be utilized for political purposes;2**.**Communicating direct political messages to shareholders; or3**.**Implementing non-partisan voter registration campaigns.While the Bancorp/Bank may support certain charitable organizations, directors, officersand employees may not coerce other employees into contributions to such organizations.**E.**Investment in Corporation Stock. Covered Persons that elect to purchase and hold stockof the Corporation are encouraged to do so as a long-term investment. Speculation ortrading in the Stock of the Corporation based on inside information is strictly prohibited.“Inside information” means material, non-public information about the Corporation that areasonably prudent person would consider important in making an investment decision.Covered Persons who are subject to the Corporation’s Insider Trading Policy shall alsocomply with that Policy.**F.**Fiduciary Appointment. Covered Persons must obtain the Chief Executive Officer’sapproval before accepting any appointment to act as a fiduciary or co fiduciary (personalrepresentative, conservator, guardian, or trustee) for a customer of the Corporation,unless the customer is a member of the Covered Person’s Immediate Family. “ImmediateFamily” means parents, spouses, children, or siblings.**G.**Beneficiary or Legacy under a Will or Trust. Covered Persons must report to theCompliance Officer any gift of a beneficial interest or legacy under wills or trusts ofcustomers of the Corporation, unless the customer is a member of the Covered Person’sImmediate Family.**H.**Prohibited Lending Practices. Covered Persons are not permitted to approve credit tomembers of their Immediate Family or to customers in which the*Page 6 of 12*
 

 
Covered Person or a member of the Covered Person’s Immediate Family is a director, officer,member, manager, or partner or has a controlling interest. All such credit applicationsmust be approved in accordance with the Bank’s Loan Policies**I.**Board Consideration of Potential Conflicts. The Board of Directors of the Company or theBank or the Bank’s Director Loan Committee, as appropriate, will specifically consider anyproposed loan or other transaction into which the Corporation is asked to enter, whichpresents a potential conflict of interest. The Board will note its deliberations and itsdecision in the minutes of the meeting at which such loan or transaction is considered.     **VIII. ANTITRUST COMPLIANCE**          Covered Persons are prohibited from entering into arrangements or relationships withcompetitors of the Corporation for the purpose of or that have the effect of setting orcontrolling prices, rates, trade practices, marketing policies, or disclosing future plans orbusiness strategies of the Corporation that have not been disclosed generally to the public.     **IX. TIE-IN ARRANGEMENTS**          The Corporation shall not and Covered Persons shall not cause the Corporation in any manner toextend credit, lease or sell property of any kind, or furnish any service, or fix or vary theconsideration for any of the foregoing, on the condition or requirement that:**A.**The customer obtain some additional credit, property, or service from the Corporation or itsaffiliates, other than a loan, discount, deposit, or trust service;**B.**The customer provide some additional credit, property, or service to the Company