PHILADELPHIA CONSOLIDATED HOLDING CORP.
CODE OF CONDUCT
INTRODUCTION
The Board of Directors of Philadelphia Consolidated Holding Corp. has developed
and adopted this Code of Conduct (this "Code") to promote:
- Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interests between personal and professional relationships;
- Full, fair, accurate timely and understandable disclosure in Philadelphia
Consolidated Holding Corp.'s annual and quarterly reports and in other public
communications made by Philadelphia Consolidated Holding Corp.;
- The prompt internal reporting to an appropriate person or persons identified
in this Code of violations of this Code.
- Compliance with applicable governmental laws, rules and regulations; and
This Code applies to all directors, officers and employees of Philadelphia
Consolidated Holding Corp. and its subsidiaries, including, but not limited
to, the chief executive officer, the chief financial officer, the principal
accounting officer and controller of Philadelphia Consolidated Holding Corp.,
and persons performing similar functions (these persons are collectively referred
to as the "Senior Financial Officers").
Please take the time to read this Code carefully, since you are responsible
for knowing and understanding its contents. If you need more information or
have any questions, contact James J. Maguire, Jr. at 610-617-7762 or jjmjr@phlyins.com
or Craig P. Keller at 610-617-7684 or ckeller@phlyins.com.
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I.
DEFINITIONS
Several terms in this Code have special meanings. These meanings should be
"read into" those terms wherever they are used.
Company means Philadelphia Consolidated Holding Corp. or any of its
subsidiaries.
Employee means, of course, any employee, including an officer. For the
purposes of this Code, it also includes any member of a company board of directors.
(To make this Code easier to follow, the word "you" is often used
as a shorthand way of addressing you as an employee of the Company.)
Associate ordinarily means a member of your immediate family (for this
purpose, immediate family means your spouse or any of you parents, grandparents,
children by blood or adoption, grandchildren, siblings, brother or sister-in-law
and son or daughter-in-law). It also includes any organization in which
you or a member of your immediate family holds a partnership interest or owns
more than 10% of any class of security. Finally, associate can refer to a trust
of which you are a trustee, or one in which you or a member of your family has
a beneficial interest.
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II.
GENERAL GUIDELINES
1. Outside Activities - "A full day's work for a full day's pay"
is the expression most often used to describe employment as a two-way relationship
involving a fair exchange. As part of this relationship, all employees are expected
to give full attention to Company responsibilities.
Employment with an outside business or trade organization may interfere with
these responsibilities or affect your performance of Company duties. Generally,
an employee of the Company should not accept any employment with any other business
or organization outside the Company. In addition, you should not pursue other
regular activities outside the Company that will interfere with your responsibilities
or adversely affect your performance.
On the other hand, so long as your work-related obligations are met, the company
has no interest in your outside activities. The only exceptions to this are
when particular activities -- such as caring for your own personal financial
interests -- raise questions of conflict of interest treated below and elsewhere
in these guidelines.
2. Personal Financial Interests - The Company expects that whenever
your position requires you to exercise judgement and discretion, you will use
your best judgement in the interests of the Company. The duties of most employees
are such that personal financial interests are seldom if ever a consideration
in the kinds of judgements they may be called upon to make. Some positions,
however, may involve responsibilities that could be influenced, consciously
or unconsciously, by personal financial interests.
To avoid any conflict of interest, or the appearances of a conflict, neither
you nor any associate should have a direct or indirect investment in any business
enterprise which is doing or seeking to do business with the Company, or which
is a competitor of the Company.
If you are in a position to influence or to carry out the investment policy
of the Company, you and your associates should avoid investment in any business
enterprise in which the Company has or is considering making an investment,
except for an interest up to 2% of the stock of a publicly owned company.
These prohibitions are not intended to preclude you from certain types of investment
that, from a common-sense point of view, should not interfere with your impartial
best judgement as an employee. For example, the fact that the Company must do
business with the telephone company in order to operate should not preclude
you or any associate from owning common stock of AT&T, with its hundreds
of thousands of shareholders. Similarly, your ownership of shares of beneficial
interest in a mutual fund, which from time to time may hold common stock of
suppliers or competitors of the Company, will ordinarily raise no concern under
these guidelines. (Presumably you have little or no control over the mutual
fund's investment decisions and are unlikely to be influenced by a minor indirect
interest in only one of many diversified holdings of the fund).
3. Confidential and Proprietary Information - During the course of your
employment, you may have knowledge of or practical access to information with
respect to the Company's business or the business or personal affairs of its
customers or employees. It is important that such information be treated confidentially.
In addition, recently enacted privacy legislation imposes specific legal obligations
on the Company with respect to personal information received in connection with
customers' insurance transactions. If your position is such as to make you responsible
in any way for complying with such obligations, you are to conscientiously adhere
to the instructions you receive as essential to the protection of customers'
privacy and the integrity of the Company's dealings with them.
Whether or not certain information you have as a result of your position is
confidential, you are not to use such information in any way that might be detrimental
to the interest of the Company or its employees or customers.
In addition, you are not to use any such information, unless it has already
become public in a lawful manner, for your own direct or indirect benefit, or
for the direct or indirect benefit of any associate or any other recipient of
the information.
With respect to confidential information about the Company and its business,
you are responsible for maintaining its confidentiality not only during your
employment, but also after any termination of employment. The Company will pursue
legal remedies available to it to prevent any former employee and/or a subsequent
employer from benefiting from confidential information about the Company whose
use is or may be detrimental to the interests of the Company.
4. Corporate Opportunities - You may not appropriate, for your own or
for any associate's personal profit or advantage, any business venture, opportunity,
or potential opportunity that you discover or develop in the course of your
employment and that is in any way related to any business the Company is engaged
in or may intend to be engaged in. This includes any opportunity to profit from
transactions in the insurance industry or other lines of business engaged in
or planned by the Company or business opportunities which you discover during
the course of your employment, or through the use of Company property or information.
Also, neither you nor any associate may directly or indirectly compete with
the Company in the purchase or sales of any property, right, or interest, nor
may you or any associate knowingly, acquire, directly or indirectly, anything
of probable interest to the Company.
5. Dealings in Securities of Business Enterprises - In addition to the
ethical considerations involved, federal law generally prohibits security transactions
based on non-public material information. There are few hard-and-fast, easy
to understand rules in this area, so where there is doubt, you should consult
with the President of the Company.
In general, the law applies to you and your associates when purchasing, selling,
or otherwise trading in the securities of, or any other proprietary interest
or investment in, the Company or any other business enterprise. (You could be
engaging in any such transaction for yourself or for the Company, or an associate
could be engaging in any such transaction in his or her own behalf, or for you.)
In any such situation, the law prohibits, and may impose civil or criminal liabilities
on you, for engaging in any such transaction when you or your associate is in
possession of material, non-public information concerning or affecting such
business enterprise. This includes, without limitation, information which:
- (a) relates in any way to the business or financial condition, present or
prospective, of such business enterprise; to its products, services or facilities,
whether presently available or in the process of development; to the market
for its securities; or to the Company's investment intentions with respect
to such enterprise, and
- (b) has not been made generally known to the public.
Each employee must comply with the Company's Policy relating to Insider Trading
in Company Securities and Confidentiality of Information.
6. Acceptance or Giving of Gifts, Entertainment, Loans or Other Favors
- The Company enters into contracts for the purchase or sales or products and
services solely on the basis of the merits involved in each particular situation.
All customers and suppliers should be treated even-handedly, and all transactions
conducted on an arms-length basis. The receiving or giving of expensive gifts,
lavish entertainment. loans or special favors that may influence or give the
appearance of influencing this process is prohibited. The following guidelines
are applicable:
- Neither you nor any associate shall accept any offer of gifts, entertainment,
loans or other favors by any enterprise or organization which is doing or
seeking to do business with the Company, which is a competitor of the Company,
or in which the Company has or is considering making an investment. The other
enterprises or organizations just referred to include suppliers, insurance
agencies and brokers, and investment dealers and brokers.
The prohibition against accepting certain loans does not apply to loans made
in the ordinary course of business from established banking or financial institutions.
or policy loans under existing contracts of life insurance, on terms no more
favorable than generally available in comparable transactions to persons similarly
situated.
The prohibition against certain gifts and other favors does not apply where
the gift, entertainment or other favor is of such nominal value that it cannot
be regarded as placing you under any obligation to the donor.
Without limiting the generality of any of the foregoing, if you are in a position
of influence or to carry out the investment policy of the Company, you should
not accept allotments of new issues on behalf of yourself or any associate,
directly or indirectly, either from a person other than your regular broker
or in amounts in excess of what would be considered normal in the circumstances.
- You may give gifts and favors to , or entertain, at Company expense only
if you are generally or specifically authorized to do so, and then only if
such gifts, favors and entertainment meet all of the following criteria:
- They are consistent with accepted business practices,
- They are of sufficiently limited value, and in a form that will not
be construed as a bribe or pay-off,
- They are not in contravention of applicable law and generally accepted
ethical standards, and
- Public disclosure of the facts will not embarrass the Company.
- Federal law, as well as certain state statues, prohibit the offer, promise
or gift of anything of value to an employee, agent or official of the government,
if made with an intent to influence such individual within his/her area of
responsibility. The giving of gifts and favors to or the entertainment of
such individuals, even when not technically prohibited by law, is strongly
discourages as a matter of Company policy, so that any appearance of impropriety
may be avoided.
7. Relationships With Competitors - In addition to tangible property
and resources, your knowledge of the Company and its business constitutes one
of the Company's most valuable assets. To prevent misuse of this asset, you
may not render advice or service, gratuitously or otherwise, to any organization
or individual engaged in the same or similar business or research as the Company
unless you are authorized to do so by the Company. Even then, you may do so
only if clearly the advice or service rendered cannot be used to the detriment
of the Company.
8. Accurate Books and Records - The Federal Foreign Corrupt Practices
Act of 1977 (FCPA) requests that the Company keep books and records that, in
reasonable detail, accurately and fairly reflect its transactions. The Company
must also maintain appropriate systems of internal accounting control such that:
- Transactions are executed in accordance with management's general or specific
authorization;
- Transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles or
any other criteria applicable to such statements, and to maintain accountability
for assets;
- Access to assets is permitted only with management's general or specific
authorization; and
- The recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
difference.
Compliance with these requirements shall be in accordance with the following
guidelines:
- The use of any funds or other assets. or the providing of any services,
for any purpose which is unlawful under the laws of the United States, any
state thereof, or any other jurisdiction (foreign or domestic) is strictly
prohibited.
- No undisclosed or unrecorded funds or assets shall be established for any
purpose.
- No false or artificial entries shall be made in any books or records for
any reason and no employee shall engage in any arrangement that results in
such prohibited act.
- No payment shall be approved or made with the intention or understanding
that it is to be used for any purpose other than that described by the document
supporting the payment.
- Any employee having information or knowledge as to a possible violation
of any of the above provisions or any other instance of non-compliance with
the requirements of FCPA shall promptly report such matter in confidence to
their immediate Supervisor or Department Manager.
- Appropriate management personnel are responsible for the enforcement of
and compliance with these guidelines.
- Persons responsible for enforcement and compliance shall be required to
certify that they fully understand their responsibility to comply with the
above guidelines and that, to the best of their knowledge and belief, they
have within the past year complied with such guidelines.
- Persons unable to so certify shall disclose any possible instance of non-compliance
by reporting it in writing in full detail to their immediate Supervisor or
Department Manager.
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III.
PROCEDURES FOR DISCLOSURES
The following procedures are established to provide for disclosure of any material
interest, affiliation or activity on the part of any employee that conflicts
with, is likely to conflict with, or may appear to conflict with, the official
duties of such employee, Company policy, or the guidelines stated in this Code
of Business Conduct:
1. On an annual basis, after each calendar year-end, questionnaires will be
sent by the Personnel Department to each director, officer, manager, and key
professional employee of the Company in order to elicit disclosure of possible
conflicts of interest.
2. A questionnaire will also be sent to each new director, officer, manager,
or key professional employee upon becoming an employee.
3. A questionnaire, obtainable from the Personnel Department, shall be submitted
by any such person with respect to any conflict of interest or prospective conflict
of interest situation not previously reported.
4. All questionnaires shall first be reviewed by the Compensation Committee.
This Committee may take such action as it deems appropriate to correct any conflict
of interest it finds to exist. The Committee shall annually submit a report
of its activities to the Company Board of Directors as well as to the appropriate
standing committee or officer(s), as the case may be, of each subsidiary, for
the latter's further reporting to such subsidiary's Board of Directors.
5. All information disclosed in the questionnaires shall be treated on a confidential
basis, except to the extent necessary for the protection of the Company's interest.
6. Employees not subject to this disclosure procedure -- that is employees
other than directors, officers, managers, and key professional employees --
are not thereby excused from observance for this Code of Business Conduct in
every respect. At his/her own discretion, any such employee may request and
complete a questionnaire on a voluntary basis as a means of obtaining review
of the propriety of a discloses set of facts and circumstances.
Whether or not you are required to complete the annual questionnaire, you are
encouraged to consult with your manger or the President of the Company before
entering into transactions, relationships, or associations where the potential
for conflict of interest exists.
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IV.
FINANCIAL REPORTING
As a public company it is of critical importance that the filings of Philadelphia
Consolidated Holding Corp. ("PCHC") with the Securities and Exchange
Commission and other public disclosures be accurate and timely. Depending on
his or her position with the Company, an employee may be called upon to provide
information to assure that PCHC's public reports are complete, fair and understandable.
The Company expects all of its personnel to take this responsibility very seriously
and to provide prompt and accurate answers to inquiries related to PCHC's public
disclosure requirements.
Senior Financial Officers have the primary responsibility for ensuring that
the disclosure in PCHC's periodic reports is full, fair, accurate, timely and
understandable. Therefore, Senior Financial Officers are required to familiarize
themselves with the disclosure requirements applicable to PCHC as well as the
business and financial operations of PCHC. Senior Financial Officers are responsible
for adequately supervising the preparation of the financial disclosures in the
periodic reports required to be filed by PCHC.
In the performance of their duties, Senior Financial Officers and other Company
employees are prohibited from knowingly misrepresenting facts. A Company employee
will be considered to have knowingly misrepresented facts if he or she knowingly
(1) makes, or permits or directs another to make, materially false or misleading
entries in an entity's financial statements or records; (2) fails to correct
materially false and misleading financial statements or records; (3) signs,
or permits another to sign, a document containing materially false and misleading
information; or (4) falsely responds, or fails to respond, to specific inquiries
of the Company's internal or external auditors.
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V.
WAIVERS
The Company expects that all of its directors, officers and employees will
strictly adhere to this Code. Notwithstanding the foregoing, there may be special
circumstances under which the Company may elect to waive a particular provision
of this Code for a limited purpose. Waivers of this Code for any employee of
the Company other than executive officers or directors of PCHC may only be made
by the Chief Executive Officer of PCHC. Any waiver of this Code for executive
officers or directors of PCHC may only be made by the Board of Directors of
PCHC and must be promptly disclosed to the stockholders of PCHC and to appropriate
regulators, if and as required by applicable law or rules of the Nasdaq Stock
Market or other self-regulatory organization then applicable to the Company.
For the purposes of this section of the Code, the term "executive officer"
shall mean those officers covered in Rule 16a-1(f) under the Securities Exchange
Act of 1934, as amended.
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VI.
RESPONSIBILITIES FOR COMPLIANCE
Where a director, officer, or employee believes or determines that an actual,
potential, or apparent violation of this Code exists he or she must promptly
report it in writing, on an anonymous basis if so desired, to PCHC's Director
of Internal Audit, who reports directly to the Audit Committee of the Board
of Directors of PCHC. Complaints will be promptly investigated by the Director
of Internal Audit or, in the case of actual, potential or apparent violations
involving accounting or auditing matters, another duly appointed delegatee of
the Audit Committee pursuant to the Audit Committee's written procedures. Complaints
and questions may also be directed to the Audit Committee or its designees.
Full and timely disclosure of the facts will help meet your responsibilities
under this Code and will enable the Company to maintain the highest ethical
standards. No officer, director, or employee will be discharged, threatened,
or discriminated or retaliated against because the person or someone else acting
on his or her behalf makes a good faith disclosure concerning another officer,
director, or employee. Officers, directors and employees are obliged to cooperate
with investigations into Code violations and must always be truthful and forthcoming
in the course of any such investigations.
Any director, officer or employee who has a good-faith belief that he or she
has been harassed, discharged, threatened, discriminated against or otherwise
retaliated against because of a disclosure of securities law violations or fraudulent
activity in violation of this Code, or because of assistance in an investigation,
should promptly bring his or her complaint of retaliation to the attention of
the Director of Internal Audit (or the Audit Committee of PCHC in the case where
you reasonably believe that the Director of Internal Audit is involved in the
retaliation). The Director of Internal Audit or the Audit Committee (or a duly
appointed designee thereof) will have authority to investigate any such claim
of retaliation and, if retaliation has occurred, to promptly recommend corrective
action.
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VII.
CONSEQUENCES OF VIOLATIONS
Violations of any provision of this Code, including retaliation against someone
who has made a complaint of a violation or any clear infraction of applicable
laws or of recognized ethical business standards, which are not covered by this
Code, may result in disciplinary action, including termination of employment
or other relationship with the Company. In addition, certain violations could
result in the imposition of civil and/or criminal sanctions. Illegal actions
on the part of persons covered by this Code may be reported to the appropriate
authorities.
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CONFIDENTIAL
Code of Conduct
Disclosure Certification
Intending to be legally bound hereby, I certify that I have read and reviewed
the Code of Conduct of Philadelphia Consolidated Holding Corp., and Subsidiaries
and fully understand my responsibility to comply with the guidelines stated
herein.
To the best of my knowledge and belief, neither I nor any of my Associates
has any interest or connection, or has within the past year engaged in any activity,
which might conflict with the Company's interests or be in violation of such
guidelines, except as indicated by check mark in one or more of the boxes below.
- The foregoing statement is true, without exception
- Except as previously reported by me in writing to the Company
- Except as reported in full detail on a separate sheet attached to this letter
________________________________
Date
|
________________________________
Signature
|
________________________________
Name
|
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