CODE OF ETHICAL CONDUCT
FIRSTFED FINANCIAL CORP. AND FIRST FEDERAL BANK OF CALIFORNIA The Board of Directors (the “Board”) of FirstFed Financial Corp. (together with its subsidiary, the “Company”), parent company of First Federal of California (the “Bank”), has adopted the following Code of Ethical Conduct (“Code”) for directors, officers (including senior financial officers) and employees of the Company. Each director, officer, employee, consultant or agent who acts with, for, or on behalf of the Company or the Bank is responsible for, and is expected to be positively committed to, full compliance with the spirit as well as the letter of the laws, rules, and regulations governing the Company’s activities. The desire to achieve objectives, whether for the Company or for personal reasons, will not excuse wrongful activity, conflict of interest, or impermissible deviation from company policies. Violations to the Code will result in disciplinary action and may result in termination of employment. When applicable, criminal proceedings and/or civil litigation will be initiated.
Any waivers of this Code for executive officers or directors may be made only by the Board of Directors or a Board committee to which such responsibility has been delegated, and must be publicly disclosed in a prompt manner.
No code or policy can anticipate every situation that may arise. Accordingly, this Code is intended as a source of guiding principles. Directors and officers are encouraged to bring questions about particular circumstances to the attention of the Chairman of the Audit Committee or the Chairman of the Governance and Nominating Committee, who may consult with inside or outside legal counsel as appropriate. Responsibilities Compliance with these standards is the responsibility of every employee. Employees are expected to:
Compliance with these standards is the responsibility of every employee. Employees are expected to: Compliance and Enforcement This Code of Ethical Conduct does not include every Company policy on employee business conduct. At every level of the Company, employees are expected to acknowledge and comply with the principles by which the Company conducts its business. If this Code and other Company policies are not followed, disciplinary action, including termination as well as legal action, may result. The Code of Ethical Conduct is the responsibility of the Director of Human Resources, General Counsel, Director of Audit Services, Chief Operating Officer and Chief Executive Officer, as well as the Board of Directors. The role of the Board of Directors is as follows: The Board adopts this policy and periodically reviews reports on compliance directly or through a committee of the Board. The Board reviews and approves (or disapproves) proposed revisions to this policy. The Board is the final authority for implementation, interpretation, and enforcement of this policy.
Employee Integrity Once hired, employees assume a duty to the Company, its clients, and shareholders. This duty is to act at all times in a manner that will merit the continued trust and confidence of the public, to safeguard the Company’s assets and to ensure their efficient use. Confidential Information Confidentiality and integrity are an absolute requirement of the Company. The very nature of our business dictates that information to which many employees have access be handled with the strictest care and should not be disclosed to anyone who does not have a clear right and need to know. Confidentiality and integrity are an absolute requirement of the Company. The very nature of our business dictates that information to which many employees have access be handled with the strictest care and should not be disclosed to anyone who does not have a clear right and need to know. Proprietary Information of the Company Client lists, policy manuals, and internal memorandum are the property of the Company. They are considered confidential and trade secrets, and should not be disclosed or circulated to any non-employees unless disclosure is for a necessary business purpose. This information also must be returned to the Company upon termination of employment. Further, employees are not to make copies, abstracts, compilations, or summaries thereof for any reason other than to fulfill work related duties. Client lists, policy manuals, and internal memorandum are the property of the Company. They are considered confidential and trade secrets, and should not be disclosed or circulated to any non-employees unless disclosure is for a necessary business purpose. This information also must be returned to the Company upon termination of employment. Further, employees are not to make copies, abstracts, compilations, or summaries thereof for any reason other than to fulfill work related duties. Need to Know Safeguarding confidential information concerning the Company’s transactions, its present and prospective clients and all financial information about the Company or its clients is essential to the conduct of the Company’s business. Caution and discretion in accordance with applicable laws and regulations are required in the use of such information, including sharing it only with those members of the Company’s staff who have a legitimate business need to know.
Release of NON-PUBLIC financial information about the Company must be approved by the Chief Executive Officer or the Chief Operating Officer after consultation with the General Counsel, if appropriate.
Conflict of Interest The phrase "conflict of interest" refers to any situation in which the safety and soundness or opportunity of the Bank is in conflict, or has the appearance of being in conflict, with the personal interests of Directors, Officers or other persons with influence over the Company's policies, procedures and actions. Company employees must not engage in personal conduct that conflicts with the Company’s interest and must avoid conduct which even could create the appearance of a conflict of interest.
Employees are expected to promptly and fully disclose any possible conflicts of interest as they arise. The Board of Directors will consider any conflict of interest situation presented to them in accordance with this policy on conflicts of interest. The individual with the potential conflict of interest must: (a) disclose to the Board all material non-privileged information relevant to the Board’s decision and (b) refrain from discussion, voting, or any other involvement in the matter in the deliberations of the Board. Any action that the Board takes in approving a Director or Officer's transaction with the Company must be documented.
Fair DealingA conflict of interest exists whenever an employee obtains a personal benefit to which he or she is not otherwise entitled under a specific compensation arrangement, at the Company’s expense. Any employee who causes harm to the Company, financial or otherwise, in order to benefit any co-worker, friend, acquaintance, family member or other person, is as guilty of self-dealing as if the employee obtained a financial benefit for himself or herself.Not every situation involving self-dealing can be listed in this document. Accordingly, all employees are expected to think through any activity which could involve self-dealing or even the appearance of self dealing, and consult with their supervisor or manager before engaging in any such transaction. Failure to do so could have serious adverse consequences for the employment of the person(s) involved.
Personal BenefitsBecause a conflict of interest could arise or could appear to have arisen, employees and their immediate families are not to solicit, accept, or retain a personal benefit from any client of the Company, an individual, or organization doing or seeking to do business with the Company, or from any other individual or organization, if such a benefit is related to the employee’s employment with the Company. In this context, a personal benefit is regarded as any type of gift, gratuity, service, loan, legacy (except from a relative), fee or compensation or anything of monetary value, including cash, other than certain gifts or benefits as outlined in the Bank’s policies, where there is no, and there appears to be no reasonable likelihood of, improper influence in the performance of duties on behalf of the Company.
Limitations on AuthorityEmployees shall not exercise authority on behalf of the Bank to grant credit to, or make credit recommendations respecting: Members of their families, Any individual or organization lending money to or employing them or (to the best of their knowledge) members of their families; and Any organization in which they or (to the best of their knowledge) members of their families hold a 10% or more ownership interest, or are general partner(s) or directors(s).
Protection and Use of Company Assets Company assets, such as information, materials, supplies, time, software, and facilities, among other property, are valuable resources owned, licensed, or otherwise belonging to the Company. Safeguarding Company assets and ensuring their efficient use is the responsibility of all directors, officers and employees. All Company assets should be used for legitimate business purposes. The personal use of Company assets without permission is prohibited. Bribery Federal law makes it a crime to give a gift to an employee with the intent of corruptly influencing or rewarding the employee for or in connection with any transaction or business of the Bank, and it is a crime to accept or solicit a gift of this nature.
Corporate Opportunity Directors, officers and employees must not take advantage of an opportunity that belongs to the Company. In general, this means any opportunity that falls within the Company’s lines of business. Also, whenever the Company has been actively soliciting a business opportunity, or the Company’s funds, facilities, or personnel have been used in pursuing the opportunity, or the opportunity has been offered to it, that opportunity rightfully belongs to the Company and not to insiders who may be in a position to divert the opportunity for their own benefit. Further, directors, officers and employees have a duty to offer such an opportunity to the Company first, before investing in the opportunity for his or her own benefit. Insider Trading The use or disclosure of “material inside information” regarding the Company subjects the employees, the Company, and persons outside the Company to whom the information is communicated to significant liability under federal and securities laws. Trading on the basis of material inside information is unlawful and is prohibited under this Code. Information is “material” for securities law purposes when the information is such that a significant likelihood exists that a reasonable investor would think it important in making investment decisions. Information is “inside” when it has not been publicly disseminated. It is unlawful to trade on the basis of material inside information. The purchase of FirstFed Financial Corp. common stock is encouraged when made as part of a regular investment program. Any purchase or sale of FirstFed common stock by executive officers, directors, or their affiliates and family members must be discussed in advance with the Company’s General Counsel and/or Chief Executive Officer or Chief Operating Officer, and must be reported to the Securities and Exchange Commission within the legally-required timeframe. Politics Federal law prohibits the Company or anyone acting on its behalf from making an expenditure or contribution of cash or anything else of monetary value directly or indirectly in connection with an election to political office. However, individual participation in political and civic activities is encouraged, as are personal contributions to political candidates of causes, and the Bank has a Political Action Committee to facilitate participation by its officers and directors in matters related to the banking industry.
Accounting PracticesIt is the Company’s policy to fully and fairly disclose the financial condition of the Company in compliance with applicable accounting principles, laws, rules and regulations. All books and records of the Company shall be kept in such a way as to fully and fairly reflect all Company transactions. Directors, senior executive officers and other employees may be called upon to provide necessary information to assure that the Company’s public reports are complete, fair and understandable. The Company expects prompt accurate answers to inquiries related to these public disclosure requirements. Furthermore, the senior financial officers of the Company, including the principal financial officer and controller, or persons performing similar functions, shall prepare full, fair accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC, as well as the Company’s other public communications.Compliance with Laws, Rules and RegulationsThe Company has implemented policies to help ensure that it conducts its activities in compliance with all applicable laws and regulations, including insider trading laws.Reporting of Suspected Illegal or Unethical Behavior
The Company expects every employee to execute his or her fiduciary responsibility by abiding by the laws and regulations that apply to the Company.
Directors, officers and employees must report suspected violations of laws, rules, regulations, this Code or any other Company policies promptly to the Chair of the Audit Committee, through the procedures established by that Committee which include a Fraud Notification voice mail box telephone number (310/319-5988). The report may be made confidentially or anonymously, and retaliation will not be permitted for reports made in good faith. The Audit Committee will determine the appropriate action to take, including conducting any investigation of the matter and recommending appropriate discipline. Depending on the circumstances, the Committee may make further reports to management and the Board of Directors, and appropriate action will be taken in the event of any violations of this Code, laws, rules or regulations.
The failure by any director, officer or employee to comply with the laws or regulations governing the Company’s business, this Code or any other Company policy or requirement may result in disciplinary action and, if warranted, legal proceedings.Review These “Standards of Conduct” will be acknowledged as reviewed periodically by all employees; supervisors will discuss these standards periodically with their subordinates; and each new employee shall receive a copy as part of their introduction to the Company.
This Code does not supersede, change or alter the existing Company policies and procedures already in place as stated in various policy manuals and the employee handbook given to all employees. Employees are instructed to refer to these more detailed materials. Company policies as contained in manuals and the employee handbook contain information that is proprietary and confidential, and the Company hereby expressly denies waiving any right to assert claims that the contents thereof are proprietary and/or confidential.
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