|
|
SWS GROUP, INC.
Audit Committee Charter
Purpose
To assist the Board of Directors in fulfilling its oversight responsibilities for (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of the Company’s internal audit function and independent auditors. The Audit Committee will also prepare the report that SEC rules require be included in the Company’s annual proxy statement.
Authority
The Audit Committee has authority to conduct or authorize investigations into any matters
within its scope of responsibility. It is empowered and shall receive appropriate funding to:
- Appoint, compensate, and oversee the work of the public accounting firm employed by the Company to conduct the annual audit. This firm will report directly to the Audit Committee.
- Resolve any disagreements between management and the auditor regarding financial reporting.
- Pre-approve all auditing and permitted non-audit services performed by the Company's external audit firm.
- Retain independent counsel, accountants, or others to advise the Committee or assist in the conduct of an investigation.
- Seek any information it requires from employees; all of whom are directed to cooperate with the committee's requests, or external parties.
- Meet with Company officers, external auditors, or outside counsel, as necessary.
- The Committee may delegate authority to subcommittees, including the authority to preapprove all auditing and permitted non-audit services, providing that such decisions are presented to the full committee at its next scheduled meeting.
Composition
The Audit Committee will consist of at least three and no more than six members of the Board of
Directors. The members of the Audit Committee and the Committee chairman shall be appointed by the Board on the recommendation of the Nominating/Corporate Governance
Committee. Audit Committee members may be replaced by the Board.
Each Committee member will be both independent and financially literate. The members of the
Audit Committee shall meet the independence and experience requirements of the New York Stock Exchange, Section 10A(m)(3) of the Securities Exchange Act of 1934 and the rules and regulations of the Commission. At least one member shall be designated as the “financial expert,” as defined by applicable legislation and regulation. No Committee member shall simultaneously serve on the audit committees of more than two other public companies.
Meetings
The Committee will meet at least four times a year, with authority to convene additional
meetings, as circumstances require. All Committee members are expected to attend each meeting, in person or via telephone or video-conference. The Committee will invite members of management, auditors or others to attend meetings and provide pertinent information, as necessary. It will meet separately, periodically, with management, with internal auditors and with external auditors. It will also meet periodically in executive session. Meeting agendas will be prepared and provided in advance to members, along with appropriate briefing materials. Minutes will be prepared.
Responsibilities
The Committee will carry out the following responsibilities:
Financial Statements
- Review significant accounting and reporting issues and understand their impact on the financial statements. These issues include:
- Complex or unusual transactions and highly judgmental areas
- Major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles
- The effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the company
- Alternative treatments of financial information within generally accepted accounting principles that have been discussed with management and the ramifications of the use of such alternative disclosures and treatments
- Review analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements
- Review with management and the external auditors the results of the audit, including any difficulties encountered. This review will include any restrictions on the scope of the independent auditor’s activities or on access to requested information, and any significant disagreements with management.
- Discuss the annual audited financial statements and quarterly financial statements with management and the external auditors, including the company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
- Review disclosures made by CEO and CFO during the Forms 10-K and 10-Q certification process about significant deficiencies in the design or operation of internal controls or any fraud that involves management or other employees who have a significant role in the Company’s internal controls.
- Discuss earnings press releases (particularly use of “pro forma,” or “adjusted” non-GAAP, information), as well as financial information and earnings guidance provided to analysts and rating agencies. This review may be general (i.e., the types of information to be disclosed and the type of presentations to be made). The Audit Committee does not need to discuss each release in advance.
Internal Control
- Consider the effectiveness of the Company's internal control system, including information technology security and control.
- Understand the scope of internal and external auditors' review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management's responses.
Internal Audit
- Review with management and The Director of Internal Audit the charter, plans, activities, staffing, and organizational structure of the internal audit function.
- Ensure there are no unjustified restrictions or limitations, and review and concur in the appointment, replacement, or dismissal of The Director of Internal Audit.
- Review the effectiveness of the internal audit function, including compliance with The Institute of Internal Auditors' Standards for the Professional Practice of Internal Auditing.
- On a regular basis, meet separately with The Director of Internal Audit to discuss any matters that the Committee or internal audit believes should be discussed privately.
- The Committee is authorized and encouraged to maintain direct access to internal audit. The Director of Internal Audit is authorized and encouraged to maintain direct access to the Committee.
External Audit
- Review the external auditors' proposed audit scope and approach, including coordination of audit effort with internal audit.
- Review the performance of the external auditors, and exercise final approval on the appointment or discharge of the auditors. In performing this review, the Committee will
- At least annually, obtain and review a report by the independent auditor describing: the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (to assess the auditor’s independence) all relationships between the independent auditor and the Company
- Take into account the opinions of management and internal audit
- Review and evaluate the lead partner of the independent auditor
- Present its conclusions with respect to the external auditor to the Board
- Ensure the rotation of the lead audit partner every five years and other audit partners every seven years, and consider whether there should be regular rotation of the audit firm itself.
- Present its conclusions with respect to the independent auditor to the full Board
- Set clear hiring policies for employees or former employees of the independent auditors
- On a regular basis, meet separately with the external auditors to discuss any matters, including the risk of fraud, that the Committee or auditors believe should be discussed privately.
Compliance
- Obtain and review reports from management, The Director of Internal Audit and the independent auditor to ensure that the Company and its subsidiary and affiliated entities are in conformity with applicable legal requirements and the Company's Code of Business Conduct and Ethics.
- Review reports and disclosures of insider and affiliated party transactions.
- Establish procedures for: (i) the receipt, retention, and treatment of complaints received by the listed issuer regarding accounting, internal accounting controls, or auditing matters; and (ii) the confidential, anonymous submission by employees of the listed issuer of concerns regarding questionable accounting or auditing matters.
- Review the findings of any examinations by regulatory agencies, and any auditor observations.
- Review the process for communicating the Code of Business Conduct and Ethics to Company personnel, and for monitoring compliance therewith.
- Obtain regular updates from management and Company legal counsel regarding compliance matters.
Reporting Responsibilities
- Regularly report to the Board of Directors about Committee activities and issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements and the Company’s Code of Business Conduct and Ethics, the performance and independence of the Company’s independent auditors, and the performance of the internal audit function.
- Provide an open avenue of communication between internal audit, the external auditors, and the Board of Directors.
- Report annually to the shareholders, describing the Committee's composition, responsibilities and how they were discharged, and any other information required by rule, including approval of non-audit services.
- Review any other reports the Company issues that relate to committee responsibilities.
Other Responsibilities
- Discuss with management the Company's major risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies
- Perform other activities related to this charter as requested by the Board of Directors
- Institute and oversee special investigations as needed
- Review and assess the adequacy of the Committee charter annually, requesting Board approval for proposed changes, and ensure appropriate disclosure as may be required by law or regulation
- Confirm annually that all responsibilities outlined in this charter have been carried out
- Evaluate the Committee's and individual members' performance at least annually
Reviewed and Confirmed: August 24, 2011 |
|
SWS GROUP, INC.
Compensation Committee Charter
I. Purpose
The primary purpose of the Compensation Committee is: (a) to discharge the Board's
responsibilities relating to compensation of the Company's executive officers, (b) review
the overall compensation system as determined by Company management for Company
employees to insure internal and external equity; and (c) to produce an annual report on
executive compensation for inclusion in the Company's proxy statement.
II. Organization
The Compensation Committee shall consist of three or more directors, each of whom
shall satisfy the applicable independence requirements of the New York Stock Exchange
and any other regulatory requirements.
Committee members shall be elected by the Board at the organizational meeting of the
Board of Directors; members shall serve until their successors shall be duly elected and
qualified or until their earlier resignation, removal or death. The Committee's chairperson
shall be designated by the full Board or, if it does not do so, the Committee members
shall elect a chairperson by vote of a majority of the full Committee.
The Committee may form and delegate authority to subcommittees when appropriate.
III. Structure and Meetings
The chairperson of the Compensation Committee will preside at each meeting of the
Committee and, in consultation with the other members of the Committee, will set the
frequency and length of each meeting and the agenda of items to be addressed at each
meeting. The chairperson will ensure that the agenda for each meeting is circulated to
each Committee member in advance of the meeting.
IV. Goals and Responsibilities
The Compensation Committee shall have the power and authority of the Board to
perform the following duties and to fulfill the following responsibilities:
- review the performance of senior officers of the Company, and review and
recommend to the Board their compensation;
- review and approve corporate goals and objectives relevant to the compensation of
the Chief Executive Officer, evaluate the Chief Executive Officer's performance in
light of these goals and objectives, and recommend to the Board the Chief Executive
Officer's compensation based on this evaluation;
- make recommendations to the Board with respect to incentive-compensation plans
and equity-based plans, and establish criteria for the granting of options to the
Company's officers and other employees and review and approve the granting of
options in accordance with such criteria;
- produce an annual report on executive compensation for inclusion in the Company's
proxy statement, in accordance with applicable rules and regulations;
- establish and periodically review policies for the administration of executive
compensation programs, review on a periodic basis the operation of the Company's
executive compensation programs to determine whether they are properly
coordinated, and review new executive compensation programs;
- establish and periodically review management benefits and perquisites, including
retirement and termination benefits;
- review director compensation levels and practices, and recommend, from time to
time, changes in such compensation levels and practices to Board with equity
ownership in the Company encouraged;
- provide periodic reports on the Committee's activities to the Board and circulate
Committee minutes of meetings to all directors;
- annually review and reassess the adequacy of this Charter and recommend any
proposed changes to the Board for approval; and
- perform any other activities consistent with this Charter, the Company's Bylaws and
governing law as the Committee or the Board deem appropriate.
V. Performance Evaluation
The Compensation Committee shall conduct an annual performance evaluation.
VI. Committee Resources
The Compensation Committee shall have the authority to obtain advice and seek
assistance from internal and external legal, accounting and other advisors. The
Committee shall have sole authority to retain and terminate any compensation consultant
to be used to evaluate director, CEO or senior officer compensation, including sole
authority to approve the consulting firm's fees and other retention terms.
VII. Disclosure of Charter
This Charter will be made available on the Company's website at www.swst.com.
Reviewed and Confirmed: May 25, 2011
|
|
SWS GROUP, INC.
Nominating/Corporate Governance
Committee Charter
I. Purpose
The primary objectives of the Nominating/Corporate Governance Committee are to assist
the Board by: (a) identifying individuals qualified to become Board members and recommending
that the Board select a group of director nominees for each next annual meeting of the
Company's shareholders; (b) ensuring that the Audit, Compensation and Nominating/Corporate
Governance Committees of the Board shall have the benefit of qualified and experienced
"independent" directors; and (c) developing and recommending to the Board a set of effective
corporate governance policies and procedures applicable to the Company.
II. Organization
The Nominating/Corporate Governance Committee shall consist of three or more
directors, each of whom shall satisfy the applicable independence requirements of the New York
Stock Exchange and any other regulatory requirements.
Committee members shall be elected by the Board at the annual organizational meeting
of the Board of Directors; members shall serve until their successors shall be duly elected and
qualified or until their earlier resignation, removal or death. The Committee's chairperson shall
be designated by the full Board or, if it does not do so, the Committee members shall elect a
chairperson by vote of a majority of the full Committee.
The Committee may form and delegate authority to subcommittees when appropriate.
III. Structure and Meetings
The chairperson of the Nominating/Corporate Governance Committee will preside at
each meeting and, in consultation with the other members of the Committee, will set the
frequency and length of each meeting and the agenda of items to be addressed at each meeting.
The chairperson of the Committee will ensure that the agenda for each meeting is circulated to
each Committee member in advance of the meeting.
IV. Goals and Responsibilities
The Nominating/Corporate Governance Committee shall:
- develop and recommend to the Board a set of corporate governance principles
applicable to the Company, including policies on the size and composition of the
Board, and review and reassess the adequacy of such guidelines annually and
recommend to the Board any changes deemed appropriate;
- review possible candidates for Board membership consistent with the Board's criteria
for selecting new directors;
- annually recommend a slate of nominees to the Board with respect to nominations for
the Board at the annual meeting of the Company's shareholders;
- recommend directors to be selected for membership on Board committees;
- perform Board performance evaluations and oversee evaluation of management on an
annual basis;
- develop management succession plans;
- review major organizational and staffing matters;
- maintain an orientation program for new directors and a continuing education
program for all directors;
- provide periodic reports on the Committee’s activities to the Board and circulate
Committee minutes of meetings to all directors;
- annually review and reassess the adequacy of this Charter and recommend any
proposed changes to the Board for approval; and
- generally advise the Board (as a whole) on corporate governance matters and perform
any other activities consistent with this Charter, the Company's Bylaws and
governing law as the Committee or the Board deems appropriate.
V. Performance Evaluation
The Nominating/Corporate Governance Committee shall conduct an annual performance
evaluation.
VI. Committee Resources
The Nominating/Corporate Governance Committee shall have the authority to obtain
advice and seek assistance from internal or external legal, accounting or other advisors. The
Committee shall have the sole authority to retain and terminate any search firm to be used to
identify director candidates, including sole authority to approve such search firm's fees and other
retention terms.
VII. Disclosure of Charter
This Charter will be made available on the Company's website at www.swst.com.
Adopted May 26, 2011
|
|
SWS GROUP, INC.
Corporate Governance Guidelines
The Board of Directors
- Membership
- Size of Board
The Board's optimum size is seven to nine members.
- Mix of Directors; "Independent" Directors
A majority of the directors shall satisfy the independence requirements of the New York Stock Exchange and any other regulatory authority.
The Board believes that it should not have more than one management director.
- Board Membership Criteria
The Board seeks members from diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated, and be selected based upon contributions they can make. The Company does not limit the number of boards on which a director may sit. Directors should plan to make a significant time commitment to the Company.
- New Directors
The Nominating/Corporate Governance Committee has, as one of its responsibilities, the recommendation of director candidates to the full Board. The Nominating/Corporate Governance Committee will maintain an orientation program for new directors.
- Retirement; Resignation
- Term Limits
The Board does not favor term limits for directors, but believes that it is essential to monitor overall Board performance as well as the performance of individual Board members.
- Retirement Policy
The Board does not favor a mandatory retirement policy for directors.
- Resignation Policy - Management Directors
Management directors shall offer to resign from the Board upon their resignation, removal or retirement as an officer of the Company.
- Directors Changing Their Present Job Responsibilities
The Board expects directors to offer to resign from the Board upon a change in their business position including, without limitation, retirement from the position held upon nomination as a director.
- Conduct
- Board Meetings
- Selection of Agenda Items and Executive Sessions
The Chairman and Chief Executive Officer will establish the agenda for Board meetings. The non-management directors of the Board will meet in executive session during each of the Board's regularly scheduled meetings without any management directors and any other members of the Company's management who may otherwise be present. The non-management directors will rotate the presiding position among the chairs of the authorized Board Committees and will disclose this process in the annual proxy statement.
- Distribution of Materials
The Company shall distribute, sufficiently in advance of meetings to permit meaningful review, written materials for use at Board meetings.
- Attendance of Non-Directors
The Board believes that attendance of key executive officers augments the meeting process.
- Number of Meetings; Attendance and Preparation
The Board of Directors shall hold a minimum of 4 meetings per year. Directors are expected to attend all meetings and, prior to the meetings, to have reviewed all written meeting materials distributed to them in advance. Directors are expected to be physically present at all regularly scheduled meetings. Conference telephone, videoconference, or similar communication equipment attendance at a meeting will generally only be permitted if it is necessary to constitute a quorum.
- Conflicts of Interest
Directors are expected to avoid any action, position or interest that conflicts with an interest of the Company, or gives the appearance of a conflict. The Company annually solicits information from directors in order to monitor potential conflicts of interest, and directors are expected to be mindful of their fiduciary obligations to the Company.
- Consulting Arrangements with Directors
The Board believes that the Company should not enter into paid consulting arrangements with outside directors or their employers, without obtaining the Board's approval. Such approval may, in appropriate circumstances, be granted on an annual basis.
- Share Ownership by Directors
The Board encourages equity ownership in the Company by directors, but believes the number of shares of the Company's stock owned by each director is a personal decision.
- Compensation Review
The Compensation Committee will annually review, and (when it deems appropriate) recommend to the full Board changes in, director compensation and benefits.
- Assessing Board and Committee Performance
The Board shall conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Board's self-evaluation shall be based, in part, on the Nominating/Corporate Governance Committee's assessment questionnaire.
- Access to Senior Management
Board members have complete and open access to senior members of management. The Chief Executive Officer shall invite key employees to attend Board sessions at which the Chief Executive Officer believes they can meaningfully contribute to Board discussion.
- Management Succession
The Nominating/Corporate Governance Committee shall develop management succession plans.
- Interaction with Third Parties
The Board believes that management should speak for the Company and that the Chairman should speak for the Board.
- Confidentiality
The Board believes maintaining confidentiality of information and deliberations is an imperative.
Committees of the Board
- Board Committees; Committee Charters
The Board currently has the following four Committees: the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance Committee and the Executive Committee. The Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee shall each consist of three or more directors, each of whom shall satisfy the independence (and, in the case of the Audit Committee, the financial literacy and experience) requirements of Section 10A of the Securities Exchange Act of 1934, the New York Stock Exchange and any other regulatory requirements.
Each Committee shall meet in executive session during each of its regularly scheduled meetings.
The Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee shall each have appropriate written charters. These committee charters will be made available on the Company's website at www.swst.com.
- Rotation of Committee Assignments and Chairpersons
Committee assignments and the designation of Committee chairpersons should be based on the director's knowledge, interests and areas of expertise. The Board does not favor mandatory rotation of Committee assignments or chairpersons. The Board believes experience and continuity are more important than rotation. Board members and chairpersons should be rotated only if rotation is likely to increase Committee performance.
- Frequency of Committee Meetings; Attendance
The Audit Committee has four regularly scheduled meetings each year. The Compensation Committee, the Nominating/Corporate Governance Committee and the Executive Committee each will meet as needed to perform their duties pursuant to their respective charters. Committee members are expected to be physically present at all regularly scheduled meetings. Conference telephone, videoconference or similar communication equipment attendance at a meeting will generally only be permitted if it is necessary to constitute a quorum.
Duties and Responsibilities of the Committees
- Executive Committee
During the intervals between Board meetings, the Executive Committee shall, except as otherwise provided in Sections 12, 13, 14 and 15 of the Bylaws, have and may exercise all the powers and authority of the Board in the management of the Company's business.
- Audit Committee
The Audit Committee has the powers and responsibilities set forth in its Charter (which is available on the Company's website at www.swst.com). The role of the Audit Committee is oversight. The members of the Audit Committee are not employees of the Company and may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Audit Committee to conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the Company's independent auditors.
- Compensation Committee
The Compensation Committee shall have the powers and responsibilities set forth in its Charter (which is available on the Company's website at www.swst.com).
- Nominating/Corporate Governance Committee
The Nominating/Corporate Governance Committee shall have the powers and responsibilities set forth in its Charter (which is available on the Company's website at www.swst.com).
Other Guidelines
- Confidential Voting
The Board has adopted a policy whereby shareholders' proxies are received by the Company's independent tabulators and the vote is certified by independent inspectors of election. Proxies and ballots that identify the vote of individual shareholders will be kept confidential from the Company's management and directors, except as necessary to meet legal requirements, in cases where shareholders request disclosure, or in a contested election.
- Disclosure of Corporate Governance Guidelines
These Corporate Governance Guidelines will be made available on the Company's website at www.swst.com.
Adopted May 22, 2003 |
|
SWS GROUP, INC.
Code of Business Conduct
and Ethics
Honesty and Integrity - Actions that instill trust
On the following pages you will find the SWS Group, Inc. Code of Business Conduct and Ethics (the "Code of Conduct"). This Code of Conduct was adopted by the Board of Directors (the "Board") of SWS Group, Inc. upon the recommendation of the Audit Committee (the "Audit Committee"). The Code of Conduct applies to all officers, directors, and employees of SWS Group, Inc. and its subsidiaries (collectively, the "Company") and is intended to inform employees, officers and directors of their ethical obligations to the Company. The Code of Conduct does not replace the guidelines articulated in the Employee Handbook, but is intended to augment the Employee Handbook in areas concerning certain ethical and legal obligations.
The Code of Conduct sets out the basic policy of the Company in a number of areas, such as conflicts of interest, securities trading, record keeping, and other areas of concern to the company and the public at large. The Code of Conduct is a product of the Company's commitment to honesty and it should be read and complied with in that spirit. The Code of Conduct is intended to promote:
- Honest and ethical conduct;
- Avoidance of conflicts of interest;
- Full, fair, accurate, timely, and understandable disclosure in the reports and documents that the Company files with, or submits to, the Securities and Exchange Commission, and in all other public communications made by the Company;
- Compliance with all applicable governmental laws, rules, and regulations;
- Prompt internal reporting of violations of the Code of Conduct; and
- Accountability for adherence to the Code of Conduct.
The Code of Conduct was designed to help reduce the risk of unethical and illegal conduct by employees of the Company by providing a clear statement of the basic standards to be followed in all of the Company's business activities. In addition to the policies specifically set out in the Code of Conduct and the other policies of the Company, employees, officers and directors are expected to be familiar with, and at all times comply with, all applicable laws, rules, and regulations. Further, you are expected to conduct all transactions in accordance with the highest ethical standards.
The Code of Conduct cannot anticipate every ethical or legal issue that may arise; nor is it feasible to attempt to define a course of action for every situation. However, each of you will be well served if you apply to every situation the basic principles of honesty, fairness, integrity, and compliance with the law.
The Code of Conduct includes a program for reporting suspected criminal activity or violations of the Company's policies. Each of you has the responsibility of reporting such violations, and failure to do so may result in disciplinary action. You will not be retaliated against in any way for reporting in good faith an actual or suspected violation.
It is important for each of you to understand that:
- You are personally responsible for your own conduct, for complying with all provisions of this Code of Conduct, and for properly reporting known or suspected violations;
- If you are ever in doubt as to how to handle a specific situation, you should discuss the matter with your supervisor, or another member of management prior to acting;
- If you are a supervisor or manager, you must set an example by your own actions, and use your best efforts to ensure that employees understand and comply with this Code of Conduct;
- No one has the authority or right to order, request or even influence you to violate this Code of Conduct or the law;
- Absent a waiver from the Audit Committee of the Board of Directors, you will not be excused for violating this Code of Conduct for any reason, even at the request of another person;
- Any attempt by any person to have another person violate this Code of Conduct, whether successful or not, is itself a violation of this Code of Conduct and may be a violation of law;
- Any retaliation or threat of retaliation against any person for refusing to violate this Code of Conduct or for reporting in good faith a violation or suspected violation of this Code of Conduct is itself a violation of this Code of Conduct and may be a violation of law;
- Each reported violation of this Code of Conduct will be investigated and each actual violation will constitute a valid ground for dismissal or other appropriate disciplinary action of the person violating this Code of Conduct and may result in civil or criminal action against that person; and
- This Code of Conduct is in addition to the rules and policies of the Company including those contained in the SWS Group, Inc. Employee Handbook (the "Employee Handbook").
This Code of Conduct should not be construed as a contract of employment and does not change any person's employment status with the Company.
Where the Code of Conduct requires a report to, or permission from, a supervisor, manager, officer, or director in conjunction with a particular action, a director or officer of the Company shall report to, or obtain permission from, the Audit Committee subject to the provisions of the Company’s Related Party Policies and Procedures.
The responsibility for creating a culture and environment in which ethical and legal behavior is respected and expected starts with the executive officers of the Company. The Company expects the executive officers to ensure that their own actions and directions are above reproach. It is imperative that the Company’s executive officers emphasize, in both their words and their actions, the importance of ethical decision making, compliance with all laws and regulations, and compliance with the Code of Conduct. Further, officers and managers are expected to encourage and foster open communication. Employees should be encouraged to ask questions in situations where they are in doubt as to the appropriate course of action, and to report violations of the laws, regulations, Code of Conduct, or other Company policies. All questions and reports should be taken seriously, responded to promptly, and resolved appropriately.
| Conflicts of Interest |
top |
The Company respects your rights to manage your affairs and investments and does not wish to impinge upon your personal lives. At the same time, you should always perform your job duties on the basis of the Company's best interests, independent of any personal considerations or relationships. Therefore, you must avoid any financial interest or other business relationship (such as with a competitor, supplier, or customer of the Company) that might interfere with the objective and effective performance of your job or be adverse to the interests of the Company. You should avoid any activity, association, or financial relationship that creates even the appearance of conflicting loyalties or interests. If you have any interest or relationship that might compromise or appear to compromise your duty of loyalty to the Company, you must disclose it to your supervisor. If you believe that unusual circumstances justify your engaging in an activity that may result in a conflict of interest, you may request in writing that your supervisor or the General Counsel review the situation and grant an exception. All employees, including officers, and directors of the Company are subject to the terms and conditions of the Company’s Related Party Policies and Procedures.
Investments. You are prohibited from investing in any of the Company's customers, suppliers, or competitors except (i) an investment of 2% or less of any publicly traded securities made on the same terms available to the general public, or (ii) an investment of less than 10% of any other entity, provided in either case that you are not an officer or director of such entity. This prohibition applies to all forms of investments made by you and your immediate families. In general, you should not have any financial interest in a customer, supplier, or competitor that could cause divided loyalty, or even the appearance of divided loyalty.
Family Relationships. If you wish to do business on behalf of the Company with a member of your family or with a company of which your relative is an officer, director, or principal, you must first disclose the relationship and obtain the prior written approval of your supervisor.
Outside Employment. You should inform your supervisor and the General Counsel if any outside employment is obtained. You are prohibited from engaging in any activity that competes with any activity of the Company or compromises its interests. This prohibition includes performing any services that create a conflict of interest, the unauthorized use of any company equipment, and the unauthorized use or application of any confidential trade information or techniques. In addition, you are not to conduct any outside business during paid working time.
Outside Directorships. Outside directorships can create a conflict of interest. Employees are prohibited from being a director or officer of another company or business without the prior written consent of the Company's Chief Executive Officer and Corporate Secretary. However, employees are encouraged to participate as directors or other elected positions of eleemosynary, religious and educational organizations for which only notice to the employee’s supervisor is required. Directors of the Company may hold outside directorships subject to any guidelines or restrictions established by the Company's Board of Directors or the Audit Committee of the Board of Directors.
Corporate Opportunities. You may not: (a) take for yourself personally opportunities that are discovered through the use of Company property, information or position; (b) use Company property, information or position for personal gain, or (c) compete with the Company. You owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.
Vendor Gift Policy. Your receipt of gifts when acting in your capacity as a Company representative can create the appearance of a conflict of interest because such gifts may be construed as attempts to influence the performance of your duties. Accordingly, you and/or members of your immediate family may not request or accept gifts, entertainment or other benefits of value received directly or indirectly from an existing or potential vendor other than as set forth in this policy. Such gifts should never include cash. Gifts of nominal or token value, such as an occasional meal or outing with a vendor motivated by commonly accepted business courtesies, may be accepted. However, in the event that the value of such gift exceeds $500.00, but is less than $1,000.00, you must disclose in writing (electronic or otherwise) to your supervisor or the General Counsel the receipt of such gift within two business days of such receipt. In the event that the value of the gift exceeds $1,000.00, such gift may not be accepted without the prior written approval (electronic or otherwise) of the General Counsel. The Company expects that you will use your best judgment when it comes to business gifts, favors or entertainment.
It is both illegal and against this Code of Conduct for any individual to profit from undisclosed information relating to the Company or any company with which we do business. If you are in possession of material inside information that the Company has not yet disclosed to the public, you may not purchase or sell any of the securities of the Company or "tip" others to trade in our stock. Also, if you have material inside information about any of the Company's suppliers, customers or any other company that we do business with, you may not purchase or sell securities of those companies or tip others to do so. Material inside information is defined as facts that have not been disclosed to the public that could influence a reasonable investor's decision to buy or sell a company's stock or other securities. Examples of inside material information include, but are not limited to:
- Events regarding the Company’s securities (such as repurchase plans, stock splits, changes in dividends, and public or private sales of additional securities);
- If you are ever in doubt as to how to handle a specific situation, you should discuss the matter with your supervisor, or another member of management prior to acting;
- Changes in control;
- Potential mergers, acquisitions, divestitures, tender offers, joint ventures, and significant changes in assets;
- Changes in directors or senior executive officers;
- Earnings information;
- Major litigation developments; and
- Bankruptcies or receiverships.
Any breach of your duties and responsibilities under the securities laws or this policy will subject you to disciplinary action, which may include termination.
The restrictions of this policy also apply to your family members and others living in your household. You are responsible for the compliance of such persons with securities laws and Company policy. Even the appearance of improper conduct must be avoided. Accordingly, you should never make a recommendation to anyone to buy, sell or hold Company stock.
| Confidential and Proprietary Information |
top |
You have an ethical and legal duty not to disclose confidential, non-public, proprietary information about the Company, and its customers, business partners, suppliers, distributors, and others with whom the Company does business. Confidential information includes all non-public information that you have access to during the course of your work or as a result of your relationship with the Company, particularly information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. All client information including, in most instances, the mere fact that the person or entity is a client is confidential information.
You are responsible for ensuring that such information is not made available to unauthorized persons. You should remember that unauthorized persons may include your co-worker. Accordingly, you should discuss confidential, non-public and proprietary information only with those persons you know to be authorized to receive, and that have a need to know the information. Protection of the Company's confidential business information is vital to our success and growth in the competitive industry in which we work.
Business information that has not been made public shall not be released to private individuals, organizations, or governmental bodies unless authorized by the Company or demanded by legal process such as a subpoena or court order. You shall not use confidential information obtained in the course of your employment for the purpose of advancing any private interest or otherwise for personal gain.
Certain documents and other records pertaining to the Company's business must be maintained for specific periods of time for possible review by regulatory authorities. Company documents (such as, contracts, agreements, licenses, accounting records, correspondence and memoranda), including electronic documents, should be discarded or destroyed only in accordance with Company policy, or upon approval of the General Counsel. If you have any question about the propriety of discarding or destroying a document, please check with the General Counsel prior to discarding or destroying such documents.
Additionally, the Company will receive from time to time requests from third parties for documents relating to our business. Once the Company has received such a request, the Company is often prohibited by law from destroying any document that would be responsive to such request. If you become aware that we have received such a document request, you must not discard or destroy any requested or related documents until you have been advised in writing by the General Counsel that you are permitted to do so.
| Accuracy of Financial Records |
top |
It is Company policy to record and report factual information honestly and accurately. Intentional conduct violating this policy is a serious offense and will subject you to severe discipline by the Company, as well as possible criminal and civil penalties.
Investors count on the Company to provide accurate information about its businesses and to make responsible business decisions based on reliable records. Every individual involved in creating, transmitting or entering information into the Company’s financial and operational records is responsible for doing so fully, accurately and with appropriate supporting documentation. You may not make any entry that intentionally hides or disguises the true nature of any transaction. For example, you may not understate or overstate known liabilities and assets, record false sales or record them early, defer or accelerate the proper period for recording items that should be expensed, falsify quality or safety results, or process and submit false or inaccurate invoices or expense reports.
Compliance with established accounting procedures, the Company's system of internal controls, and generally accepted accounting principles is necessary at all times. In order to achieve such compliance, the Company's records, books, and documents must accurately reflect all transactions and provide a full account of the Company's assets, liabilities, revenues and expenses. Knowingly entering inaccurate or fraudulent information, or failing to enter material information, into the Company's accounting system is unacceptable and may be illegal. If you have knowledge that an entry or process is false you are expected to consult your supervisor or, if necessary, the Chief Financial Officer or a member of the Audit Committee. In addition, it is your responsibility to give your full cooperation to the Company's authorized auditors.
Every employee should deal fairly and in good faith with the Company's customers, stockholders, employees, suppliers, regulators, business partners, competitors and others. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged or confidential information, misrepresentation, fraudulent behavior or any other unfair dealing practice.
Company policy prohibits fraud and establishes procedures to be followed for the recognition, reporting and investigation of suspected fraud. Fraudulent behavior includes, but is not limited to:
- Fraudulent or dishonest conduct;
- Forgery or alteration of negotiable instruments or Company documents;
- Misappropriation of any Company, employee, customer, partner or supplier assets;
- Conversion to personal use of cash, securities, supplies or any other Company assets;
- Unauthorized handling or reporting of Company transactions; and
- Falsification of Company records or financial statements.
Any employee, who suspects that any fraudulent activity may have occurred, should report such concern to his or her supervisor.
| Use and Care of Company Resources/Assets |
top |
All equipment, supplies, software, and other assets used in the Company's business must be treated with due care and used for authorized purposes only. You are responsible for ensuring that all equipment and supplies issued to you are properly used and maintained. Any unauthorized use of Company equipment, supplies or software is prohibited by Company policy. You must never make unauthorized copies of any Company software or remove any Company equipment or other Company assets from Company premises without prior authorization from your supervisor or the Human Resources Department.
It is Company policy to make full, fair, accurate, timely, and understandable public disclosure of all Company information required to be disclosed by law, regulation, New York Stock Exchange Rules, and sound business policy. In order to ensure that all disclosures of Company information (such as earnings information and other developments of material importance to investors, regulators and the general public) are accurate and fully comply with the law, it is Company policy that all such disclosures will be made only through specifically established Company channels.
Unless you have been specifically authorized to do so by the Company, you are strictly prohibited from discussing Company affairs with shareholders, security analysts, media representatives, governmental officials, and other outsiders. Should you be contacted for an interview or should anyone seek any Company information from you, whether or not confidential or proprietary, you should immediately report such request to the Vice President – Corporate Communications. If you suspect or believe that there has been an unintentional disclosure of material nonpublic information, you are required to immediately contact the Vice President – Corporate Communications or the General Counsel.
If you are authorized to make public or nonpublic disclosures of Company information you shall do so strictly in accordance with the above principles of full, fair, accurate, timely, and understandable disclosure in compliance with all laws and regulations.
| Procedure for Reporting and Investigating Violations |
top |
It is your personal responsibility to report suspected criminal activity or violations of the Code of Conduct. While reports of possible or suspected violations should typically be made to your supervisor, in those circumstances where that is not practical, you may report such violation to any other management employee or submit such reports anonymously. A report that an officer or director of the Company may have violated the Code of Conduct or participated in any criminal activity should be made to the Audit Committee of the Board of Directors or to any member of such committee.
Reports may be made verbally or in writing. Verbal reports will be written up, and the reporting individual will be asked to review and confirm the write-up.
Individuals writing a report of suspected criminal activity or violations of the Code of Conduct should attempt to provide as much factual detail as possible about the incident(s) being reported, including time(s), location(s) and the person or people involved. All reports will be taken seriously and investigated. Please do not report mere rumors.
The General Counsel is responsible for investigating all reported violations and confirming whether or not a violation of the Code has actually occurred. If a violation of the Code has occurred, the General Counsel, together with the supervisor and department head of the violator and the Director of Human Resources shall determine what, if any, disciplinary action is appropriate. The General Counsel, together with any officers of the Company deemed appropriate by the General Counsel, shall also determine what, if any, corrective actions are necessary to mitigate or prevent any harm done by the violation and to prevent any future violations of a similar nature. The General Counsel must immediately report any violation by an officer or director of the Company to the chairman of the Audit Committee of the Board of Directors. The chairman of the Audit Committee, in conjunction with the members of the Audit Committee and management will determine what, if any, disciplinary action and corrective measures are appropriate. The General Counsel will provide a quarterly report to the Audit Committee listing the types and numbers of violations and any other detail requested by the Audit Committee. The Audit Committee may, at any time, require that certain specified violations be reported immediately to the Audit Committee to be dealt with by such Committee, rather than by the General Counsel. In addition, the Audit Committee will investigate, or delegate to another officer of the Company the investigation of any reported violations for which an investigation by the General Counsel is not appropriate.
NO RETALIATORY ACTION
No retaliatory action will be taken against persons who report in good faith suspected criminal activity or violations of the Code of Conduct.
Only the Audit Committee of the Board of Directors may make any waiver of the Code of Conduct for executive officers or directors.
| Statement of Compliance |
top |
Certification
I have read and understand the Code of Conduct and agree to comply with it. I understand that failure to comply with the Code of Conduct or to respond truthfully to this Statement of Compliance will be a basis for disciplinary action, up to and including dismissal.
Except as stated in the Disclosure section below:
- I do not know of any interest or business relationship of my family members or mine that conflicts with the provisions of the Code of Conduct.
- I do not know of any other activity or set of circumstances that is a violation of the Code of Conduct
Disclosure
The information provided below discloses circumstances which may be a violation of the Code of Conduct or possible conflict of interest (including, for me and my family members, the ownership of an interest in another business or other business relationship that may constitute a "Conflict of Interest"). See Section 3 of the Code of Conduct.
Honesty and Integrity - Actions that instill trust |
|
SWS GROUP, INC.
Anonymous Reporting Hotline
Report It
Have you noticed an issue of workplace misconduct such as theft, fraud, dishonesty, harassment, unethical
behavior or improper accounting practices? Then we urge you to report it.
You are never required to provide any personal identifying information to access the system online or by
telephone - it is all done by access code. The hotline and the Website link are completely confidential, and
are administered by an independent third-party to ensure full anonymity for anyone who uses them. The
toll-free hotline number, and the link to file a report online are both available 24 hours a day, 365 days a
year.
Call the hotline number 877-778-5463, give your username (swsgroup), and password (swsgroup),
and the operator with the reporting service will help you submit your report. The operator then files the
report and sends it to the company for you so that you may maintain complete anonymity. You will never have to
speak to anyone affiliated with SWS Group, and no one at the company will ever contact you, it will all be
done through the reporting service.
You may also file a report from any computer with online access. Go to www.reportit.net
and click on the Report it Online button, enter your username (swsgroup), and password (swsgroup).
Simply type in your answers to the given questions to submit your anonymous report. Try to be as clear and
complete as possible so that your concerns may be properly and thoroughly investigated.
|
|
|