Audit Committee
The Company has reconstituted an Audit Committee. The Audit
Committee has retained Michael C. Eberhardt, (Former Sp. Atty.,
U. S. Dept. of Justice, Joint Strike Force, S. D. N. Y) as
counsel to the Committee. Mr. Eberhardt is a former federal
prosecutor handling organized crime and corruption cases, and served
in senior management positions in Inspector General Offices at two
federal agencies. He has substantial investigative and compliance
experience through his Inspector General positions and his
affiliation with two large Washington, D.C. law firms where he
assisted in the implementation of codes of ethics and compliance
programs for large government contractors. He has also served as
General Counsel and Secretary to a Fortune 500 Company where he
served on the corporate Ethics Board. Mr. Eberhardt is assisting the
Audit Committee in updating the FIRSTPLUS code of ethics and
strengthening internal controls, as well as aiding the Audit
Committee and the Company in providing all necessary assistance to
the Department of Justice and its current investigation.
Audit Committee Recommendations
Code of Ethics
Introduction
FirstPlus Financial Group, Inc.'s
reputation for honesty and integrity is the sum of the personal
reputations of our directors, officers and employees. To protect
this reputation and to promote compliance with laws, rules and
regulations, this Code of Ethics has been adopted by our Board of
Directors.
This Code sets out the basic
standards of ethics and conduct to which all of our directors,
officers and employees are held. These standards are designed to
deter wrongdoing and to promote honest and ethical conduct, but will
not cover all situations. If a law or employment agreement conflicts
with a policy in this Code, you must comply with the law or
employment agreement; however, if a local custom or policy conflicts
with this Code, you must comply with the Code.
If you have any doubts whatsoever as
to the propriety of a particular situation, you should submit it in
writing to FirstPlus Financial Group, Inc.'s President, with a copy
to the Company’s Audit Committee. The President will review the
situation and take appropriate action in keeping with this Code, our
other corporate policies, and the applicable law. The President
shall report to the Company’s Audit Committee in writing the action
taken in response to any allegations of violation of this Policy. If
your concern relates to the President, you should submit your
concern, in writing, to the Company's Audit Committee.
1. Honest and Ethical Conduct
For directors, officers and
employees, we, as a Company, require honest and ethical conduct from
everyone subject to this Code. Each of you has a responsibility to
all other directors, officers and employees of FirstPlus Financial
Group, Inc., and to FirstPlus Financial Group, Inc. itself, to act
in good faith, responsibly, with due care, competence and diligence,
without misrepresenting material facts or allowing your independent
judgment to be subordinated. In essence, you are expected to conduct
yourself in a manner that meets with our ethical and legal
standards.
2. Compliance with Laws, Rules and
Regulations
For directors, officers and
employees, you are required to comply with all applicable
governmental laws, rules and regulations, both in letter and in
spirit. Although you are not expected to know the details of all
applicable laws, rules and regulations, we expect you to seek advice
from FirstPlus Financial Group, Inc.'s President, who may seek
advice from legal counsel, if you have any questions about whether
the requirement applies to the situation or conduct that may be
required to comply with any law, rule or regulation.
3. Conflicts of Interest
For directors, officers and
employees, you must handle in an ethical manner any actual or
apparent conflict of interest between your personal and business
relationships. Conflicts of interest are prohibited as a matter of
policy. A "conflict of interest" exists when a person's private
interest interferes with the interests of FirstPlus Financial Group,
Inc. For example, a conflict situation arises if you or a member of
your family receives an improper personal benefit as a result of
your position with FirstPlus Financial Group, Inc. If you become
aware of any material transaction or relationship that reasonably
could be expected to affect a conflict of interest, you should
report it promptly to FirstPlus Financial Group, Inc.'s President.
Conflicts of interest are prohibited as a matter of Company policy,
except under guidelines set forth in the Company By-Laws or approved
by the Board of Directors.
4. Public Disclosures
For directors, officers and
employees, it is FirstPlus Financial Group, Inc.'s policy to provide
disclosure in accordance with applicable law in all reports and
documents that we file with, or submit to, the Securities and
Exchange Commission (the "Commission") and in all other public
communications made by FirstPlus Financial Group, Inc.
5. Confidentiality
For directors, officers and
employees, you should maintain the privacy of all confidential
information entrusted to you by FirstPlus Financial Group, Inc. or
by persons with whom FirstPlus Financial Group, Inc. does business,
except when disclosure is authorized or legally mandated.
Confidential information includes all non-public information that
might be of use to competitors of, or harmful to, FirstPlus
Financial Group, Inc., customers, or persons with whom FirstPlus
Financial Group, Inc. does business, if disclosed.
6. Insider Trading
If you have access to material,
non-public information concerning FirstPlus Financial Group, Inc.,
you are not permitted to use or share that information for stock
trading purposes, or for any other purpose except the conduct of
FirstPlus Financial Group, Inc.'s business. All non-public
information about FirstPlus Financial Group, Inc. should be
considered confidential information. Insider trading, which is the
use of material, non-public information for personal financial
benefit or to "tip" others who might make an investment decision on
the basis of this information, is not only unethical but also
illegal. The prohibition on insider trading applies not only to
FirstPlus Financial Group, Inc.'s securities, but also applies to
securities of other companies should you learn of material,
non-public information about these companies in the course of your
duties to FirstPlus Financial Group, Inc. "Insider trading"
violations may subject you to criminal or civil liability, in
addition to disciplinary action by FirstPlus Financial Group, Inc.
In order to comply with these requirements, FirstPlus Financial
Group, Inc. has implemented a Policy and Procedures Governing Sales
and Purchases of Company Securities by Insiders.
7. Interpretations and Waivers of
the Code of Business Conduct and Ethics
As directors, officers and employees,
if you are uncertain whether a particular activity or relationship
is improper under this Code or requires a waiver of this Code, you
should disclose it to FirstPlus Financial Group, Inc.'s President,
who will determine first whether a waiver of this Code is required
and second, if required, whether a waiver will be granted. You may
be required to agree to conditions before a waiver or a continuing
waiver is granted. However, any waiver of this Code for an executive
officer or director may be made only by FirstPlus Financial Group,
Inc.’s Audit Committee and will be promptly disclosed to the extent
required by applicable law, rule or regulation.
8. Related Party Conduct
Related party relationship or related party conduct is a type of
conflict of interest which exists when an employee, relative of an
employee (a spouse, child, parent, sibling, grandparent, grandchild,
aunt, uncle or corresponding in-law or "step" relation), or any
person(s) occupying the same household has a direct or indirect
ownership interest in any business proposed to be engaged, or
engaged in by FirsPlus Financial Group, Inc. The direct or indirect
receipt of any vendor, distributor, manufacturer or customer
payments, gifts or favors through a related party vendor,
distributor, manufacturer or customer relationship as defined in
"Related Party Relationships" is strictly prohibited.
Examples of a direct or indirect ownership interest are as follows:
a financial investment in the vendor, manufacturer, distributor,
customer or supplier, employment by the vendor, manufacturer,
distributor, customer or supplier of a relative or person occupying
the same household and participation in other business opportunities
with the vendor, manufacturer, distributor or supplier. Owning less
than five percent (5%) of the shares in a company listed on a major
stock exchange is not considered a "conflict of interest."
Participation with a manufacturer, distributor, customer, supplier
or vendor in an investment or outside business opportunity should be
avoided.
Employees are under continuing obligation to
disclose any situation that presents the possibility of a conflict
of interest. An employee who has a conflict of interest or related
party relationship must obtain approval from the Company’s Audit
Committee prior to the employee or the employee’s department
entering into a relationship with the manufacturer, distributor,
customer, vendor or supplier. In order to obtain Audit Committee
review please refer to the Company’s Procedures Regarding Related
Party Transactions.9. Reporting any Illegal or Unethical
Behavior
Any report or allegation of a violation this Code need not be signed
and may be sent to FirstPlus Financial Group, Inc.'s President
anonymously. A copy of any such reports shall also be sent to the
Company’s Audit Committee. All reports of violations of this Code,
including reports sent anonymously, will be promptly investigated
and, if found to be accurate, acted upon in a timely manner and any
actions taken shall also be reported to the Company’s Audit
Committee in writing. If any report of wrongdoing relates to
accounting or financial reporting matters, or relates to persons
involved in the development or implementation of FirstPlus Financial
Group, Inc.’s system of internal controls, a copy of the report will
also be promptly provided to the Board of Directors, which may
participate with the Audit Committee in the investigation and
resolution of the matter. It is the policy of FirstPlus Financial
Group, Inc. not to allow actual or threatened retaliation,
harassment or discrimination due to reports of misconduct by others
made in good faith by employees. Employees are expected to cooperate
in internal investigations of misconduct.10. Compliance
Standards and Procedures
This Code is intended to be a statement of basic principles and
standards and does not include specific rules that apply to every
situation. Its contents must be viewed within the framework of
FirstPlus Financial Group, Inc.'s employment agreements, other
policies, practices, instructions as well as the requirements of the
law. This Code is in addition to other policies, practices or
instructions of FirstPlus Financial Group, Inc. that must be
observed. Moreover, the absence of a specific corporate policy,
practice or instruction covering a particular situation does not
relieve you of the responsibility for exercising ethical standards
applicable to the circumstances.
Violation of any of the
standards contained in this Code, or in any other policy, practice
or instruction of FirstPlus Financial Group, Inc., can result in
disciplinary actions, including dismissal and civil or criminal
action against the violator. This Code should not be construed as a
contract of employment and does not change any employment agreement
or any person's status as an at-will employee
.
This Code is
for the benefit of FirstPlus Financial Group, Inc., and no other
person is entitled to enforce this Code. This Code does not, and
should not be construed to, create any private cause of action or
remedy in any other person for a violation of the Code.
FIRSTPLUS FINANCIAL
GROUP, INC.
POLICY AND
PROCEDURES GOVERNING SALES AND PURCHASES OF COMPANY SECURITIES BY
INSIDERS
PURPOSE
In order to comply with federal and state securities
laws governing (a) trading in an issuer’s securities while in the
possession of “material nonpublic information” concerning the
issuer, and (b) disclosure of material nonpublic information about
an issuer to outsiders, and in order to prevent even the appearance
of improper insider trading or tipping, FirstPlus Financial Group,
Inc. (the “Company”) has adopted this Policy for all of its
directors, officers and employees, their immediate family members
and specially designated outsiders who have access to the Company’s
material nonpublic information.
SCOPE
This Policy
covers all directors, officers and employees of the Company and
their immediate family members (collectively referred to as
“Insiders”), and any outsiders that may be designated by the Company
as Insiders because they have access to material nonpublic
information concerning the Company.Except as provided in Section V
below, this Policy applies to any and all transactions in the
Company’s securities, including its Common Stock and options to
purchase Common Stock, and any other type of securities that the
Company may hereafter issue, such as preferred stock, convertible
debentures, warrants and options or other derivative securities.All
directors, officers, employees and designated outsiders shall comply
with this Policy’s terms.
DEFINITION OF “MATERIAL NONPUBLIC
INFORMATION”
“MATERIAL” INFORMATION
Information about the
Company is “material” if it would be expected to affect the
investment or voting decisions of the reasonable shareholder or
investor, or if the disclosure of the information would be expected
to significantly alter the total mix of the information in the
marketplace about the Company. In simple terms, material information
is any type of information that could reasonably be expected to
affect the price of Company securities. While it is not possible to
identify all information that would be deemed “material,” the
following types of information ordinarily would be considered
material:
Financial performance, especially quarterly and
year end earnings, and significant changes in financial performance
or liquidity;
Potential mergers and acquisitions or the sale of
Company assets or subsidiaries;
New significant contracts,
orders, customers, or finance sources, or the loss
thereof;Significant policy pricing changes;
Stock splits and
extraordinary dividends;Public or private securities/debt offerings;
Significant changes in senior management; andActual or
threatened major litigation or the resolution of such litigation.
“NONPUBLIC” INFORMATION
Material information is
“nonpublic” if it has not been widely disseminated to the public
through major newswire services, national news services and
financial news services. For the purposes of this Policy,
information will be considered public, i.e., no longer “nonpublic,”
after the close of trading on the second full trading day following
the Company’s widespread public release of the information.
STATEMENT OF COMPANY POLICY AND PROCEDURES
PROHIBITED ACTIVITIES
No Insider may trade in Company securities without following the
procedures set forth in Section IV.C below.
Except as provided in
Section V below, no Insider may trade in Company securities while
possessing material nonpublic information concerning the Company.
The fact that a trade may have been approved does not excuse a
violation of law. It is ultimately the Insider’s responsibility not
to trade in the Company’s securities while in possession of material
nonpublic information concerning it.
Except as provided in
Section V B below, no Insider may trade in Company securities during
any trading blackout period designated by the President.
The
President may not trade in Company securities unless the trade has
been approved by the Chief Executive Officer and Securities Counsel
of the Company in accordance with the procedures set forth in
Section IV.C below. The Chief Executive Officer may not trade in
Company securities unless the trade has been approved by the
President and Securities Counsel of the Company in accordance with
the procedures set forth in Section IV.C below.
No Insider
may “tip” or disclose material nonpublic information concerning the
Company to any non-Insider (including analysts, individual investors
and members of the investment community and news media), unless
required as part of that Insider’s regular duties for the Company
and authorized by the President or the Chief Executive Officer. In
any instance in which such information is disclosed to outsiders,
the Company will take such steps as are necessary to preserve the
confidentiality of the information, including requiring the outsider
to agree in writing to comply with the terms of this Policy and/or
to sign a confidentiality agreement. All inquiries from outsiders
regarding material nonpublic information about the Company must be
forwarded to the President or the Chief Executive Officer.
No
Insider may give trading advice of any kind about the Company to
anyone while possessing material nonpublic information about the
Company, except that Insiders should advise others not to trade if
doing so might violate the law or this Policy. The Company strongly
discourages all Insiders from giving trading advice concerning the
Company to third parties even when Insiders do not possess material
nonpublic information about the Company.
No Insider may trade in
any interest or position relating to the future price of Company
securities, such as a put, call or short sale.
TRADING
BLACKOUT PERIODS
Trading Blackout Periods. From time to time,
the President may announce trading blackout periods. Such
designation may specify the duration of the period or may require
that Insiders refrain from trading in Company securities until a
further announcement that the special trading blackout period has
ended. No Insider may disclose to any non-Insider that a trading
blackout period has been designated.
Announcements of
Trading Blackout Periods. All trading blackout periods and the
termination of trading blackout periods will be announced by
Company-wide electronic mail.
Exceptions for Hardship and
Expiring Option Cases. The President may, after consultation with
Securities Counsel, on a case-by-case basis, authorize trading in
Company securities during a trading blackout period due to financial
or other hardships or when an Insider’s stock option is about to
expire, but only in accordance with the procedures set forth in
Section IV.C.
PROCEDURES FOR APPROVAL
Clearance by
President. Each proposed trade in Company securities and each Rule
10b5-1 sales plan proposed to be adopted by an Insider (referred to
in Section V) must be approved in writing by the President. A
request for approval must be submitted in writing in the applicable
form attached to this Policy, either in paper or electronically. The
request should be submitted as far in advance of the proposed
trade/adoption as practicable, but in any event should be submitted
not less than two days in advance of the proposed trade/adoption.
The President shall consult with Securities Counsel on each proposed
trade in Company securities. A copy of each approval should be sent
to the Audit Committee.
No Obligation to Approve Trades. The
existence of the foregoing approval procedure does not in any way
obligate the President to approve any trades or sales plans. The
President may reject any request in his/her sole discretion based
upon either or both of securities laws requirements and the
Company’s business needs.
Approval by Chief Executive
Officer. In the absence or unavailability of the President, all
proposed trades in Company Securities must be approved by the Chief
Executive Officer in accordance with this Section IV.
SALES
UNDER RULE 10b5-1 SALES PLANS
Anything contained in this
Policy to the contrary notwithstanding, sales of Company securities
pursuant to a sales plan adopted by an Insider, which plan conforms
to the requirements of Rule 10b5-1 under the Exchange Act and is
approved by the President, shall be exempt from the provisions of
this Policy.
POTENTIAL CIVIL, CRIMINAL AND DISCIPLINARY
SANCTIONS
CIVIL AND CRIMINAL PENALTIES
The consequences of
prohibited insider trading or tipping can be severe. Persons
violating insider trading or tipping rules may be required to
disgorge the profit made or the loss avoided by the trading, pay the
loss suffered by the person who purchased securities from or sold
securities to an insider tippee, pay civil penalties up to three
times the profit made or loss avoided, pay a criminal penalty of up
to $1 million, and serve a jail term of up to 10 years. The Company
and/or the supervisors of the person violating the rules may also be
required to pay major civil or criminal penalties.
COMPANY
DISCIPLINE
Violation of this Policy or federal or state
insider trading laws by any director, officer or employee, or their
family members, may subject the director to removal and the officer
or employee to disciplinary action by the Company up to and
including termination for cause.
REPORTING OF VIOLATIONS
Any Insider who violates this Policy or any federal or state
laws governing insider trading or tipping, or knows of any such
violation by any other Insiders, must report the violation
immediately to the President. Upon learning of any such violation,
the President, in consultation with Securities Counsel, will
determine whether the Company should release any material nonpublic
information, or whether the Company should report the violation to
the SEC or other appropriate governmental authority.
INQUIRIES
Please direct all inquiries regarding any of the
provisions of or procedures under this Policy to the President.
APPLICATION AND
APPROVAL FOR TRADING BY A FIRSTPLUS FINANCIAL GROUP, INC. INSIDER
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Type of Security to be
Traded:
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Type of Trade
(Purchase/Sale):
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Number of Shares to be
Traded:
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CERTIFICATION
I, ____________________________,
hereby certify that (i) I am not in possession of any “material
nonpublic information” concerning the Company (as defined in the
Company’s “Policy and Procedures Governing Sales and Purchases of
Company Securities by Insiders”) and (ii) to the best of my
knowledge, the proposed trade(s) listed above do(es) not violate
trading restrictions under securities laws applicable to me. I
understand that if I trade while possessing such information or in
violation of such trading restrictions, even if this application is
approved, I may be subject to severe civil and/or criminal
penalties, and may be subject to discipline by the Company up to and
including termination for cause.
REVIEW AND DECISION
The undersigned hereby certifies
that I have reviewed the
foregoing application and ______APPROVE _______PROHIBIT the proposed
trade(s).
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President
(or Designee)
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Date
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APPLICATION AND APPROVAL FOR ADOPTION OF A RULE
10b5-1 PLAN BY A FIRSTPLUS FINANCIAL GROUP, INC. INSIDER
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Proposed Plan Adoption Date:
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Type of Security to be
Traded:
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Number of Shares Covered
under Plan:
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CERTIFICATION
I, ____________________________, hereby certify that
(i) attached to this Application is a true and correct copy of the
Rule 10b5-1 Sales Plan proposed to be adopted by me, (ii) I am not
in possession of any “material nonpublic information” concerning the
Company (as defined in the Company’s “Policy and Procedures
Governing Sales and Purchases of Company Securities by Insiders”)
and (iii) to the best of my knowledge, adoption by me of proposed
Plan does not violate trading restrictions under securities laws
applicable to me. I understand that if I trade in violation of such
trading restrictions, even if this application is approved, I may be
subject to severe civil and/or criminal penalties, and may be
subject to discipline by the Company up to and including termination
for cause.
REVIEW AND DECISION
The undersigned hereby certifies
that I have reviewed the
foregoing application and ______APPROVE _______PROHIBIT the proposed
Plan.
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President
(or Designee)
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Date
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FirstPlus Financial Group, Inc.
Procedures Regarding Related Party
Transactions
A. Introduction
The Board of Directors
of FirstPlus Financial Group, Inc. (“FPFG”) recognizes that related
party transactions present a heightened risk of conflicts of
interest and/or improper valuation (or the perception of this risk)
and, therefore, has adopted these procedures for the review,
approval or ratification of Related Party Transactions (as defined
below). These procedures shall be utilized, to the extent
appropriate, in conjunction with FPFG’s Code of Ethics.
B. Definitions
In these procedures, a "Related Party" is:
-
An executive officer (as designated by the Board of Directors)
or a member of the Board of Directors of FPFG,
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a shareholder owning in excess of five percent of the
outstanding voting securities of FPFG (or its controlled
affiliates),
-
a person who is an immediate family member of an executive
officer of a member of the Board of Directors, or
-
an entity that is owned or controlled by someone listed in 1, 2
or 3 above, or an entity in which someone listed in 1, 2 or 3
above has a substantial ownership interest or control of such
entity.
In these procedures, a "Related Party Transaction" is any
transaction between FPFG an any Related Party:
-
that requires disclosure under item 404(a) of Regulation S-K
under the Securities Exchange Act of 1934 ("Transactions with
Related Persons"), or
-
that constitutes a "related party relationship" as defined below
C. Related Party
Relationship
A related party
relationship is a type of conflict of interest which exists when an
employee, relative of an employee (a spouse, child, parent, sibling,
grandparent, grandchild, aunt, uncle or corresponding in-law or
"step" relation), or any person(s) occupying the same household has
a direct or indirect ownership interest in any business proposed to
be engaged, or engaged in by FPFG.
D. Audit Committee
Review, Approval and Ratification
Except as described in
Section E. below, the Board of Directors has determined that the
Audit Committee is best suited to review, approve and ratify Related
Party Transactions.
At a meeting occurring
during the first quarter of each fiscal year, the Audit Committee
will review potential Related Party Transactions that occurred
during the prior fiscal year, as well as any potential Related Party
Transactions proposed to be entered into for the then current fiscal
year. In connection with its review, the Audit Committee will
examine the proposed aggregate value of each transaction (if
applicable) and any direct or indirect material interest of the
parties to the transaction. Based on this review, the Audit
Committee will determine whether each of these transactions
constitutes a Related Party Transaction.
If the Audit Committee
determines that a transaction constitutes a Related Party
Transaction, the Audit Committee will then review the terms and
substance of the transaction to determine whether to ratify the
Related Party Transaction (if the transaction occurred in the
previous fiscal year and had not been previously approved) or to
approve the Related Party Transaction (if the transaction is
proposed to be entered into). In connection with its review of the
Related Party Transaction, the Audit Committee will consider:
-
whether the transaction is on terms
comparable to those that could be obtained in arm’s length
dealings with an unrelated third party,
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whether the
transaction constitutes a “conflict of interest” as defined in
PRO’s Code of Ethics, and
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such other factors
as the Audit Committee deems relevant.
In the event that
management or a member of the Board of Directors recommends that
FPFG enter into any Related Party Transactions after the meeting of
the Audit Committee described above, these transactions will
thereafter be presented to the Audit Committee for its review and
approval (unless otherwise approved under Section E. below).
E. Consummation or
Continuation of a Related Party Transaction
Under these
procedures, a Related Party Transaction will be consummated or will
continue only if:
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The Audit
Committee approves or ratifies the transaction in accordance
with the procedures described above,
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the transaction is
approved by the disinterested members of the Board of Directors,
or
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the transaction
involved compensation approved by FPFG's Compensation Committee
F. Disclosure
All Related Party
Transactions are to be disclosed in PRO’s applicable filings as
required by the Securities Act of 1933 and the Securities Exchange
Act of 1934 and related rules.
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