

We have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands. Therefore, we are exempt from many of Nasdaq's corporate governance practices.
We have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands. Therefore, we are exempt from many of Nasdaq's corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification to Nasdaq of non-compliance with Nasdaq corporate governance practices, prohibition on disparate reduction or restriction of shareholder voting rights, and the establishment of an audit committee satisfying Nasdaq Listing Rule 5605(c)(3) and ensuring that such audit committee's members meet the independence requirement of Listing Rule 5605(c)(2)(A)(ii). The practices we follow in lieu of Nasdaq's corporate governance rules applicable to U.S. domestic issuers are as follows:
As a foreign private issuer, we are not required to have an audit committee comprised of at least three members. Our audit committee is comprised of two members.
As a foreign private issuer, we are not required to adopt a formal written charter or board resolution addressing the nominations process. We do not have a nominations committee, nor have we adopted a board resolution addressing the nominations process.
As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present.
In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the Marshall Islands Business Corporations Act, which allows the Board of Directors to approve share issuances.
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us between 150 and 180 days advance notice to properly introduce any business at a meeting of shareholders.
Other than as noted above, we are in compliance with all other Nasdaq corporate governance standards applicable to U.S. domestic issuers.
The Board of Directors (the “Board”) of Performance Shipping Inc. (the “Company”) has adopted this Code of Business Conduct and Ethics (this “Code”), which is applicable to all employees, directors, officers, and agents of the Company and its subsidiaries.
Effective: February 22, 2023
The Board of Directors (the “Board”) of Performance Shipping Inc. (the “Company”) has adopted this Code of Business Conduct and Ethics (this “Code”), which is applicable to all employees, directors, officers, and agents of the Company and its subsidiaries, including employees, directors, officers, and agents of the Company’s manager, Unitized Ocean Transport Limited (each, an “Employee”), to:
This Code may be amended and modified by the Board.
All Employees are required to be familiar with this Code, comply with its provisions, and report any suspected violations as described below in the section entitled “Internal Reporting.”
Conflicts of Interest
A conflict of interest occurs when an Employee’s private interests interfere, or even appears to interfere, with the Company’s interests as a whole. While it is not possible to describe every situation in which a conflict of interest may arise, Employees must never use or attempt to use their position with the Company to obtain improper personal benefits. Any Employee, who is aware of a conflict of interest or is concerned that a conflict might develop, should immediately discuss the matter with the Chairman of the Audit Committee.
Loans by the Company to, or guarantees by the Company of obligations of, Employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of obligations of, any director or executive officer are expressly prohibited.
Directors and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from the Audit Committee.
Corporate Opportunities
Employees owe a duty to advance the legitimate interests of the Company when the opportunities to do so arise. Employees may not personally take opportunities that are discovered through the use of corporate property, information, or position.
Confidentiality and Privacy
Employees must protect and maintain the confidentiality of Company information entrusted to them by the Company or by its customers, suppliers or partners, except when disclosure is expressly authorized or is required or permitted by law. Employees may have access to proprietary and confidential information concerning the Company’s business, clients, and suppliers. Confidential information includes such items as non-public information concerning the Company’s business, financial results, and potential corporate transactions. Employees are required to keep such information confidential during employment as well as thereafter, and not to use, disclose, or communicate that confidential information other than in the course of employment. The consequences to the Company and the Employee concerned can be severe where there is an unauthorized disclosure of any non-public, privileged, or proprietary information.
To ensure the confidentiality of any personal information collected and to comply with applicable laws, any Employee in possession of non-public, personal information about the Company’s customers, potential customers, or Employees, must maintain the highest degree of confidentiality and must not disclose any personal information unless authorization is obtained.
Honest and Fair Dealing
It is the Company’s longstanding policy to conduct its business fairly and honestly at all times in accordance with the highest ethical standards. Employees must endeavor to deal honestly, ethically, and fairly with the Company’s customers, suppliers, competitors, and employees. No Employee shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice. Stealing proprietary information or otherwise possessing trade secrets obtained by any means without the owner’s consent is prohibited. Honest conduct is considered to be conduct that is free from fraud or deception. Ethical conduct is considered to be conduct conforming to accepted professional standards of conduct. The Company has adopted an Anti-Fraud Policy and Fraud Response Plan, which all Employees should read, understand, and comply with.
Protection and Proper Use of Company Assets
The Company’s assets are only to be used for legitimate business purposes and only by authorized Employees or their designees. This applies to tangible assets (such as office equipment, telephone, copy machines, etc.) and intangible assets (such as trade secrets and confidential information). Employees have a responsibility to protect the Company’s assets from theft and loss and to ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company’s profitability. If an Employee becomes aware of theft, waste, or misuse of the Company’s assets, Employees should report this to their supervisor or manager.
Compliance with Laws, Rules, and Regulations
It is the Company’s policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of each Employee to adhere to the standards and restrictions imposed by those laws, rules, and regulations, and in particular, those relating to accounting and auditing matters. Any Employee who is unsure whether a situation violates any applicable law, rule, regulation, or Company policy should contact the Company’s Legal Department.
Political and Charitable Contributions
Company funds are never to be offered, or contributed to, or used for the benefit of any political parties or candidates unless permitted by law and specifically authorized by the Chairman of the Audit Committee.
The Company has adopted a U.S. Foreign Corrupt Practices Act Compliance Policy and Anti-Fraud Policy and Fraud Response Plan, to which certain payments to or for the benefit of political parties and candidates may be subject. All Employees should read, understand, and comply with the U.S. Foreign Corrupt Practices Act Compliance Policy and Anti-Fraud Policy and Fraud Response Plan.
Employees may make personal political contributions out of their own funds directly to candidates or political campaigns as they see fit in accordance with all applicable laws. However, contributions to candidates or political campaigns by Employees must not be made on behalf of the Company, or appear to be made with, or reimbursed by Company funds or resources. No Employee shall engage in political activities in the Company’s name, and any Employee engaging in political activities should avoid giving the impression that they act for the Company.
Company funds are never to be offered or contributed to or used for the benefit of any charitable purpose unless permitted by law and specifically authorized by the Chief Executive Officer or the Chairman of the Audit Committee in advance. In addition, before any Employee makes a charitable donation on behalf of the Company, the Employee must first obtain approval from the Company’s Chief Executive Officer.
Anti-Bribery and Corruption
The Company complies with the anti-corruption laws of the countries in which it does business, including the U.S. Foreign Corrupt Practices Act of 1977, as amended. Employees are prohibited from, directly or indirectly, giving anything of value to government officials or employees, to obtain business, retain business or direct business to others, or to induce a government official or employee to perform, or fail to perform, his or her official functions. This includes, without limitation, any gift, forgiveness, loan, favor or service, or gratuity or special discount.
It is never appropriate to attempt to influence a decision by offering personal benefits to a government official, employee or any other person. Employees must never pay or receive a bribe or kickback, or accept anything that would or would make it appear, that their judgment to act in the best interests of the Company could be compromised. It is Company policy to refrain from participation or involvement in activities that could create even an appearance of impropriety in its business activities.
The Company has adopted a U.S. Foreign Corrupt Practices Act Compliance Policy and Anti-Fraud Policy and Fraud Response Plan, which all Employees should read, understand, and comply with.
Securities Trading
As a public company, we are subject to a number of laws concerning the purchase of our shares and other publicly traded securities. Company policy prohibits Employees and their family members from trading securities while in possession of material, non-public information relating to the Company or any other Company, including a customer or supplier that has a significant relationship with the Company. The Company has adopted Policies and Procedures to Detect and Prevent Insider Trading, which all Employees should read, understand, and comply with.
Information is “material” when there is a substantial likelihood that a reasonable investor would consider the information important in deciding whether to buy, hold, or sell securities. In short, any information that could reasonably affect the price of securities is material. Information is considered to be “public” only when it has been released to the public through appropriate channels, and enough time has elapsed to permit the investment market to absorb and evaluate the information.
If you have any doubt as to whether you possess material non-public information, you should contact the Company’s Chief Financial Officer, and the advice of the Company’s Legal Department may be sought.
Occupational Health and Safety
The Company is committed to providing a safe, healthy, and drug-free workplace for all Employees. In addition, laws and regulations impose responsibility on the Company to prevent health and safety hazards. By reason of law and policy, and to protect their own safety and the safety of other Employees, Employees are required to follow all Company safety instructions and procedures carefully.
Environmental Compliance
It is the Company's policy to operate its business and its vessels in accordance with all applicable safety and environmental laws and regulations so as to ensure the protection of the environment and the Company's personnel and property. It is the obligation of all personnel to conduct in a manner that is consistent with this policy. All Company employees shall comply with environmental laws and regulations and shall follow the environmental procedures as mandated by the Company’s Integrated Management System.
Compliance with Anti-Trust Laws
The Company’s business may be subject to United States, European Union, and other foreign government anti-trust and similar laws. Employees must comply with such laws and are encouraged to speak with the Company’s Legal Department with respect to any existing or potential anti-trust issues.
Discrimination and Harassment
The Company is committed to a work environment in which all Employees, vendors, and business associates are treated with respect and dignity.
The Company strictly prohibits all forms of discrimination and harassment, including any verbal, physical or written harassment, because of race, color, creed, religion or belief, sex, sexual orientation, ethnic or national origin, age, disability, marital status or citizenship status, genetic predisposition, pregnancy or maternity, or any other characteristic protected by law, or that of his/her relatives, friends or associates. This policy extends to conduct that is made a condition of employment, used as a basis for employment decisions and/or has the purpose or effect of creating an intimidating, hostile, or offensive work environment. The Company has a zero-tolerance policy with respect to any form of harassment, regardless of whether it occurs at the office or Company-sponsored settings outside the office. Any violation of this policy will lead to disciplinary action, up to and including dismissal.
The Company has also adopted specific policies on Equal Employment Opportunity and Harassment and Bullying Free Workplace, which Employees should read, understand, and comply with, if applicable.
If you have experienced any form of discrimination or harassment as an Employee, you should report it immediately to your supervisor, the Company’s Legal Department, the Human Resources department, or through the Company’s whistleblower hotline or the Open Reporting hotline anonymously at any time. If the alleged complaint involves the Master, then the seafarer should report the alleged incident directly to the Crew Manager and / or the Designated Person Ashore (the “DPA”).
All reports will be investigated in a timely manner. In addition, the Company prohibits retaliation against an individual who, in good faith, reports harassment or cooperates in an investigation.
Disclosure
Employees are responsible for ensuring that the disclosure in the Company’s periodic reports and documents that the Company files with or submits to the SEC and other public communications are full, fair, accurate, timely and understandable. In doing so, Employees shall take such action as is reasonably appropriate to (i) establish and comply with disclosure controls and procedures and accounting and financial controls that are designed to ensure that material information relating to the Company is made known to them; (ii) confirm that the Company’s periodic reports comply with applicable law, rules, and regulations; and (iii) ensure that information contained in the Company’s periodic reports fairly presents in all material respects the financial condition and results of operations of the Company.
Employees shall not knowingly (i) make, or permit or direct another to make, materially false or misleading entries in the Company’s, or any of its subsidiaries’, financial statements or records; (ii) fail to correct materially false and misleading financial statements or records; (iii) sign, or permit another to sign, a document containing materially false and misleading information; or (iv) falsely respond, or fail to respond, to specific inquiries of the Company’s Legal Department, independent auditor or external Legal Counsel.
Use of Agents and Non-Employees
Employees shall not use agents or other non-employees to engage in practices that contravene this Code. This Code applies to all activities on behalf of the Company. Employees retaining agents or other representatives shall avoid situations that could give rise to misunderstandings. Further, agents and other non-employees should be compensated at competitive rates that are commensurate with the services they perform.
Procedures Regarding Waivers
Because of the importance of the matters involved in this Code, waivers will be granted only in limited circumstances and where such circumstances would support a waiver. Waivers of the Code may only be made by the Audit Committee and will be disclosed by the Company.
Internal Reporting
Employees shall take all appropriate action to stop any known misconduct by fellow Employees or other Company personnel that violate this Code. Employees shall report any known or suspected misconduct to the Chairman of the Audit Committee or the Company’s Legal Department, or through the Company’s Whistleblower Program/ Open Reporting System (see below). The Company will not retaliate or allow retaliation for reports made in good faith.
Whistleblower Program/ Open Reporting System
The Company values input from its Employees. In line with the Company’s commitment to open communication, the Company has implemented a Whistleblower Program to provide an avenue for Employees to raise concerns without fear of retaliation for reports made in good faith.
Employees may call the following number +30-216-6002594 and leave a voice message with the Company’s whistleblower hotline answering service if they wish to ask questions, seek guidance on specific situations, or report violations (or suspected violations) of this Code or other policies of the Company, including but not limited to accounting, internal controls, and auditing matters.
Employees may also report such known or suspected violations to the Company at the e-mail address “whistleblower@pshipping.com” Employees may choose to be anonymous; however, it will not be possible to obtain follow-up details necessary to investigate the matter. In either case, Employee information will be kept strictly confidential; thus, there should be no fear of any form of retaliation. The whistleblower hotline answering service and e-mail will be accessible only to the Chairman of the Audit Committee and the Company’s Internal Auditor. Seafarers may also call the Open Reporting hotline anonymously at any time.
The Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any Employee in the terms and conditions of employment based upon any lawful actions of the Employee with respect to good faith reporting of complaints regarding accounting matters or otherwise as specified in Section 806 of the Sarbanes-Oxley Act of 2002.
Inquiries
All inquiries and questions in relation to this Code or its applicability to particular people or situations should be addressed to the Company’s Legal Department at aoikonomea@unitizedocean.com.
This policy outlines the Company's principles with respect to maintaining a fraud free environment, details procedures for employees to report suspected fraud and describes actions to be taken by the company.
Performance Shipping Inc. and its subsidiaries (collectively the “Company”) has adopted this Anti-Fraud Policy and Fraud Response Plan (this “Policy”), which is applicable to all employees, directors, officers, and agents of the Company and its subsidiaries (each, an “Employee”). This Policy outlines the Company's principles with respect to maintaining a fraud-free environment, details procedures for Employees to report suspected fraud, and describes actions to be taken by the Company.
Introduction
The Company is committed to the highest possible standards of openness, probity and accountability in all its affairs through the creation of the appropriate “tone at the top”. It is determined to maintain a culture of honesty and opposition to fraud and corruption, reinforced through the establishment and maintenance of an effective system of Internal Controls.
In line with that commitment, this Policy outlines the principles it is committed to in relation to preventing, reporting and managing fraud and corruption, including, but not limited to, violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and the anti-corruption laws of the other countries where the Company does business.
This Policy reinforces the Company’s approach by setting out the ways in which Employees can voice their concerns about suspected fraud or corruption. It also outlines how the Company will deal with such complaints.
Implementation
This Policy is to be implemented where suspicions of fraud or corruption have been raised.
Fraud is defined as:
"A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment".
Corruption is defined as:
"The offering, giving, soliciting or acceptance of an inducement or reward, which may improperly influence the action of any person".
Fraudulent or corrupt acts may include, but are not limited to:
This is not an exhaustive list. If a person is in any doubt about the seriousness and nature of his/her concern, advice and guidance can be obtained from the Company’s Internal Auditor or the Chairman of the Audit Committee.
Safeguards
Harassment or Victimization - The Company recognizes that the decision to report a concern can be a difficult one to make, not least because of the fear of reprisal from those responsible for the malpractice. The Company will not tolerate harassment or victimization and will take action to protect those who raise a concern in good faith.
Confidentiality - The Company will do its best to protect an individual’s identity when he or she raises a concern and does not want their name to be disclosed. It must be appreciated, however, that the investigation process may reveal the source of the information and a statement by the individual may be required as part of the evidence.
Anonymous Allegations - This Policy encourages individuals to put their names to allegations. Concerns expressed anonymously are much less powerful, but they will be considered at the discretion of the Company. In exercising this discretion, the factors to be taken into account would include: the seriousness of the issues raised; the credibility of the concern; and the likelihood of confirming the allegation from attributable sources.
Untrue Allegations - If an allegation is made in good faith, but is not confirmed by the investigation, no action will be taken against the originator. If, however, individuals make
Roles and Responsibilities
Managers are the first line of defense against fraud. They should be alert to the possibility that unusual events may be symptoms of fraud or attempted fraud. Management is responsible for ensuring that an adequate system of internal control exists within their area of responsibility and that those controls are properly operated and complied with.
Employees must have, and be seen to have, the highest standards of honesty, propriety and integrity in the exercise of their duties. They are responsible for reporting any suspected fraud, impropriety, or other dishonest activity immediately to their manager or through the Company’s Whistleblower Program or the Open Reporting System and to assist in the investigation of any suspected fraud.
The internal audit activity evaluates and contributes to the improvement of the organization’s risk management, control, and governance processes through consulting and assurance activities. Towards this end, the Internal Auditor will prepare and execute annual audit plans, based on an evidenced risk assessment procedure, through identifying potential risk areas and qualifying risks as high, medium, and low. The respective risk assessment will determine the frequency and volume of testing to be carried out each year.
Reporting Procedure
Any Company Employee who obtains information about a breach (including a suspected breach) of this policy and/or anti-corruption laws must report it to their supervisor who must in turn report it to the Legal Department, the Internal Auditor or the Chairman of the Audit Committee. Alternatively, Company’s Employees may report suspected breaches in accordance with the Company’s Whistleblower Program or Open Reporting System. The report shall be investigated by the Legal Department or the Company’s Audit and Risk Committee and all relevant Employees must co-operate fully with any such investigation.
The Company’s Whistleblower Program is intended to encourage and enable staff to raise serious concerns within the Company rather than overlooking a problem due to fear of harassment and victimization. Seafarers may also call the Open Reporting hotline anonymously at any time. The Whistleblower Program as well as the Open Reporting System is outlined in the Company’s Code of Ethics, which is available on the Company’s website.
The Company will treat all reports in a confidential manner. If a person has identified himself or herself when making a complaint in good faith, the identity of the person who registered the complaint will be kept confidential unless disclosure is necessary to complete a fair investigation or for another overriding reason, or as required by law or regulation.
Incidents will be logged in the Fraud Register, which is maintained by the Internal Auditor and the Chairman of the Audit Committee. The Fraud Register records details of the allegations made, investigations carried out and the respective conclusions made.
How will Allegations of Fraud or Corruption be Dealt with by the Company?
For issues raised by Employees or members of management, the action taken by the Company will depend on the nature of the concern. The matters raised may:
When a concern is received, it shall be properly communicated to the Audit Committee and the Internal Auditor. An action plan and line of reporting of the incident will be determined on a case by case basis, and will directly depend on the significance and potential impact of the suspected fraud activity.
The respective complaint, the actions taken and the respective conclusions will be outlined in the Fraud Register mentioned above, for recording and audit trail purposes.
The Company will not permit any negative or adverse actions to be taken against its personnel or any other person who raises concerns about suspected breaches in any of the policies, rules, or regulations discussed.
More specifically, the Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any Employee in terms and conditions of his/her employment based on any lawful actions of the Employee with respect to good faith reporting of complaints regarding accounting matters or otherwise as specified in Section 806 of the Sarbanes-Oxley Act of 2002.
Any of the above acts should be reported immediately to the Company’s Chief Executive Officer and will be promptly investigated and resolved.
This Audit Committee Charter (this “Charter”) has been adopted by the Board of Directors (the “Board”) of Performance Shipping Inc. (the “Company”).
This Audit Committee Charter (this “Charter”) has been adopted by the Board of Directors (the “Board”) of Performance Shipping Inc. (the “Company”). The Audit Committee of the Board (the “Committee”) shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
Statement of Purpose
The Committee shall assist the Board in its oversight of (i) the quality and integrity of the Company’s financial statements and its accounting, auditing and financial reporting practices, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of the Company’s independent auditors and the Company’s internal audit function. It may also have such other duties as may from time to time be assigned to it by the Board and are required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and the Nasdaq Stock Market (the “NASDAQ”) or any other securities exchange (“Exchange”) on which the Company’s securities are traded. In carrying out its responsibilities, the Board believes that the policies and procedures set forth in this Charter should remain flexible and be interpreted to allow the Committee to best adapt and react to changing business and regulatory requirements.
The Committee shall maintain free and open communication with the independent auditors, internal auditor, and Company management. In discharging its oversight role, the Committee shall have full access to all Company books, records, facilities, personnel, and outside professionals. The Committee shall have the authority and shall receive necessary funding from the Company to retain special legal, accounting or other consultants or advisors employed by the Committee, and shall obtain such advice and assistance from such special legal, accounting or other consultants or advisors as the Committee deems necessary. The Committee shall have sole authority to approve related fees and retention terms. Each member of the Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company from which it receives information, (ii) the accuracy of the financial and other information provided by such persons or organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board), and (iii) representations made by management as to all audit and non-audit services provided by the independent auditors to the Company.
Composition; Independence
The membership of the Committee shall consist of at least two directors that are appointed to the Committee by the Board, each of whom the Board has determined is free of any material relationship with the Company, either directly or as a partner, shareholder or officer of an organization with a relationship to the Company, and who satisfy the independence requirements of Rule 10A-3(b)(2), (3), (4) and (5) under the Securities Exchange Act of 1934 and the NASDAQ or any other Exchange on which the Company’s shares are listed. The Board shall appoint a member as chairman of the Committee, who shall be responsible for the leadership of the Committee, including scheduling and presiding over meetings, preparing agendas, making regular reports to the Board, and maintaining regular liaison with the Company’s Chief Executive Officer, Chief Financial Officer, lead independent audit partner, and internal auditor. In the absence of the appointed chairman from any meeting of the Committee, the Committee may select another member to act as chairman for such meeting. Additionally, each director appointed to the Committee shall serve on the Audit Committees of no more than two public companies other than the Company, unless the Board determines that such simultaneous service would not impair the ability of the member to effectively serve the Committee. The Board shall annually review the Committee’s and its members’ compliance with such requirements and the Board may remove any director from the Committee at any time for any reason with or without cause.
Meetings; Quorum
The Committee shall meet as often as it deems necessary in order to perform its responsibilities, but not less than three times annually. Members of the Committee may participate in meetings of the Committee by telephone conference call or other videoconferencing equipment allowing all persons participating in the meeting to hear each other (“telephonic communication”). The Committee may act by unanimous written consent in lieu of a meeting. The Committee shall also periodically meet with the Company’s management, internal auditor, and independent auditors separately from the Board. The presence, either in person or by telephonic communication, of a majority, but no fewer than two, of the then-appointed members of the Committee shall constitute a quorum. In every case where a quorum is present, action of the Committee may be taken by the Committee upon the affirmative vote of a majority of the members present.
Responsibilities
The Committee’s job is one of oversight. Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements. Management and the internal audit department are responsible for maintaining appropriate accounting and financial reporting principles and practices, and internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for auditing the annual financial statements. The Committee and the Board recognize that management and the independent auditors have more resources and time and more detailed knowledge and information regarding the Company’s accounting, financial and auditing practices than do Committee members; accordingly, the Committee’s oversight role does not provide any expert or special assurance as to the Company’s financial statements or any certification as to the work of the independent auditors. Nor is it the duty of the Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditors, or to ensure compliance with laws and regulations.
Although the Board and the Committee may wish to consider other duties from time to time, the general recurring activities of the Committee in carrying out its oversight role are described below. The Committee shall be responsible for:
Oversight of Independent Auditor and the Audit Process
Oversight of Internal Audit
Other Responsibilities
This policy (the "Policy") will be administered and supervised by the Company’s Chief Accounting Officer. Please pay special attention to the "Blackout" and "Trading Window" policies discussed in this memorandum.
THIRD AMENDED AND RESTATED
POLICIES AND PROCEDURES TO DETECT AND
PREVENT INSIDER TRADING
REVISED AS OF FEBRUARY 22, 2023
GENERAL
The Securities Exchange Act of 1934 prohibits the misuse of material, non-public information. In order to avoid even the appearance of impropriety, the Board of Directors of Performance Shipping Inc. (the “Company”) has adopted this policy (this “Policy”) to prevent the misuse of non-public information.
Although “insider trading” is not defined in the securities laws, it is generally thought to be described as trading, either personally or on behalf of others, on the basis of material non-public information or communicating material non-public information to others in violation of the law.
This Policy will be administered and supervised by the Company’s Financial Reporting and Accounting Director. Please pay special attention to the “Blackout” and “Trading Window” policies discussed below.
WHOM DOES THIS POLICY COVER?
This Policy covers all of the Company’s officers, directors, and employees (“Covered Persons”), as well as any transactions in any securities participated in by family members, trusts or corporations directly or indirectly controlled by Covered Persons. In addition, this Policy applies to transactions engaged in by corporations in which the Covered Person is an officer, director, or 10% or greater stockholder, and a partnership of which the Covered Person is a partner, unless the Covered Person has no direct or indirect control over the partnership.
The Company forbids any Covered Person from trading, either for his or her personal account or on behalf of others, while in possession of material non-public information, or communicating material non-public information to others in violation of the law. This prohibited conduct is often referred to as “insider trading”.
WHAT IS INSIDER TRADING?
The term “insider trading” generally is used to refer to trading while in possession of material non-public information (whether or not one is an “insider”), and/or to communications of material non-public information to others. The law in this area is generally understood to prohibit, among other things:
THE INSIDER CONCEPT
As a general guide for our directors, officers and employees, components of what amounts to “insider trading” are described below:
Who is an insider?
The concept of “insider” is broad. It includes officers, directors, trustees, and employees of a company. In addition, a person can be a “temporary insider” if he or she enters into a special confidential relationship in the conduct of a company’s affairs and is given access to information solely for the company’s purposes. A temporary insider can include, among others, a company’s attorneys, accountants, consultants, bank lending officers, and the employees of those organizations.
What information is material?
Trading on information that is “material” is prohibited. Information generally is considered “material” if:
Information that should be considered material includes: dividend changes, earnings estimates not previously disseminated, material changes in previously-released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidity problems, and extraordinary management developments.
What information is non-public?
Information is non-public until it has been effectively communicated to the market place. For example, information found in a report filed with the SEC or appearing in Dow Jones, Reuters, The Wall Street Journal, on Bloomberg, or in other publications of general circulation ordinarily would be considered public. In addition, in certain circumstances, information disseminated to certain segments of the investment community may be deemed “public”, for example, research communicated through institutional information dissemination services such as First Call. The fact that research has been disseminated through such a service does not automatically mean that it is public. It takes time for information to become public. The amount of time since the information was first disseminated ordinarily is a factor regarding whether the information is considered “public”.
PENALTIES FOR INSIDER TRADING
Penalties for insider trading are severe both for the individuals involved as well as for their employers. A person can be subject to some or all of the penalties listed below, even if he or she does not personally benefit from the violation. Penalties may include:
Clearly, it is in the Company’s and your best interests for the Company to put into place procedures to prevent improper trading by its insiders.
PROCEDURES TO PREVENT INSIDER TRADING
The following procedures have been established to aid in the prevention of insider trading. Every Covered Person must follow these procedures or risk sanctions, including dismissal, substantial personal liability, and criminal penalties.
Questions to Ask
Prior to trading in the Company’s securities, and if you think you may have material non-public information, ask yourself the following questions:
Action Required
If you are at all uncertain as to whether any information you have is “inside information”, you must:
After the employee and the Financial Reporting and Accounting Director have reviewed the issue and consulted with outside counsel to the extent appropriate, the Covered Person will be instructed as to whether he/she may trade and/or communicate that information.
Blackout Policy and Trading Window
To ensure compliance with this Policy and applicable securities laws, the Company requires that all Covered Persons refrain from conducting transactions involving the purchase or sale of the Company’s securities other than during the period commencing at the open of trading on the second business day following the date of public disclosure of the Company’s financial results for a particular fiscal quarter or year, and continuing until the close of trading on the fourteenth (14th) day after the last day of the current fiscal quarter (the “Trading Window”). The Trading Window is subject to periodic adjustment in the sole discretion of the Financial Reporting and Accounting Director.
In addition, from time to time material non-public information regarding the Company may be pending. While such information is pending, the Company may impose a special “blackout” period during which the same prohibitions and recommendations shall apply.
Even during the Trading Window, any person possessing material non-public information concerning the Company should not engage in any transactions in the Company’s securities until such information has been made public and absorbed by the market.
Pre-Clearance of Trades
All Covered Persons must refrain from trading in the Company’s securities, even during the Trading Window, without first complying with the Company’s “pre-clearance” process. Each such person should contact the Company’s Financial Reporting and Accounting Director prior to commencing any trade. The Financial Reporting and Accounting Director will consult as necessary with senior management and/or counsel to the Company before clearing any proposed trade. The Financial Reporting and Accounting Director’s personal trading activity will be reviewed by the Chief Financial Officer.
Coverage
This Policy applies not only to the Company’s shares, but also any other securities issued by the Company.
QUESTIONS OR CONCERNS
Any questions or concerns regarding this Policy should be directed to the Financial Reporting and Accounting Director, or, if such questions or concerns involve the Financial Reporting and Accounting Director, to the Chief Financial Officer.
The Company is committed to Equal Employment Opportunity for all employees.
Performance Shipping Inc., and its subsidiaries, (collectively the “Company”) is committed to Equal Employment Opportunity for all sea or shore-based employees (the “Employee”). The Company will recruit, hire, compensate, train, promote, and encourage fair treatment of Employees regardless of sex, race, color, religion, creed or belief, trade union membership, age, nationality, ethnic or national origin, sexual orientation, marital status, citizenship status, genetic predisposition, disability, pregnancy or maternity, or any other classification as protected by law. By promoting diversity and inclusion in the workplace, the Company fosters a work environment in which differences are respected and valued. The Company strictly prohibits and does not tolerate discrimination against Employees, applicants, or any other covered persons because of race, color, religion, creed, national origin or ancestry, ethnicity, sex (including gender, pregnancy, sexual orientation, and gender identity), age, physical or mental disability, citizenship, past, current, or prospective service in the uniformed services, trade union membership, genetic information, or any other classification as protected by law. This policy applies to all terms and conditions of employment, including, but not limited to, hiring, training, promotion, discipline, compensation, benefits, and termination of employment.
Scope
Applies to all sea and shore-based Employees.
Guidelines and Reporting of Violations
All Company plans, programs, and personnel actions, including employment, compensation, benefits, promotions, discipline, dismissals, social activities, training and educational assistance, safety and health programs, and all other terms and conditions of employment, will be administered without prejudice. The Company will endeavor to provide Equal Employment Opportunity to all job applicants and Employees. All recruitment decisions and selection of Employees for transfers, promotions and training, will be based on Job-related skills, qualifications, and competencies of the candidate and without preference, exclusion, or favor on any other grounds.
The Company will continue to review its personnel practices and procedures to ensure that all departments adhere to the Company’s commitment to promoting equality.
Employees who experience discrimination in the workplace should first communicate their concerns to their immediate supervisor. If an Employee is dissatisfied with the response to the situation, or if the problem or complaint involves the supervisor, they are encouraged to address the issue with the Crew Manager and/or the Designated Person Ashore (the “DPA”) or the HR department as appropriate.
The Company believes that every employee has the right to work in a harassment-free environment regardless of their gender.
Harassment-Free Workplace
Performance Shipping Inc. and its subsidiaries (collectively the “Company”), believes that every sea or shore-based employee (the “Employee”) has the right to work in a harassment-free environment regardless of their gender. The Company strictly prohibits any form of verbal, physical and/or written harassment based upon sex, race, color, creed, religion or belief, age, sexual orientation, nationality, ethnic or national origin, disability, marital status, citizenship status, genetic predisposition, pregnancy or maternity, or any other classification protected by law. All Officers and Department Heads are responsible for ensuring that no Employee is subject to conduct that constitutes harassment in any form. The Company has a zero-tolerance policy with respect to any form of harassment. Any violation of this policy will lead to disciplinary action, including dismissal.
Scope
Applies to all seagoing and shore-based personnel employed by the Company.
Definition
Types of harassment include, but are not limited to, sexual, psychological, online and physical harassment.
Sexual harassment is inappropriate conduct that may include a range of subtle and not-so-subtle behavior, and may involve individuals of the same or different genders. It includes harassment that is gender-based (for example, offensive remarks about an individual's dress, body or appearance, or an individual’s sex or gender), as well as conduct that is sexual in nature.
Examples of conduct that would constitute sexual harassment:
This list is illustrative only and not exhaustive. No form of harassment will be tolerated.
Harassment is prohibited both at the workplace and at employer-sponsored events.
Harassment based on any other protected characteristic is also strictly prohibited. Under this policy, harassment is any unwanted conduct that has the purpose or effect of violating a person's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them. Harassment also includes treating someone less favorably because they have submitted or refused to submit to such behavior in the past.
Further examples of harassment include, but are not limited to:
Responsibility
The Company will not tolerate any form of harassment whether it is by Officers, Department Heads or other Employees.
This policy will also endeavor to protect employees of customers, vendors and others with whom the Company does business. Employees of the Company are prohibited from treating employees of such businesses in a manner inconsistent with the guidelines established herein.
Similarly, the Company will endeavor to protect its Employees from harassment by employees of customers, vendors and others with whom the Company does business by reporting such harassment to the offending company and taking appropriate action. Employees who believe they are being harassed by employees of such a company are encouraged to speak out.
Process
Any Employee who believes that they have been subjected to harassment of any kind should report the alleged act immediately. Shore-based employees should report to their supervisor, the Company’s Legal Department, the Human Resources department (the “HR department”), or through the Company’s whistleblower hotline or Open Reporting System anonymously at any time whilst seafarers should report to the vessel’s Master. If the alleged complaint involves the Master, then the seafarer should report the alleged incident directly to the Crew Manager and/or the Designated Person Ashore (the “DPA”).
Seafarers may also call the Open Reporting hotline anonymously at any time. Once a report is made, an investigation will be conducted discreetly and any information obtained from the investigation will be disclosed only on a need-to-know basis. Investigations will include interviews of the complaining party, the accused party, and others as appropriate. Such interviews will be aimed at providing both parties an opportunity to present evidence and explain their version of the events.
The results of the investigation will be analyzed by the designated investigator and representatives from Crew Department or the HR department accordingly and Senior Management who will work together to resolve the complaint and, if necessary, implement the appropriate disciplinary action on conduct that it deems to be inappropriate, regardless of whether it rises to the level of a violation of law.
If the Company determines that harassment has occurred, appropriate corrective action will be taken as warranted by the circumstances. Any Employee, Department Head or Master who is found after investigation to have engaged in the harassment of an Employee will be subject to appropriate disciplinary action, depending on the circumstances, up to and including dismissal.
Any Department Head or Master who knows that an Employee is being harassed and who has failed to report the incident will also be subject to appropriate disciplinary measures. It is incumbent upon Department Heads to ensure that sexual harassment or any type of harassment is taken seriously and prompt action is taken to resolve the problem.
No retaliation will be permitted against the person alleging the harassment or those participating in the investigation.
Policy against Bullying
The purpose of this policy is to guide the Company’s approach to concerns or complaints about workplace bullying.
Scope
This policy applies to all Employees who are subject to alleged bullying behavior or any other behavior that may constitute a breach of this policy.
Definition
Bullying is defined as repeated and unreasonable behavior directed towards a person, or a group of people, that creates a risk to health, safety and well-being. Bullying hampers productivity by creating dysfunction and damaging morale within work environments. It includes behavior (generally a pattern of behavior) that intimidates, offends, degrades or humiliates another person, in verbal, physical and/or written form.
Examples:
The following behaviors do not constitute bullying:
Process
Employees should report cases of bullying to their supervisor (the Master or the Department’s Head) and attempt to resolve such claims locally and informally. If the alleged complaint involves their supervisor or the attempt to informally resolve the matter fails or is not appropriate, then the Employee should report the issue to the Crew Manager or the HR department.
In all reported cases of bullying, the Company will review the allegations and respond to the Employee who raised the complaint.
While the procedural requirements of the various bullying resolution mechanisms vary, the Company aims to ensure that:
The Company strongly encourages all Employees to promptly report instances of harassment or bullying, whether personally experienced or observed in the workplace, in order to allow for rapid and constructive actions.
Early reporting and intervention have proven to be the most effective methods of resolving actual or perceived incidents of bullying. The Company will make every effort to stop alleged harassment or bullying before it becomes severe or pervasive, but can only do so with the cooperation of its Employees.
The abovementioned procedure does not prevent individuals who believe they have been subjected to bullying from promptly advising the offender that their behavior is unwelcome and requesting that it be stopped.
This policy provides a safeguard against such behaviors and emphasizes the need for all Employees to conduct themselves in accordance with the Company’s Code of Business Conduct and Ethics.
Performance Shipping Inc. (the ”Company”) operates in a wide range of legal and business environments, many of which pose challenges to our ability to conduct our business operations with integrity.
Combating Corruption. Performance Shipping Inc. (the ”Company”) operates in a wide range of legal and business environments, many of which pose challenges to our ability to conduct our business operations with integrity. As a company, we strive to conduct ourselves according to the highest standards of ethical conduct. Throughout our operations, the Company seeks to avoid even the appearance of impropriety in the actions of our directors, officers, employees, and agents.
Under the US Foreign Corrupt Practices Act of 1977, as amended, (“FCPA”), it is illegal for US persons, including US companies or any companies traded on US exchanges, and their subsidiaries, directors, officers, employees and agents, to make corrupt payments to non-US government officials. The concept of prohibiting corrupt payments is simple. However, understanding the full scope of the FCPA is essential as this law directly affects everyday business interactions between the Company and non-US governments and government-owned or government-controlled entities.
Violations of the FCPA can also result in violations of other US laws, including anti-money laundering, mail and wire fraud and conspiracy laws. The penalties for violating the FCPA are severe. In addition to being subject to the Company’s disciplinary policies (including termination of employment), individuals who violate the FCPA may also be subject to imprisonment and fines.
Aside from the FCPA, the Company may also be subject to other non-US anti-corruption laws, in addition to the local laws of the countries in which the Company conducts business. This Policy generally sets forth the expectations and requirements for compliance with those laws.
Applicability
This Policy is applicable to all of the Company’s operations worldwide. This Policy applies to all of the Company’s directors, officers and employees. This Policy also applies to the Company’s agents, consultants, joint venture partners and any other third-party representatives that, on behalf of the Company, have conducted business outside of the US or interacted with non-US government officials or are likely to conduct business outside of the US or interact with non-US government officials.
Prohibited Payments
Company directors, officers, employees, agents, and any others covered by this Policy (the “Covered Persons”) are prohibited from directly or indirectly making, promising, authorizing or offering anything of value to a non-US government official on behalf of the Company to secure an improper advantage, obtain or retain business, or direct business to any other person or entity. This prohibition includes payments to third-parties where the Covered Person knows, or has reason to know, that the third-party will use any part of the payment for bribes or otherwise corrupt payments.
(a) Cash and Non-Cash Payments - “Anything of Value”
Payments that violate the FCPA may arise in a variety of settings and include a broad range of payments beyond the obvious cash bribe or kickback. The FCPA prohibits giving “Anything of Value” for an improper or otherwise corrupt purpose. This term is very broad and can include, for example:
(i) Gifts.
(ii) Travel, meals, lodging, entertainment, or gift cards.
(iii) Loans or non-arm’s length transactions.
(iv) Charitable or political donations.
(v) Business, employment, or investment opportunities.
(b) Non-US Government Official
The FCPA broadly defines the term non-US government official to include:
(i) Officers or employees of a non-US government or any department, agency or instrumentality thereof.
(ii) Officers or employees of a company or business owned in whole or in part by a non-US government (“state-owned or controlled enterprises”).
(iii) Officers or employees of a public international organization (such as the United Nations, World Bank or the European Union).
(iv) Non-US political parties or officials thereof.
(v) Candidates for non-US political office. This term also includes anyone acting on behalf of any of the above.
On occasion, a non-US government official may attempt to solicit or extort improper payments or anything of value from Covered Persons. Covered Persons must inform the non-US government official that the Company does not engage in such conduct and immediately contact the Chairman of the Audit Committee or the Company’s legal counsel.
(c) Commercial Bribery
Bribery involving commercial (non-governmental parties) is also prohibited under this Policy. To this end, Covered Persons shall not offer, promise, authorize the payment of, or pay or provide anything of value to any employee, agent, or representative of another company to induce or reward the improper performance of any function or any business-related activity. Covered Persons also shall not request, agree to receive, or accept anything of value from any employee, agent, or representative of another company or entity as an inducement or reward for the improper performance of any function or business-related activity.
Permitted Payments
The FCPA does not prohibit all payments to non-US government officials. In general, the FCPA permits three categories of payments:
(d) Facilitating Payments
The FCPA includes an exception for nominal payments made to low-level government officials to ensure or speed the proper performance of a government official’s routine, non-discretionary duties or actions, such as:
(i) Clearing customs.
(ii) Processing governmental papers such as visas, permits, or licenses.
(iii) Providing police protection.
(iv) Providing mail, telephone, or utility services.
(e) Promotional Hospitality and Marketing Expenses or Pursuant to a Contract
The Company may pay for the reasonable cost of a non-US government official’s meals, lodging or travel if, and only if, the expenses are bona fide, reasonable, and directly related to the promotion, demonstration or explanation of Company products or services, or the execution of a contract with a non-US government or agency.
(f) Promotional Gifts
Promotional gifts of nominal value may be given to a non-US government official as a courtesy in recognition of services rendered or to promote goodwill. These gifts must be nominal in value and should generally bear the trademark of the Company or one of its products.
Political and Charitable Contributions
Contributions to candidates for non-US political office are prohibited unless the Chairman of the Audit Committee or the Company’s Internal Auditor pre-approves them in writing. Charitable contributions to non-US charities must also be pre-approved in writing by the Chairman of the Audit Committee or the Company’s Internal Auditor.
Record Keeping
It is the Company’s policy to implement and maintain internal accounting controls based upon sound accounting principles. All accounting entries in the Company’s books and records must be timely and accurately recorded and include reasonable detail to fairly reflect its transactions. These accounting entries and the supporting documentation must be periodically reviewed to identify and correct discrepancies, errors, and omissions.
(g) Authorization for Transactions
All transactions involving the provision of anything of value to a non-US government official must occur only with appropriate authorization by the Company’s legal counsel.
(h) Recording Transactions
All transactions involving the provision of anything of value to a non-US government official must be recorded in accordance with generally accepted accounting principles.
(i) Tracking Transactions
All transactions involving the provision of anything of value to a non-US government official must be tracked in a separate log or record, with supporting documentation identifying:
(i) The name and position of the employee requesting and authorizing the transaction.
(ii) The name and position of the non-US government official involved in the transaction.
(iii) A description, including the value, of the payment or provision of anything of value, and where applicable, a description of the Company’s products or services being promoted or the relevant contractual provision if the payment was made pursuant to a contract.
Cash Payments
Cash payments of any kind to a third-party, other than documented petty cash disbursements or other valid and approved payments, are prohibited. Company checks shall not be written to “cash,” “bearer” or anyone other than the party entitled to payment except to replenish properly used petty cash funds.
Representatives
All third-party Company representatives must fully comply with the FCPA and all other applicable laws.
Compliance
Covered Persons must be familiar with and perform their duties according to the requirements set out in this Policy. Covered Persons who violate this Policy are subject to disciplinary action, up to and including dismissal. Third-party representatives who violate this Policy may be subject to termination of all commercial relationships with the Company.
To ensure that all Covered Persons are thoroughly familiar with the provisions of this Policy, the FCPA and any other applicable anti-corruption laws, the Company shall provide anti-corruption training and resources to those Covered Persons, as appropriate.
Any Covered Person who suspects that this Policy may have been violated must immediately notify the Company’s Legal Counsel and the Executive Management. Any Company employee who, in good faith, reports suspected legal, ethical or Policy violations may do so on a confidential basis and will not suffer any unlawful retaliation for doing so. When in doubt about the appropriateness of any conduct, the Company requires that you seek additional guidance from the Company’s Legal counsel before taking any action that may subject the Company to potential FCPA liability.
Duty to Cooperate
The Company may at times undertake a more detailed review of certain transactions. As part of these reviews, the Company requires all Covered Persons and third-party representatives to cooperate with the Company, external legal counsel, external auditors, or other similar parties. The Company views failure to cooperate in an internal review as a breach of the Covered Persons’ obligations to the Company and will deal with this failure severely in accordance with any local laws or regulations.
Questions About the Policy
If you have any questions relating to this Policy, please contact the Company’s Legal counsel.
Reporting Policy Violations.
To report potential violations of this Policy, immediately notify the Company’s Legal counsel.
Performance Shipping Inc. and its subsidiaries (collectively, the “Company”) is committed to conducting business in a responsible and upright manner and to respect human rights across our activities.
Performance Shipping Inc. and its subsidiaries (collectively, the “Company”) is committed to conducting business in a responsible and upright manner and to respect human rights across our activities. By providing global shipping transportation services, and throughour ESGcommitments,weenable sustainable trade, which serves as a positive contributor to global and local development and growth.
Our Company has been a signatory to the UN Global Compact (“UNGC”) since 2021 and we support the ten UNGC Principles, enumerated as follows:
We commit to respect all internationally recognized human rights referenced in the International Bill of Human Rights and the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. We take constant care to avoid causing or contributing to adverse impacts on people – whether in our own Company, through our business partners, or in the communities where we operate. We endorse the principles of the UN Guiding Principles on Business and Human Rights (“GPBHR”) and implement our commitment to respect human rights via our Code of Business Conduct and Ethics, and other internal policies and procedures.
We prioritize the UN Sustainable Development Goals, which we believe are relevant to our business and sustainability priorities, including:
We regularly assess our human rights impacts. In the context of shipping transportation services, we havea heightened focus on salient human rights issues that include health & safety, access to remedy and labour conditions, as well as emerging issues such as data ethics and supporting a just energy transition.
When issues are identified, we manage, mitigate and remediate ourimpacts. Incases where localregulations may be less stringent than international human rights standards, we strive to uphold higher international standards, and in the cases where there may be a conflict, we seek ways to honour the higher international standards
The Company expects our business partners across the value chain to respect human rights, including those mentioned above. The conduct and ethics expectation towards our employees, directors, officers, and agents is outlined inour Code of Business Conduct and Ethics.
We recognize the importance of engaging with potentially and actually affected rightsholders, including workers across our industry and local communities affected by our business, and strive to engage with them in our human rights due diligence and when providing remedy. We commit to provide remedy through legitimate processes if we have caused or contributed to adverse human rights impacts onindividuals, workers, or communities and will not obstruct access to remedies.
Employees shall take all appropriate action to stop any known misconduct by fellow employees or other Company personnel that violate this Policy. Employees shall report any known or suspected misconduct to the Chairman of the Audit Committee or the Company’s Legal Department, or through the Company’s Whistleblower Program. Seafarers may also call the Open Reporting hotline anonymously at any time. The Company will not retaliate or allow retaliation for reports made in good faith.
Understanding that human rights due diligence is a dynamic process, we continuously strive to improve by regularly assessing our human rights impacts,reviewing our human rights due diligence processes, monitoring their effectiveness and communicating on our efforts.