EN POINTE TECHNOLOGIES,
INC.
CODE OF BUSINESS CONDUCT AND ETHICS
Introduction
This Code of Business Conduct and Ethics applies to a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide directors, officers, and employees of the Company. All of our directors, officers, and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior.
If a law conflicts with a policy in this Code,
you must comply with the law; however, if a local custom or policy
conflicts with this Code, you must comply with the Code. If you have any
questions about these conflicts, you should ask your immediate supervisor
how to handle the situation.
Those who violate the standards in this
Code will be subject to corrective action up to and including immediate
termination. If you are in a situation which you believe may violate or
lead to a violation of this Code, follow the procedures described in
Sections 14-16 of this Code.
This Code of Business Conduct and Ethics complies with the requirements for a “code of ethics” under Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and regulations thereunder and the applicable rules and regulations of the National Association of Securities Dealers, as adopted and enforced by Nasdaq.
1. Compliance with
Laws
Obeying the law, both in letter and in spirit, is the
foundation on which this Company’s ethical standards are built. All
directors, officers, and employees must obey the laws of the United States
and the cities and states in which we operate. Although not all employees
are expected to know the details of these laws, it is important to know
enough to determine when to seek advice from their supervisors and the
Company’s management.
2. Ethical Conduct
Beyond
compliance with laws, the Company requires that all its directors,
officers, and employees act in a manner which meets the highest standards
of ethical behavior. This includes the obligation to avoid any actual or
apparent conflicts of interest in personal and professional relationships.
The honesty and integrity of our business conduct must not be compromised.
The Company will not condone ethical violations for the sake of personal
gain, personal advantage, expediency, or perceived business
advantage.
3. Accounting, Auditing Matters, and
Public Disclosure Obligations
The Company’s requirement that
directors, officers, and employees follow the highest ethical standards
applies directly to all actions which involve business accounting,
financial reporting, internal accounting controls, auditing matters, and
public disclosure obligations. Full, fair, accurate, timely, and
understandable disclosure is required in all reports and documents that
the Company files with, or submits to, the Securities Exchange Commission
and in any other public communications.
The Audit Committee of the
Company has adopted special procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting
controls, or auditing matters. These procedures are set out in Sections 15
and 16 of this Code.
4. Conflicts of Interest
A
“conflict of interest” exists when a person’s private interest may or does
interfere with the interests of the Company. A conflict can arise when a
director, officer, or employee takes actions or has interests that may
make it difficult to perform his or her Company work objectively and
effectively. Conflicts of interest may also arise when a director,
officer, or employee, or member of his or her family, receives improper
personal benefits as a result of his or her position with the Company.
It is almost always a conflict of interest for a Company employee to
work simultaneously for a competitor, customer or supplier. Employees are
not allowed to work for a competitor as a consultant or board member. The
best policy is to avoid any direct or indirect business connection with
our competitors, customers or suppliers, except on our behalf. Conflicts
of interest are prohibited as a matter of Company policy, except in
circumstances approved by the Board Directors or the Audit Committee of
the Board.
Conflicts of interest may not always be
clear-cut, so if you have a question, you should consult with higher
levels of management. Any director, officer, or employee who becomes aware
of a conflict or potential conflict should bring it to the attention of a
supervisor or follow the procedures described in Sections 15 and 16 of
this Code.
Directors, officers, and employees owe a duty to the
Company to advance its legitimate interests when the opportunity to do so
arises. In particular:
• Payments, etc. Received by Company Personnel – No payments, loans, employment or promises of employment, investment opportunities, vacation trips, gifts or entertainment (other than entertainment conforming to generally accepted business practices or gifts of nominal value not reasonably calculated to influence a decision) may be offered to or accepted by any director, officer, or employee or a relative of such a person as a condition of the initial or continued engagement of a consultant, broker, vendor or third party working for the Company.• Payments, etc. Provided to Company Vendors and Customers – No payments (other than fees for services), loans, employment or promises of employment, investment opportunities, vacation trips, gifts or entertainment (other than entertainment conforming to generally accepted business practices or gifts of nominal value not reasonably calculated to influence a decision) may be offered to or accepted by any consultant, broker, vendor, government official or a relative of such third party in connection with any services being performed for the Company.• Kickbacks, etc. – No director, officer, or employee may recommend any third party for work for the Company on a project or development of the Company where the third party's compensation is paid on the basis of any kickback or fee sharing arrangement with the director, officer, or employee, nor may a director, officer, or employee recommend any third party without full disclosure and written approval by the President and Chief Executive Officer, if such third party has any familial or pre-existing monetary relationship with the director, officer or employee or if such director, officer, or employee has an equity or stock ownership position in such third party.• Political Contributions – No employee shall, in his capacity as an employee, make any loan, donation, contribution or payment to a political party, candidate, or political action committee, for or on behalf of the Company or any project or development in which the Company is engaged, nor shall an employee of the Company reimburse any individual who does. (Nothing contained in this tenet shall prohibit an employee from taking any of the above actions in his or her name, provided that the action is exclusively on the employee's own accord and is not an indirect means of accomplishing one of the prohibited actions).• Use of Company Property – No employee shall use or appropriate materials, property, equipment, systems and procedures (if proprietary in nature) owned by the Company for his or her own personal financial gain except to the extent necessary for the performance of his or her duties for the Company.• Personal Use of Company Vendors – No employee shall purchase or obtain any goods or services from any of the Company’s vendors or suppliers on terms (including pricing or other benefits) that are substantially different from those available to all Company employees without the prior written approval of the President of the Company.• Gifts – In short, the purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should be offered, given, provided or accepted by any Company employee or family member of an employee unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe and is not reasonably calculated to influence a decision and (5) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts which you are not certain are appropriate.
5. Insider
Trading
Directors, officers, or employees who have access to
confidential information are not permitted to use or share that
information for stock trading purposes or for any other purpose except the
conduct of our business and in strict conformance with all applicable laws
and SEC regulations. All non-public information about the Company should
be considered confidential information. To use 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 Company’s policy on insider trading is set forth more fully
in the “Procedures and Guidelines Governing Insider Trading and Tipping”
furnished to all directors, officers, and employees. If you have any
questions, please consult the Company’s Chief Financial Officer or the
Senior Vice President of Finance and Taxation.
6. Competition and Fair Dealing
We seek to outperform our competition fairly and honestly. We
seek competitive advantages through superior performance, never through
unethical or illegal business practices. Stealing proprietary information,
possessing trade secret information that was obtained without the owner’s
consent, or inducing such disclosures by past or present employees of
other companies is prohibited. Each employee should endeavor to respect
the rights of and deal fairly with the Company’s customers, suppliers,
competitors and employees. No employee should take unfair advantage of
anyone through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any other intentional
unfair-dealing practice.
7. Discrimination, Harassment and
Retaliation
The diversity of the Company’s employees is a
tremendous asset. We are firmly committed to providing equal opportunity
in all aspects of employment and will not tolerate discrimination,
harassment or retaliation. The Company’s policy against discrimination
applies to any legally protected status including race, color, gender,
religion, national origin, disability, veteran status, and age. This
policy also prohibits discrimination against any person who provides
information to a federal regulatory or law enforcement agency, a member of
Congress or any committee of Congress, or to a supervisor concerning
conduct which the employee reasonably believes constitutes a violation of
securities laws or any provision of federal law relating to fraud against
stockholders. The Company also prohibits discriminatory harassment of any
employee covered by the policy against discrimination.
No director, officer, or employee may retaliate against an individual for bringing a complaint of discrimination or for participating in an investigation or proceeding involving a complaint of discrimination.
No one may take any action harmful to any person for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense.
8. Health and Safety
The
Company strives to provide each employee with a safe and healthful work
environment. Each employee has responsibility for maintaining a safe and
healthy workplace for all employees by following safety and health rules
and practices and reporting accidents, injuries and unsafe conditions.
Violence and threatening behavior are not permitted. Employees should
report to work in condition to perform their duties, free from the
influence of illegal drugs or alcohol. The use of illegal drugs in the
workplace will not be tolerated.
9. Record-Keeping
The
Company requires honest and accurate recording and reporting of
information in order to make responsible business decisions. For example,
only the true and actual number of hours worked should be reported.
Many employees regularly use business expense accounts, which must be
documented and recorded accurately. If you are not sure whether a certain
expense is legitimate, ask your supervisor or a manager in the Accounting
department.
All of the Company’s books, records, accounts and financial
statements must be maintained in reasonable detail, must appropriately
reflect the Company’s transactions and must conform both to applicable
legal requirements and to the Company’s system of internal
controls.
Business records and communications often become public, and all employees should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people, events, situations and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation please consult the Company’s senior management.
10. Confidentiality
Employees must maintain the confidentiality of the
information entrusted to them by the Company or its customers, except when
disclosure is authorized by the President and Chief Executive Officer, the
Chief Financial Officer or a Senior Vice President or required by law.
Confidential information includes all non-public information that might be
of use to competitors, or harmful to the Company or its customers, if
disclosed. It also includes information that suppliers and customers have
entrusted to us. The obligation to preserve confidential information
continues even after employment ends.
11. Protection and Proper Use of
Company Assets
All employees should endeavor to protect the
Company’s assets and ensure their efficient use. Theft, carelessness and
waste have a direct impact on the Company’s profitability. Any suspected
incident of fraud or theft should be immediately reported for
investigation to either the Company’s Senior Vice President of Operations
or Chief Financial Officer.
The obligation of employees to protect the
Company’s assets includes the Company’s proprietary information.
Proprietary information includes, but is not limited to, business,
marketing and service plans, records, salary information and any
unpublished financial data and reports. Unauthorized use or distribution
of this information would violate Company policy. It could also be illegal
and result in civil or even criminal penalties.
12. Payments to Government Personnel
The U.S. Foreign Corrupt Practices Act prohibits giving
anything of value, directly or indirectly, to officials of foreign
governments or foreign political candidates in order to obtain or retain
business. It is strictly prohibited to make illegal payments to government
officials of any country. In addition, the U.S. government has a number of
laws and regulations regarding business gratuities which may be accepted
by U.S. government personnel. The promise, offer or delivery to an
official or employee of the U.S. government of a gift, favor or other
gratuity in violation of these rules would not only violate Company policy
but could also be a criminal offense. State and local governments, as well
as foreign governments, may have similar rules. The Human Resources
department can provide guidance to you in this area.
13. Waivers of the Code of Business
Conduct and Ethics
Any waiver of this Code for executive
officers and directors may be made only by the Board of Directors or a
committee of the Board of Directors with specific delegated authority and
will be promptly disclosed to stockholders as required by the Securities
Exchange Act of 1934 and the rules and regulations thereunder and the
applicable rules and regulations of the National Association of Securities
Dealers, as adopted and enforced by Nasdaq.
14. Personal Responsibility
We must all work to ensure prompt and consistent action
against violations of this Code. However, in some situations it is
difficult to know right from wrong. Since we cannot anticipate every
situation that will arise, it is important that we have a way to approach
a new question or problem. These are the steps to keep in
mind:
• Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
• Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
• Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
• Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems.
• Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your immediate supervisor with your question, discuss it locally with your second-level manager, the executive officer who heads your functional area, or with the Vice President of Human Resources .
• You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
• Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.
15. General Reporting and Investigation
Procedures; Sanctions
Any employee who
reasonably believes that there has been a material violation of this Code
of Conduct should report it immediately to either the Company’s Chief
Financial Officer, so long as those violations do not pertain to any
activities under the control of the CFO (including accounting, internal
controls and auditing matters), or the Audit Committee of the Company’s
Board of Directors. Failure to report a known material violation of this
Code of Conduct is, in itself, a violation of this Code. The CFO and/or
Audit Committee (or their designees) will promptly investigate the matter.
The investigation will be handled discreetly and appropriately, and the
information will be disclosed to others only on a need to know basis and
as required by law. There will be no adverse action taken against
employees who report violations of the Code of Conduct or who participate
in the investigation. If the investigation leads to a conclusion that a
material violation of the Code of Conduct has occurred, the Company will
take appropriate corrective action which may include dismissal.
The
Company recognizes the potentially serious impact of a false accusation.
Employees are expected as part of the ethical standards required by this
Code of Conduct to act responsibly in making complaints. Making a
complaint without a good faith basis is itself an ethical violation. Any
employee who makes a complaint in bad faith will be subject to appropriate
corrective action up to and including dismissal.
16. Special Procedures for Reporting of
Complaints Regarding Accounting, Internal Accounting Controls, and
Auditing Matters
Any employee who reasonably believes that there has been a material
violation of this Code of Conduct caused by questionable accounting
or auditing matters has the right to submit a confidential, anonymous
complaint to the Company’s Audit Committee. The complaint should be
made in written form (e-mail) and provide sufficient information so
that a reasonable investigation can be conducted. The complaint should
be marked “Personal and Confidential” and sent via e-mail, addressed
to the Audit Committee
Audit-Committee@enpointe.com.