Exhibit 14
Authentidate Holding Corp. (“AHC”) Code of Ethics and Conduct
1. | Introduction to and Administration of the AHC Code of Ethics and Conduct |
1.1 Introduction. AHC has adopted this Code of Ethics and Conduct (the “Code”) to advise all AHC Employees of the ethical and legal standards that we expect you to observe when dealing with AHC, your AHC colleagues, our customers and our vendors. When you encounter ethical or legal issues where you are not certain about the correct course of action, you should apply the principles described in this Code as guideposts in deciding how to proceed. We have adopted this Code to give you guidance for resolving these questions. When you are in doubt about the correct or best course of action, you should always consider consulting your manager or our Chief Financial Officer or Human Resources director for guidance. AHC expects all AHC Employees to adhere to this Code and to comply with all legal requirements. Accordingly, we have established a procedure for reporting suspected violations of the Code. Any violations of the Code may result in disciplinary action, including termination of employment. These matters are described in more detail below. Throughout this Code, we use the terms “AHC Employees”, “you” and “your” to refer to all AHC employees, directors and independent contractors, and the terms “AHC”, the “company”, “we” and “our” to refer to AHC and its subsidiaries.
1.2 | Administration |
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2. | Conflicts of Interest |
2.1 Generally. All AHC Employees have a duty of loyalty to act in the best interests of the company. The business decisions and actions of AHC Employees must never be influenced by personal considerations or personal relationships. AHC Employees should avoid any relationship or activity that might impair, or appear to impair, their ability to make objective and fair business decisions. Generally, a conflict of interest arises whenever your personal interests diverge from your responsibilities to AHC or from AHC’s best interests. For example, a conflict of interest may occur when family members or close personal friends are involved in business relationships with you, either inside or outside the company. Other examples of potential conflicts of interest include, but are not limited to:
• | employment by an actual or potential competitor, customer, vendor or regulator while you are employed by AHC; |
• | acceptance of gifts, payments, products or anything of value from anyone seeking to do business with AHC; |
• | placement of AHC business with an entity in which you or a family member has a financial interest; |
• | Appropriating or diverting to yourself or others any business opportunity or idea in which AHC might have an interest; and |
• | a significant ownership interest in a AHC competitor. |
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2.2 Use of Company Assets. You are responsible for the proper use of AHC's assets and property, as well as its proprietary information. Our offices, equipment, supplies and other resources may not be used for activities which are not related to your employment with AHC, except for any activities that have been approved in writing in advance by us, or for personal usage that is minor in amount and reasonable. If you are found to be engaging in, or attempting, theft of any AHC property, including without limitation, documents, equipment, intellectual property, personal property of other employees, you may be subject to immediate termination of your employment and we reserve the right to refer the matter for criminal proceedings. We expect you to report any theft or attempted theft to your manager or our Human Resources director.
2.3 Gifts, Gratuities and Entertainment. You may not offer money, gifts or other items or products of value to customers or potential customers for the purpose of securing a contract or obtaining favorable treatment. Business-connected favors or gifts may not be extended to customers or vendors (current or prospective), unless they (a) are consistent with customary business practices; (b) do not have substantial monetary value and would not be viewed as improper by others; and (c) do not violate applicable laws or regulations. Business entertainment in the form of meals and beverages or other entertainment may be offered only if these activities and related expenses are modest and infrequent.
3. | Laws and Regulations |
3.1 Generally. All AHC Employees are to comply with all applicable local, state and federal laws and regulations, both domestic and international, and refrain from illegal, dishonest or unethical conduct. Although laws and regulations may sometimes be difficult to interpret, we expect you to make a good-faith effort to follow both the letter and the spirit of the law. You must consult your manager or our Human Resources director if you are uncertain as to whether a specific act or omission is legal. In addition, all AHC Employees are to comply with all applicable AHC policies and procedures. This includes, but is not limited to, our policies on equal opportunity, harassment, drug-free workplace, computer usage and information technology, data protection, expense reimbursement and travel, as well as our internal financial controls and procedures. We may modify or update these policies and procedures in the future, and adopt new company policies and procedures from time to time. You must ensure that you remain aware of all such changes to these policies. You are also expected to observe the terms of any Non-Disclosure, Non-Solicitation or Non-Compete Agreement, Employment Agreement or other similar agreement that applies to you. If you previously signed one of these agreements with AHC, it remains in full force and effect.
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3.2 Bribes. Bribery is illegal and subject to criminal penalties. You may not give any bribes, kickbacks or other similar considerations to any person or organization to attract business. All decisions regarding the purchasing of materials, supplies, products and services must be made on the basis of competitive price, quality and performance, and in a way that preserves AHC’s integrity. Fees, commissions or other amounts paid to outside consultants, agents or other third parties must be fully disclosed to our Chief Financial Officer or Controller, and must be legal, proper and reasonable.
3.3 International Operations. You are expected to comply with the legal requirements and ethical standards of each country in which you conduct AHC business, as well as with all U.S. laws applicable in other countries. The U.S. Foreign Corrupt Practices Act (FCPA) applies to business transactions both inside the United States and in other countries. Its requirements relate to accurate and complete financial recording, transactions with foreign government officials and restrictions on the use of funds for unlawful or improper purposes. The FCPA makes illegal any corrupt offer, payment, promise to pay, or authorization to pay any money, gift, or anything of value to any foreign official, or any foreign political party, candidate or official, for the purpose of:
• | Influencing any act, or failure to act, in the official capacity of that foreign official or party; or |
• | Inducing the foreign official or party to use influence to affect a decision of a foreign government or agency, in order to obtain or retain business for anyone, or direct business to anyone. |
3.4 Political Activity. You should not make political contributions in a way that might appear to be an endorsement or contribution by AHC. We will not reimburse you for political contributions under any circumstances.
3.5 Antitrust Considerations. Antitrust laws prohibit agreements or actions that restrain trade or reduce competition. Violation of antitrust laws can result in severe civil and criminal penalties, including imprisonment for individuals, and AHC can be subjected to substantial fines and monetary awards. AHC as a company avoids conduct that may even appear to be questionable under antitrust laws and expects all AHC Employees to carry out company business consistent with this policy. In all contacts with our competitors, you are expected to avoid discussing prices, costs, competition, market share, marketing plans or studies, and any other proprietary or confidential information. Examples of agreements or arrangements with competitors which should therefore be avoided include: (a) Agreements that affect the price or other terms or conditions of sale; (b) Agreements regarding the customer to whom AHC will, or will not, sell its products; (c) Agreements to refuse to buy from particular vendors; and (d) Agreements that limit the types of products which AHC will provide. Furthermore, AHC cannot coerce customers into complying with restrictive arrangements. Therefore, you should not negotiate agreements with customers without the approval of an authorized company officer which (a) require or prohibit customers from purchasing all of their requirements from AHC or other companies or (b) require customers to buy one AHC product as a condition of obtaining another. In all cases where there is question or doubt about a particular activity or practice, AHC Employees should promptly contact our Chief Financial Officer or Human Resources director.
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3.6 Securities Laws and Insider Trading. AHC is a publicly-traded company. As an employee of AHC you have been subject to AHC’s policy against insider trading as set forth in the Employee Handbook previously distributed to you. Simply stated, material, non-public information is not to be used for personal gain, and you should not trade in AHC stock when you possess such information. If you have any question regarding whether it is appropriate to engage in any transaction, contact the Chief Financial Officer.
3.7 Government Contracting. AHC frequently does business with federal, state or local government agencies in the United States and in other countries. All AHC Employees engaged in business with these government entities must comply with specific rules and regulations concerning relations with these entities. Important considerations for doing business with government entities include:
• | Not offering or accepting kickbacks, bribes, gifts, or anything else of value with the intent of obtaining favorable treatment from the recipient (note that a gift that is customary in the private sector may be impermissible to a government entity); and |
• | Not improperly soliciting or obtaining confidential information, such as sealed competitors' bids, from government officials prior to the award of a contract. |
3.8 Retention of Documents. Certain documents and records must be retained for specific periods of time to comply with legal and regulatory requirements or contractual obligations. You are to comply with all document retention requirements applicable to your work. If you are uncertain whether the documents or records you are handling are subject to these requirements, please consult with your manager or our Chief Financial Officer. If at any time you become aware that any document or record may be required to be disclosed in connection with a lawsuit or government investigation, you must preserve all possibly relevant documents. This means that you must immediately cease disposing of or altering all potentially relevant documents, even if that activity is ordinary or routine. If you are uncertain whether documents or records under your control should be preserved because they might relate to a lawsuit or investigation, you should contact your manager or our Chief Financial Officer.
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4. | Confidentiality |
4.1 AHC Confidential Information. You will often have access to information that is confidential and proprietary to AHC, has not been made public and constitutes trade secrets or proprietary information. Protection of this information is critical to our success. Your obligations with respect to our confidential trade secrets and proprietary information are:
• | Not to disclose the information outside of AHC; |
• | Not to use the information for any purpose except to benefit AHC’s business; and |
• | Not to disclose the information within AHC, except to other AHC Employees who need to know, or use, the information and are aware that it constitutes a trade secret or proprietary information. |
4.2 Confidential Information of Third Parties. In the normal course of business, you will acquire information about others, including customers, vendors and competitors. We properly gather this kind of information for such purposes as evaluating customers’ business needs, determining requirements and evaluating vendors. We also collect information on competitors from a variety of legitimate sources to evaluate the relative merits of our products and marketing methods. You may not use information obtained from our customers or vendors in any way that harms them or violates contractual obligations to them. When working with sensitive information about customers or vendors, you should use that information only for the purposes for which it was disclosed to you and make it available only to other AHC Employees with a legitimate “need to know”.
4.3 Inadvertent Disclosure. In order to avoid the inadvertent disclosure of any confidential information, you should never discuss with any unauthorized person (whether or not an AHC Employee) any information that AHC considers confidential or which we have not made public. You should also not discuss this information with family members or with friends, as they may unintentionally pass the information on to someone else.
4.4 Contacts with Reporters, Analysts and Other Media. Because of the importance of the legal requirements regarding disclosure of certain information to our investors, we must ensure the accuracy of any information regarding our business, financial condition or operating results that is released to the public. As a result, you should not discuss internal AHC matters with anyone outside of AHC, except as clearly required in the performance of your job duties. This prohibition applies particularly to inquiries about AHC made by the news media, securities analysts and investors. All responses to these inquiries must be made only by the following authorized persons: our Chief Executive Officer, Chief Financial Officer or any individuals specifically designated by them. Only these individuals are authorized to discuss information about AHC with the news media, securities analysts and investors. If you receive inquiries from these sources, you should immediately refer them to one of these authorized spokespersons.
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5. | Duties of Financial Reporting Personnel; Accounting and Financial Records and Disclosure |
5.1 General. AHC has a responsibility to maintain complete, accurate and reliable records of our business and must comply with various disclosure requirements imposed by the United States Securities and Exchange Commission and by any exchange on which its securities are listed for trading. AHC’s executive officers, the heads of AHC’s subsidiaries and operating divisions and members of AHC’s finance department have a special role in the preparation of these reports. To satisfy these requirements, AHC has implemented procedures to ensure that only proper transactions are entered into by the Company, that such transactions have proper management approval, that such transactions are properly accounted for in the books and records of the Company and that the reports and financial statements of the Company fairly and accurately reflect such transactions. All AHC Financial Reporting Personnel are to familiarize themselves with these policies, accounting controls, procedures and records and comply with these requirements. Ultimately, AHC’s Financial Reporting Personnel bear significant responsibility for the accuracy and timeliness of disclosures in reports and documents AHC files with or submits to the Securities and Exchange Commission and in other public communications.
• | Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate, timely, and understandable disclosure in reports and documents that AHC files with, or submits to, government agencies and in other public communications. |
• | Comply with rules and regulations of federal, state and local governments, and other appropriate private and public regulatory agencies. |
• | Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be subordinated. |
• | Respect the confidentiality of information acquired in the course of work except when authorized or otherwise legally obligated to disclose. |
• | Promptly report to the Audit Committee any conduct that the individual believes to be a violation of law or business ethics or of any provision of this Code, including any transaction or relationship that reasonably could be expected to give rise to such a conflict. |
5.2 Disclosures to Investors; Financial Reporting Considerations. AHC is required under U.S. federal securities laws to provide the public with periodic disclosure regarding our business and financial condition (such as quarterly and annual reports and materials for our annual stockholders’ meeting). We provide additional disclosures to the public through quarterly earnings releases and other press releases. All AHC Employees who participate in the preparation or dissemination of this information, or who provide information that they know may be used in the preparation of these disclosures, have a legal and ethical duty to ensure that the content of the disclosures is accurate, complete and timely. We have created disclosure controls and procedures which are designed to ensure that all public disclosures are accurate, complete and timely.
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5.3 Accounting and Financial Records. AHC is required under U.S. federal securities laws and generally accepted accounting principles to keep books, records and accounts that accurately reflect all transactions and to provide an adequate system of internal accounting and controls. We expect you to ensure that those portions of our books, records and accounts for which you have responsibility are valid, complete, accurate and supported by appropriate documentation in verifiable form.
• | Improperly accelerate or defer expenses or revenues to achieve financial results or goals; |
• | Maintain any undisclosed or unrecorded funds or “off the book” assets; |
• | Establish or maintain improper, misleading, incomplete or fraudulent accounting documentation or financial reporting; |
• | Record revenue for any project that has not fully complied with AHC's revenue recognition guidelines; |
• | Make any payment for purposes other than those described in the documents supporting the payment; |
• | Submit or approve any expense report where you know or suspect that any portion of the underlying expenses were not incurred or are not accurate; or |
• | Sign any documents believed to be inaccurate or untruthful. |
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5.5 Confidentiality Considerations; Securities Law Compliance. All Financial Reporting Personnel will have special access to AHC’s confidential financial information. This may include non-public reports and analyses, pro-forma financial statements and other draft or preliminary financial information. AHC’s Financial Reporting Personnel should (i) never disclose this information to individuals outside the Company and (ii) caution individuals within the Company to whom you provide such information to carefully maintain its confidentiality and prevent its disclosure. AHC’s Financial Reporting Personnel must also apply the utmost consideration to transactions involving AHC securities in light of their possession to confidential financial information. Financial Reporting Personnel are therefore expected to notify our Chief Financial Officer prior to engaging in any transactions involving AHC securities in order to ensure compliance with all securities laws and regulations. Similarly, AHC imposes periodic blackout periods during which Financial Reporting Personnel may not engage in transactions involving AHC securities. All Financial Reporting Personnel should notify our Chief Financial Officer before purchasing or selling any AHC securities in order to obtain clearance from the Chief Financial Officer that the proposed transaction complies with all securities laws and regulations and AHC policies.
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