Exhibit 14.1
COMPETITIVE TECHNOLOGIES, INC.
Corporate Standards of Conduct
1. Introduction
Competitive Technologies, Inc.'s (the "Company") financial
success, value to society and the respect it earns depend not
only on the Company's financial performance, but also on the
principles under which the Company does business and its
directors', officers', and employees' reputation for integrity,
excellence and service. Pride in our Company must be based both
on what we accomplish and how we accomplish it.
The policies that follow reflect the philosophy that the
Company's integrity is a fundamental and valuable asset.
These Standards go beyond the letter of the law. Where possible,
guidance provided by these policies is specific. However, there
are cases in which specific guidance is not feasible. Therefore,
the most important source of guidance must be each individual's
good judgment, sensitivity to what is right, and strong desire to
do nothing that might bring discredit upon the individual or the
Company.
All of the Company's officers, directors and employees,
wherever they may be located, must read these Standards of
Conduct and be familiar with them. Adherence to these Standards
is a condition of employment. These Standards of Conduct govern
the relationship between the Company and its directors, officers
and employees; they are not intended, however, to confer on any
party other than the Company any additional rights or remedies.
These Standards of Conduct apply to the officers, directors and
employees of all subsidiaries of the Company, and references in
these Standards to the "Company" include, unless the context
requires otherwise, officers, directors and employees of such
subsidiaries.
2. Corporate Compliance Officer
The Company's Board of Directors has designated Paul
Levitsky to be the Corporate Compliance Officer and has charged
him with the responsibility for ensuring that these Standards of
Conduct and the Company's related policies and procedures govern
the business activities of all Company directors, officers and
employees.
You may contact the Corporate Compliance Officer by calling (203)
255-6044.
3. Duty to Seek Guidance
The designation of a Corporate Compliance Officer in no way
diminishes your responsibility to comply with these Standards of
Conduct and the Company's related policies and procedures, nor
does it diminish every supervisor's responsibility to ensure that
those employees for whom he or she has responsibility comply with
these Standards of Conduct and related policies and procedures.
If you have any questions regarding these Standards of Conduct or
how to comply with them, you have a duty to seek guidance from
your immediate supervisor or the Corporate Compliance Officer.
4. Duty to Report Violations
If you have knowledge of a violation of these policies
and/or of questionable or improper behavior, you should report
the matter to your immediate supervisor and to the Corporate
Compliance Officer.
If the foregoing reporting requirements are inappropriate
under the circumstances, violations should be reported to the
Chairman of the Audit Committee of the Board of Directors.
5. Compliance with the Law
It is the Company's objective that its business at all times
be conducted in compliance with applicable laws, regulations and
government requirements.
6. Policy on Harassment
It is the Company's express policy that everyone is
responsible for assuring that the workplace is free of sexual
harassment and harassment based on any other protected
classification (as listed in our Policy on Discrimination).
The Company is committed to providing a work environment
that is free of discrimination and unlawful harassment. Because
of the Company's strong disapproval of offensive and
inappropriate sexual behavior, all directors, officers and
employees must avoid any action or conduct which could be viewed
as sexual harassment. It is illegal and against Company policy
for any director, officer or employee to sexually harass another
employee by:
(a) making unwelcome sexual advances, requests for sexual favors
and other verbal or physical conduct of a sexual nature a
condition of an employee's employment; or
(b) creating an intimidating, hostile or offensive work
environment by such conduct.
Similarly, actions, words, jokes, or comments based on an
individual's sex, race, ethnicity, age, religion, or any other
legally protected characteristic will not be tolerated. Sexual
harassment (both overt and subtle) is a form of misconduct that
is demeaning to another person, undermines the integrity of the
employment relationship, and is strictly prohibited.
Any director, officer or employee who wants to report an
incident of sexual harassment or other unlawful discrimination or
harassment should promptly report the matter to the Corporate
Compliance Officer. If the Corporate Compliance Officer is
unavailable or the director, officer or employee believes it
would be inappropriate to contact that person, the director,
officer or employee should immediately contact the Chairman of
the Audit Committee of the Board of Directors or any other
officer of the Company so the Company can properly investigate
the matter. Employees can raise concerns and make reports
without fear of reprisal.
Any officer, director or supervisor who becomes aware of
possible sexual harassment or other unlawful discrimination or
harassment should promptly advise the Corporate Compliance
Officer or the Chairman of the Audit Committee of the Board of
Directors or any other officer who will handle the matter in a
timely and confidential manner.
Anyone engaging in sexual or other unlawful discrimination
or harassment will be subject to disciplinary action, up to and
including termination of employment.
7. Policy on Discrimination
Discrimination has no place in workplace decisions. The
Company is committed to allowing employees to progress based on
their talents. No employment decision may be based on, for
example, an employee's or employment applicant's race, color,
sex, religion, age, national origin, marital status, or sexual
orientation. Each director, officer and employee is subject to
this standard. The Corporate Compliance Officer is the officer
responsible for enforcement of this policy. If you believe that
this policy has been violated, contact him immediately.
8. Non-Fraternization Policy
1. Restrictions on Dating and Romantic Relationships
The Company recognizes that potential problems may arise
when directors, officers or employees engage in romantic or
sexual relationships (collectively referred to as "romantic
relationships") with other officers, directors, employees or
individuals having business relationships with the Company. The
Company has adopted this policy in recognition of its
responsibility to provide guidelines on and caution officers,
directors and employees of the potential problems posed by
romantic relationships with other officers, directors, employees
or business relations. Potential problems posed by dating and
romance in the workplace include conflicts of interest, sexual
harassment, and discord that can interfere with the productivity
of officers, directors and employees. These problems can be
particularly serious in situations in which one person has a
position of authority over the other, such as in a supervisor-
subordinate relationship. Accordingly, the Company has adopted
the following policy and guidelines:
- -The Company prohibits supervisory personnel from dating or
engaging in romantic relationships with non-supervisory
personnel. This prohibition extends to cover relationships
between directors or officers of the Company and non-officers of
the Company.
- -The Company strongly discourages all directors, officers and
employees from engaging in romantic relationships with other
directors, officers or employees.
- -The Company prohibits dating or engaging in romantic
relationships between officers, directors, employees and the
Company's business relations (such as the Company's independent
contractors, representatives, vendors, clients, and other persons
or entities that do business (or seek to do business) with the
Company) or officers, directors, or employees of the Company's
business relations (collectively "Business Relations"). This
restriction applies whenever there is the potential of misuse or
abuse of power.
2. General
General provisions applicable to this policy are as follows:
- -The restrictions in this policy apply whenever there is a
potential abuse or misuse of power or where decisions potentially
may be made for reasons other than the sole benefit of the
Company, including without limitation decisions regarding the
hire, discharge or other terms and conditions relating to
employees, or the dealings with current or potential vendors,
clients or other Business Relations.
- -The term "romantic relationship," as used in this policy,
includes, but is not limited to: casual dating, serious dating,
casual sexual involvement where the parties have no intention of
carrying on a long-term relationship, cohabitation, and any other
conduct or behavior normally associated with romantic or sexual
relationships.
- -This policy is not intended to discourage friendships between
co-workers or between supervisory and non-supervisory personnel.
Relationships with clients and Business Relations must remain on
a professional level at all times and be solely for the Company's
benefit.
- -The restrictions on romantic relationships apply regardless of
the sexual orientation of the parties involved. Thus, this
policy applies equally to opposite-sex and same-sex
relationships. This policy will be implemented in a
nondiscriminatory manner and the Company shall take any steps
necessary to avoid disparate impact on either sex.
- -This policy applies only to consensual romantic or sexual
relationships between officers, directors or employees. Unwanted
sexual attention (including physical contact) and sexually
oriented behavior with the purpose or effect of creating an
offensive environment is strictly prohibited in all instances.
See the Company's Sexual Harassment Policy.
3. Reporting Requirements and Possible Corporate Action
As discussed below, any relationships prohibited or
discouraged by this policy must be immediately reported to the
Company. The Company will strive to receive and respond to these
disclosures in a confidential manner.
A. Between Non-Supervisory Employees Or Between
Supervisory Employees
Any romantic relationship between two non-supervisory co-
workers or between two supervisory employees must be disclosed
promptly, by one or both of the persons involved, to the
Corporate Compliance Officer. The Corporate Compliance Officer
shall assess the situation and make a determination or
recommendation to resolve any actual or potential conflict of
interest or impropriety created by the relationship. The purpose
of this review is to avoid any potential detrimental business
consequences of the romantic relationship, considering its impact
on both persons involved and on the Company as a whole. Based on
this review, the Corporate Compliance Officer may make
recommendations regarding appropriate action, which might include
any of the following:
- -Requiring both parties to the relationship to sign a written
statement affirming that the relationship is consensual for both
partners. Any change in the consensual nature of the
relationship must be reported immediately, by either party, to
the Corporate Compliance Officer.
- -Requiring the dating couple to select one partner to resign.
- -Such other actions to insure that the parties to the
relationship neither report to one another nor work together in a
way which will affect their performance or their independent
decision making solely for the Company's benefit.
B. Between Supervisory and Non-Supervisory Employees
To avoid any potential abuse of power, any romantic
relationship between a supervisor and non-supervisory employee
must be disclosed promptly to the Corporate Compliance Officer.
If the relationship involves a director or a corporate executive
officer, the relationship also must be disclosed to the Board of
Directors. The Corporate Compliance Officer and/or the Board
shall review the situation and make a determination or
recommendation to resolve any actual or potential conflict of
interest or impropriety created by the relationship. Such action
may include any of the examples listed in Section A or any other
action which the Corporate Compliance Officer or Board deems
appropriate under the circumstances.
C. Between an Officer, Director or an Employee and a
Business Relation
Any romantic relationship between an officer, a director or
an employee and a Business Relation must be disclosed promptly to
the Corporate Compliance Officer. If the relationship involves a
corporate executive officer, the relationship also must be
disclosed to the Board of Directors. The Corporate Compliance
Officer and/or the Board shall assess the situation and make a
determination or recommendation to resolve any actual or
potential conflict of interest or impropriety created by the
relationship.
4. Failure to Comply
Any employee who fails to comply with the disclosure requirements
in this policy or the recommended action that the Company deems
necessary to resolve a conflict, or otherwise violates this
policy, is subject to disciplinary action up to and including
termination of employment.
9. Nepotism Policy
The Company recognizes that potential problems may arise
through the employment of relatives. Such employment can result
in favoritism, breach of confidentiality and disciplinary
problems, or the perception of such problems, especially when
relatives work in the same department or have a reporting
relationship. The Company has developed this policy to better
assure that employees are treated on a consistent basis and
without favoritism. For purposes of this policy, "relative" is
defined as a spouse, child, grandchild, parent, parent-in-law,
grandparent, sibling, or sibling-in-law. Without prior notice
and approval, the Company shall not employ, hire or utilize in
any capacity, whether as an employee, independent contractor or
other business relation, the relative of any director, officer or
employee.
The Company may hire qualified relatives of employees if
prior notice is given to and advance clearance of the
relationship is provided by the Corporate Compliance Officer.
Relatives may not have a reporting relationship. Similarly, no
employee transfers will be permitted which will cause this
situation to occur. If two employees with a reporting
relationship become related while employed, the Company will
attempt to locate a suitable position to which one of the
relatives may transfer. If no suitable position is available,
one of the employees may have to resign. Employees in this
situation are expected to cooperate with the Company in its
determination as to how to address such a situation.
Similarly, the Company will not retain or use the services
of an employee's relative in any of its business relations (such
as the Company's independent contractors, representatives,
vendors, clients, and other persons or entities that do business
with the Company) except with advance disclosure to and clearance
from the Corporate Compliance Officer.
Approval for employment of relatives under this Policy must be
granted in advance by the Corporate Compliance Officer. If the
situation involves a corporate officer or director, approval also
must be given by a majority of the Company's Board of Directors.
10. Authority to Sign Contracts and Incur Obligations
Only the President or an officer specifically designated by
the President or the Board of Directors can sign contracts or
otherwise incur obligations on behalf of the Company involving
amounts in excess of $10,000. Any such designation by the
President must be as to a specific transaction or matter, and not
a blanket grant of authority. Absent a specific designation or
approval of the Board of Directors or the President, an officer
or other employee of the Company is only authorized to sign
contracts or otherwise incur obligations on behalf of the Company
that are normally within the scope of such officer's or
employee's duties and (i) are entered into in the ordinary
course of business, or (ii) involve amounts not greater than
$10,000 in the aggregate.
11. Prohibited Payments
Bribery, kickbacks or other improper payments have no place
in the Company's business. No payment from Company funds or
assets shall be made to or for the benefit of any director,
officer or employee of any domestic or foreign entity, a
representative of any domestic or foreign entity, a labor union
or any current or prospective customer or supplier, for the
purpose of improperly obtaining a desired government action, or
any sale, purchase, contract or other commercial benefit. These
same standards should govern your contacts with those in the
private sector. Entertainment of business prospects must be
reasonable and documented carefully.
This prohibition is intended to prevent bribes, kickbacks
and similar payments. It covers both direct payments and
indirect payments, such as through a consultant or other third
party or by reimbursement of Company directors, officers or
employees for payments made personally by them. In addition, the
Company's directors, officers and employees shall not directly or
indirectly accept any payments of the types described above.
12. Political Contributions
No Company contributions shall be made to support the
campaign of any candidate seeking political office or the
activities of any political party except as permitted under U.S.
law. Contributions include direct payments, purchase of tickets
to fund-raising events, and provision of Company-paid employees,
facilities, equipment, transportation or other services to a
candidate seeking political office or to political committees.
Corporate political contributions may be made only upon receipt
of written authorization of the Company's President or Board of
Directors.
The Company encourages individual participation by
directors, officers and employees in political activity and
directors', officers' and employees' personal financial support
for the candidate or political party of their choice. In
addition to the above, Company-sponsored public affairs programs
and support for the activities of a political action committee
conducted in accordance with applicable laws are permitted.
13. Relationship with Government Entities and
Officials
The Company's relationships and contacts with government
entities and officials must be proper. Company directors,
officers and employees must avoid impropriety and exercise
judgment to avoid the appearance of impropriety in their and the
Company's relationships and dealings with any government entity
or official.
14. Integrity of Company Records
Each director, officer and employee must help maintain the
integrity of the Company's financial and compliance records. No
Standards of Conduct can review the extensive financial
accounting and compliance requirements the Company must fulfill.
However, the Company must rely on truthfulness in all its record-
keeping practices to meet these obligations. Every reasonable
effort should be made to maintain the books and records of the
Company accurately, in reasonable detail, and in accordance with
the Company's policies and procedures.
1. Directors, officers and employees may not
knowingly participate in any intentional misstatement of
Company accounts or records.
2. No records or information shall be manipulated for
the purposes of altering or distorting business results and
no deliberately false or inaccurate entries shall be made
for any purpose.
3. All funds, assets and accounts established or
maintained for any purpose, shall be recorded on the books
and records of the Company established for those purposes.
4. No payment or business arrangement shall be
approved or made with the intention or understanding that
any part of the payment or any aspect of the business
arrangement is for any purpose other than that described by
the documents supporting the payment or business
arrangement. No circumstances justify the maintenance of
"off the books" accounts to facilitate questionable or
illegal payments.
15. Internal Control
Company supervisors are responsible for maintaining an effective
system of administrative/ accounting controls in their areas of
responsibility.
1. Reasonable procedures for carrying out Company
policies and preventing and identifying deviations shall be
established.
2. Business transactions of all kinds shall be
executed only by those authorized to do so.
3. Access to assets of all kinds (e.g. cash,
inventory, property, etc.) is permitted only with the
authorization of appropriate management personnel.
4. Business transactions shall be reported as
necessary to: (a) permit preparation of accurate financial
and other records and (b) clearly reflect the responsibility
for assets.
5. Records identifying the responsibility for assets
shall be compared with actual assets at reasonable
intervals. Appropriate action must be taken if there are
discrepancies.
16. Conflicts of Interest
Avoid any situation in which your personal interests
conflict with those of the Company. Each director, officer and
employee owes a duty of loyalty to the Company. For that reason,
all directors, officers and employees must exercise great care
any time their personal interests may conflict with those of the
Company. Directors, officers and employees should avoid
situations that would involve them in a conflict of interest or
create the appearance of a conflict. Usually there should be no
real or apparent conflict between the full discharge of a
director's, officer's or employee's responsibilities to the
Company and the director's, officer's or employee's personal
financial interests or obligations to any other person,
organization or activity. However, in some circumstances an
individual may find that a conflict of interest is inevitable.
Under such circumstances, the nature of the conflict should be
fully disclosed and discussed with the Company's Board of
Directors or President, and in their discretion, with inside or
outside legal counsel, to determine how best it should be
addressed.
Where the conflict of interest policy prohibits a director,
officer or employee from engaging in a specified activity or
transaction, the same prohibition extends to the director's,
officer's or employee's "Immediate Family." For purposes of
these Standards of Conduct, "Immediate Family" is defined to
include only a director's, officer's or employee's spouse,
parents, grandparents, children, grandchildren, brothers and
sisters and their lineal descendants, first cousins (in each of
the foregoing cases, whether by blood or adoption), any spouses
of the foregoing, and any other person who lives in the same
household.
The following is a more specific, but not exhaustive, list
of conflicts of interest to avoid:
Financial Interests and Relationships. A director, officer
or employee shall not knowingly have an investment or financial
interest in, or have any financial relationship, management or
advisory position with, a supplier, customer, current or
potential competitor of the Company, except:
- - An insubstantial interest or ownership (generally
defined as not more than one percent of the outstanding
shares) in publicly traded securities of a supplier,
customer or competitor. However, depending on the
circumstances, a conflict of interest might still
exist, even if the stock held is less than one percent,
where the director, officer or employee is in a
position to control or influence the Company's
decisions or actions with respect to a transaction with
such corporation. In addition, if the investment or
interest by the director, officer or employee or
Immediate Family member is in a small organization
doing business with the Company, a conflict of interest
is likely in view of the possible relative importance
of the transaction to such organization.
- - A transaction considered customary and conducted on
standard commercially available terms, such as a home
mortgage or bank loan.
- - A transaction or relationship disclosed in writing to
the Company's Corporate Compliance Officer and
determined in writing by him not to be inconsistent
with the purpose of this policy.
Gifts and Entertainment. To avoid both the reality and the
appearance of improper business relations with suppliers or
customers, this policy applies to both the giving and receiving
of gifts and entertainment. Directors, officers and employees
shall not accept from or give to any supplier, customer or
competitor, gifts, hospitality or entertainment that could be
considered lavish or excessive by reasonable standards. This
policy, however, permits gifts of reasonable value, reasonable
business meals and entertainment, the exchange of which
constitutes customary reciprocal courtesies between the Company's
directors, officers or employees and their business associates,
and similar customary and reasonable expenditures to promote
general business goodwill not otherwise inconsistent with these
Standards of Conduct.
Related Party Transactions. Except as specifically approved
by both a majority of the Company's Board of Directors and a
majority of the Company's disinterested directors who are not
employees of the Company, no sale or purchase of property,
supplies or services shall be made by the Company to or from any
director or officer of the Company, members of a director's or
officer's Immediate Family or entities in which any of such
persons is a director, officer or owner of 5% or more of such
entity's equity interests (each such transaction is a "Related
Party Transaction").
Corporate Opportunities. Part of your duty of loyalty to
the Company requires that you offer to the Company any business
opportunity of which you become aware that is related to the
Company's business, or which otherwise ought to belong to the
Company. Therefore, if a director, officer or employee of the
Company becomes aware of a business opportunity related to the
Company's business, (each such business opportunity is referred
to as a "Corporate Opportunity"), the director, officer or
employee has an obligation to offer that Corporate Opportunity to
the Company first before taking the Corporate Opportunity for
himself or herself. Only if the Company elects not to pursue the
Corporate Opportunity may you pursue the Corporate Opportunity
for yourself. If you become aware of a Corporate Opportunity,
you must report it to the President. The President will inform
you as promptly as practicable regarding the Company's interest
in pursuing the Corporate Opportunity.
Nepotism. See the Company's Nepotism Policy (Policy #9).
Misuse of Company Resources. Directors, officers and
employees shall not utilize the services of Company personnel or
utilize Company assets for their own personal benefit or the
benefit of any member of their Immediate Family, except as
specifically authorized in the Company's written benefit
policies.
17. Confidential Information
One of the Company's most important assets is its
confidential corporate information and the confidential
information licensed or otherwise entrusted to it by others. The
Company's legal obligations and its competitive position often
mandate that this information remain confidential.
Confidential corporate information generally falls into two
categories. The first category encompasses information intended
for internal use only. This information typically relates to the
Company's operations, customer lists, pricing policies and trade
secrets (confidential information used in the course of business
to give the Company a competitive advantage). It also relates to
technology owned by third parties and licensed, marketed or
otherwise used by the Company in providing technology evaluation
and management services to corporations, government agencies and
universities. This information is entrusted to the Company and
its directors, officers and employees on a confidential basis,
and includes technology licenses, patent applications and
prosecutions and the Company's assessments of the marketability
of new technology. The Company endeavors to keep this
information confidential indefinitely.
The second category, by contrast, involves confidential
corporate information that the Company routinely discloses to the
investing public. This information often gauges the Company's
financial performance (e.g. quarterly financial results of the
Company's operations) or identifies events that have a
significant (or material) impact on the value of the Company's
securities. As outlined below, premature disclosure of such
information may expose the individual involved to onerous civil
and criminal penalties.
Confidential corporate information of either category must
not be disclosed by directors, officers or employees to anyone
outside the Company, except for a legitimate Company business
purpose (such as contacts with the Company's accountants or its
outside lawyers). Even within the Company, confidential
corporate information should be discussed only with those who
have a need to know the information. A director's, officer's or
employee's obligation to safeguard confidential corporate
information continues even after he or she leaves the Company.
18. Policy on Antitrust
All applicable antitrust laws shall be observed. For
example, directors, officers or employees must refrain from
discussions, agreements or understandings with any party with
respect to any matter which could be construed as price fixing or
stabilization, bid-rigging, limits on service or allocation of
services, customers or territories.
19. Outside Business Activities
The Company requires the full attention of its officers and
employees. In general, this level of attention makes it
impractical for officers and employees to pursue employment
outside the Company. Therefore, the following specific
limitations are applied to officers and employees with respect to
outside business and management activities.
1. Officers and employees are expected to devote
their entire working time to the performance of their duties
for the Company. They should avoid outside business or
consulting activities that could divert their time, interest
or talents from Company business. Prior approval in writing
by the President is required before entering into any such
outside business or consulting activity. Such approval
shall not be granted without written concurrence from the
Company vice president most directly responsible for the
affected employee. Approval for officers shall not be
granted without written concurrence from the Chairman of the
Audit Committee of the Board of Directors.
2. Outside offices and directorships. The director
of a corporation has access to sensitive information and
charts the course of the corporation. When a Company
officer or employee is invited to play that role for an
outside organization, the Company must take steps to shield
both the organization and the officer or employee from even
the appearance of impropriety. For that reason, except with
respect to an officer or employee serving at the Company's
request as a director or officer of a company in which the
Company has an investment interest, officers and employees
may not serve as officers or directors of any other
commercial enterprise unless it is pursuant to an exception
approved in writing. The term "commercial enterprise"
includes business corporations or entities, banks, trust
companies, other financial institutions and similar
organizations. Such approval shall be by the Company's
President or the Board of Directors.
20. Insider Trading
The Company has a long-standing commitment to comply with
the federal and state securities laws and regulations. In the
course of business operations, you may become aware of nonpublic
material information relating to important business matters.
Securities laws prohibit persons from trading securities on the
basis of nonpublic material information. If you are aware of
material information relating to the Company or relating to firms
with which the Company is negotiating or competing, you may not
buy or sell shares or other securities of the Company or such
firms nor disclose such information to people outside the Company
until such information has been disclosed to the public and has
an adequate opportunity to be absorbed by the market.
Material information is any information that an investor
might consider important in deciding whether to buy, sell, or
hold securities. Here are some examples:
- financial results and forecasts
- new product developments
- obtaining or losing important contracts
- changes in the rates or estimated rates of sales,
earnings or dividends
- changes in auditors
- stock splits or reverse splits
- possible mergers, acquisitions, joint ventures, tender
offers or major purchases or sales of securities or
assets
- major management changes or change in control of the
Company
- major changes in business direction
- sales or purchases by the Company of its own securities
- major litigation developments
Information is considered to be nonpublic unless is has been
disclosed to the public. Examples of effective disclosure
include public filings with securities regulatory authorities and
issuance of Company press releases. The information must not
only be publicly disclosed; there also must be adequate time for
the market as a whole to digest the information.
The Company has adopted the following Policy Prohibiting Insider
Trading:
All directors, officers and employees must treat as
confidential any inside information they learn in the course of
their employment. Don't leave such information on top of your
desk where anyone can see it. Keep inside information in secure
files and share it only with other directors, officers or
employees who have a need to know the information. Do not
discuss inside information with friends or family. Do not
discuss inside information in elevators, restaurants or other
public places.
Inside information is any information or development which
may have a material effect on the Company or on the market price
of its stock (or on an investor's decision to buy or sell the
stock) and which has not been publicly disclosed.
Material information (see the examples described above) that
is nonpublic should be treated as inside information. Inside
information can be favorable or unfavorable. Getting a major new
contract or customer and losing a major contract or customer can
both be inside information.
Directors, officers and employees must not trade in
securities of the Company based on inside information. Equally
important, they must not give "tips" on inside information to
their relatives - or to anyone else - which would enable the
receiver of the tip to profit from such information through
securities trading.
If you obtain inside information about another company, such
as a supplier or a customer, or you learn that we are planning a
major transaction with another company (such as a take-over), you
must not trade in securities of the other company.
The policy against insider trading and misuse of inside
information applies to all directors, officers and employees of
the Company and its subsidiaries. This includes secretaries,
mailroom staff, personnel who handle Xerox - and FAX - type
machines and messengers as well as executives and management. The
policy also applies to consultants and independent contractors.
Periods when the trading door is closed. It is
particularly dangerous to trade immediately before the Company
announces quarterly sales and earnings results. Even if there
have been no significant changes in such results from prior
periods, there may be street expectations that can cause stock
prices to fluctuate depending on whether expectations have been
exceeded or not. Therefore it is Company policy that directors,
officers or employees of the Company may not trade in the
Company's stock during the period from the end of any fiscal
quarter (October 31, January 31, April 30 and July 31) until at
least one business day has elapsed following the release for
publication of quarterly or annual statements of sales and
earnings. Even after such publication, however, you should not
trade if you are aware of material information that has not yet
been disclosed. However, the trading door will be open if the
purchase or sale is made pursuant to a contract, instruction, or
plan in full compliance with SEC Rule 10b 5-1. Any director,
officer or employee of the Company who establishes an arrangement
under Rule 10b 5-1 should promptly deliver a written copy of the
arrangement to the Corporate Compliance Officer. The Company
will be free, in its discretion, to make such arrangements
public.
The Company is aware that the Securities and Exchange
Commission has enacted Rule 10b(5) 1 which provides a safe harbor
for trading in Company stock at any time so long as a written
plan is put in place before entering into a blackout period that
provides for a plan that: (i) a specific document specifying that
particular trades will occur at specified prices, on specified
dates, for specified numbers of shares; (ii) a document
specifying a formula pursuant to which trades will occur; or
(iii) a document granting an outsider complete discretion to make
the trades, without access to any material nonpublic information
about the Company.
While plans such as this fall within the spirit of the
regulations, the Company has determined that it will not permit
any employee, director or consultant to purchase or sell any
shares during periods when the trading window is closed. Such
plans, in the opinion of the Company, would not be viewed
positively by shareholders.
These are very serious matters. Insider trading is illegal
and can result in jail sentences as well as civil penalties,
including treble damages. Sanctions by the Company may include
termination of employment. Please contact the Compliance Officer
if at any time you have questions about this policy.
If you have a question regarding the trading of securities
or whether certain information is material or if it has been
adequately disclosed to the public you should contact the
Corporate Compliance Officer, and abstain from trading in the
Company's securities or disclosing such information to people
outside the Company until you have been informed that such
trading is permissible or that the information is not material or
has been publicly disclosed and digested.
21. Information About the Company's Business
It is the Company's policy that its communications with the
public be accurate. Only the President and persons specifically
designated by him are authorized to issue press releases, speak
with shareholders and securities analysts or otherwise similarly
communicate with the public on behalf of the Company.
Frequent dissemination of information about the Company is
made through press releases, reports to shareholders, reports
filed with government agencies and other Company communications.
Unauthorized dissemination of certain information may cause
injury to individuals or to the business interests of the
Company. Further, directors, officers and employees expressing
personal opinions on subjects related to Company business should
avoid giving the impression that they are speaking on behalf of
the Company. Many employees have written agreements with the
Company concerning the confidentiality of certain proprietary
information. However, every Company director, officer and
employee has the obligation to insure that information they have
concerning the Company's business, finances and personnel is
handled professionally, with discretion, and disseminated only
through the appropriate authorized channels.
All advertising and promotional activities shall be
conducted in a manner consistent with scrupulous business ethics
and applicable government requirements.
22. Computer and Electronic Communications
The Company provides computer and telecommunications
equipment and software for use in conducting the business of the
Company. The Company reserves the right to limit or prohibit any
and all use of Company equipment for any purpose not related to
Company business. Anyone violating this policy may be subject to
disciplinary action, up to and including termination. Staff
members with supervisory responsibilities must ensure that
individuals under their supervision are aware of their
responsibilities under this policy.
Users of Company computers, e-mail, voice mail,
network/Internet access and files should not expect privacy for
anything stored on or sent through a Competitive Technologies
computer or network or Internet connection or stored on Company
equipment; all such material is subject to monitoring and review
by the Company.
All communications using Company equipment or supplies,
including telephones, e-mail and voice mail, should be carried
out in a professional manner. Confidential Company business
should never be discussed over a cellular or cordless telephone.
With regular software updates, potential program viruses,
client confidentiality, copyright laws, and the high cost of
computer and telecommunications equipment, it is necessary for us
to protect Company assets and information and maintain a high
level of professional integrity.
There are high risks associated with improper use of
computer equipment and software. Therefore, it is imperative that
only the Company's staff members be allowed to operate our
equipment. Authorization for anyone else to use our equipment
must be arranged with the President or General Counsel in advance
or must be under the continual supervision of a Company staff
member.
The following is the Company's Computer and Electronic
Communications Policy and it applies to all employees,' officers'
and directors' use of Company computers and telecommunications
equipment:
A. Passwords
Each employee is responsible for choosing a secure password
or access code for network, e-mail and voice mail access. Donna
Mays will assist you in selecting a secure password. You may not
write down your password or access code and leave it in your work
area. Each employee must provide his or her current network and
screen saver passwords to Donna Mays on a regular basis. Donna
Mays will keep them in a secure place for authorized Company use
only.
Employees may not read or access another employee's e-mail,
voice mail or files without the prior approval of an authorized
Company officer.
B. Computer Equipment (Computers, Printers, Monitors, etc.)
All of our computer equipment is assigned to individual
employees or to a permanent location within the office. Each
employee is responsible for his or her assigned equipment and is
expected to exercise reasonable care in operating and
transporting it.
Equipment may only be used for Company business. Employees
may not borrow Company equipment without the prior approval of a
Company officer.
C. Software
Only software authorized and properly licensed by the
Company may be stored on a hard disk or used on a Company
computer. With the increasing risk posed by computer viruses, it
is mandatory that unauthorized software not be run on a Company
computer or loaded onto a hard disk. Each Company computer may
be examined periodically or at any time. This examination may
include viewing of the contents of the hard disk. Unauthorized
software found on a Company computer will be removed and may
result in serious consequences to the individual involved,
including possible termination of employment.
Software Guidelines are as follows:
It is strictly forbidden to copy software unlawfully or use
unauthorized copies of computer software knowingly for any reason
whatsoever. If you have any question as to whether a copy or use
is permissible, check with Paul Levitsky or Jeanne Wendschuh
before any questioned use.
A standard package of software is loaded onto each Company
computer. This package should not be altered without approval
from Paul Levitsky or Jeanne Wendschuh, as an altered package
will prevent automated updates from working properly and may
damage other programs on the computer. If it is noted that a
Company computer has a changed or altered standard package, you
will be notified that the computer will be re-imaged to remediate
any issues.
Computer equipment is for business purposes only; games may
not be loaded onto the hard drive or run on the floppy drive. In
addition, many computer viruses are sometimes transmitted through
shareware and games.
Any files received from others outside the Company, whether
attached to e-mail or on a transportable disk, must be checked
for viruses. E-mail attachments often contain viruses,
especially executable programs such as games. Correcting the
damage caused by a virus is a time consuming and costly process
and is one of our greatest challenges in relation to our
technology.
Any client information or work product stored on Company
computers or premises is the property of the Company and is
strictly confidential. At no time may this information be
disclosed or used for any purposes other than those of the
Company or the applicable client.
Software and applications developed by employees, as well as
reports and documents prepared by them within the context of
their work or using its software and equipment, are the property
of the Company. When employees leave the Company, they must
return all software, hard copies, forms and other documents.
Anti-virus software is part of the standard package on all
Company computers. You are responsible for updating virus
definitions and scanning all files on the Company computer you
use regularly. Please pay attention to all Company notices from
Donna Mays regarding viruses.
D. Internet and E-mail and Telecommunications
All e-mail sent to or received from your Company e-mail
address and all Web sites visited using Company equipment and all
telephone calls are subject to monitoring and logging and may be
actively monitored or logged by an authorized person.
Any e-mail or communication sent to a public forum should be
treated with the same care and consideration as a letter sent out
on Company letterhead that may be discoverable by an opponent in
litigation. Any such communication should be consistent with the
Company's business practices, must not disclose any trade secrets
or intellectual property, may not violate another's rights (e.g.
defame or harass), and should be treated as if it is a
communication with the media.
The Company and its business may not be discussed in public
Internet forums of any kind by employees, officers or directors
during business hours or on their own time unless participation
in such discussions is approved by the President in advance.
Employees may not use Company equipment or time to access
web sites containing "inappropriate" content (such as adult or
pornographic web sites, gambling sites, or web sites with pirated
software).
The Company's computer and telecommunications equipment may
not be used to transmit viruses and similar harmful code, conduct
denial of service attacks, violate any other system's acceptable
use policy, or violate the law.
Participation in chain letter type mailings is not
acceptable as it creates unnecessary strain on the system and in
some cases may be against the law.
Conclusion
It is necessary for everyone to conform to this policy in
order to protect the Company's reputation and to avoid serious
financial consequences or legal liability.
23. Penalties for Violations
If a director, officer or employee violates any law or
regulation in the course of his or her employment or service on
the Board of Directors, as the case may be, the director, officer
or employee will be subject to sanctions from the Company. These
sanctions may include, but are not limited to, termination,
suspension, demotion, reduction in pay and reprimand.
The Board of Directors or the President may determine that
failure to adhere to the Company's Standards of Conduct
constitutes willful misconduct or reckless disregard of duty and
this may result in termination for cause or other disciplinary
action. The following are examples of actions or omissions that
will subject a director, officer or employee to discipline: a
breach of these Standards of Conduct; failure to report a
suspected or actual violation of law or a breach of these
Standards of Conduct; falsification of any certificate required
under these Standards of Conduct or any related compliance
program; lack of attention or diligence on the part of
supervisory personnel that directly or indirectly leads to a
violation of law; or direct or indirect retaliation against a
director, officer or employee who reports a violation.
These Standards of Conduct govern the relationship between
the Company and its directors, officers and employees; they are
not intended to confer on any party other than the Company any
additional rights or remedies.
24. Implementation
1. Upon hire as an officer or employee or election as a
director and on an annual basis thereafter (on or about a date
set by the Board), all managers and supervisors shall insure that
a copy of these Standards of Conduct is furnished to every
officer, director or employee under their supervision. In
addition, in relation to providing a copy of these Standards of
Conduct upon hire or election and annually thereafter, all
managers and supervisors will insure that every officer, director
or employee under their supervision returns to the Corporate
Compliance Officer a signed and dated Acknowledgment of Receipt.
2. Within 10 business days after reviewing these Standards
of Conduct, each director, officer and employee of the Company
must report to the Corporate Compliance Officer using the
attached Noncompliance Report Form any noncompliance or suspected
noncompliance with these Standards of Conduct, whether on his or
her own part or on the part of another director, officer or
employee. Failure to do so is itself a violation of these
Standards of Conduct.
25. Procedures for Requesting and Granting Exceptions
to the Standards of Conduct
Certain situations may warrant an exception to the Standards
of Conduct. Examples of special situations include (but are not
limited to) cases of particular hardship, or other circumstances
where the nature or location of the organization or activity may
properly require or permit different treatment. Requests for
exemptions must be submitted in writing using the attached
"Exemption Request Form". Be certain to describe in detail all
pertinent information regarding the proposed transaction so that
an informed decision may be made regarding the exemption request.
In emergency situations, a request may be made orally and
subsequently confirmed in writing.
In the case of a member of the Board of Directors or an
officer, only the President of the Company may authorize an
exception or special handling.
The necessary approvals for an exemption are required to be
obtained in advance of an action requiring an exemption.
26. Private Communications with the Audit Committee
of the Board of Directors
As a part of its charter, the Audit Committee of the Board
of Directors has determined that it will meet privately at least
annually with the Company's internal accountants.
In addition, any employee may communicate privately with the
Audit Committee or its Chairperson on any matter the employee
believes should be discussed privately. At October 15, 2003,
the members of the Audit Committee are John M. Sabin, Chairman,
George W. Dunbar, Jr., Charles J. Philippin and Richard E. Carver
(ex-officio member).
You may communicate privately with them by telephone or by
private letter. You may get current telephone numbers or mailing
addresses from Lorraine Frauenhofer.
Competitive Technologies, Inc.
Corporate Standards of Conduct
Noncompliance Report Form
To:
From:
Date:
Re:
After reviewing the Standards of Conduct, I have noted the
noncompliance described below: (The description should include
the nature of the noncompliance, the names of the parties
involved, and whether an exemption to the Standards of Conduct is
also being requested (if an exemption is being requested, also
attach the Exemption Request Form). Please use additional
sheets, if necessary.
__________________________________ _________________________
Signature Date
Competitive Technologies, Inc.
Corporate Standards of Conduct
Exemption Request Form
To:
From:
Date:
Re:
I am requesting an exemption from the Standards of Conduct in
connection with the matter described below: (The description
should include the purpose and proposed date of the action, the
names of the parties involved, and the consequences of not
receiving approval for the exception.) Please use additional
sheets, if necessary.
_________________________________ _________________________
Signature Date
Competitive Technologies, Inc.
Corporate Standards of Conduct
Acknowledgment of Receipt
To: Corporate Compliance Officer
Re: Corporate Standards of Conduct
The undersigned hereby certifies that he or she has received
a copy of, has read, understands and agrees to comply with the
Company's Standards of Conduct.
Date:_____________ _________________________________
Signature
Name:___________________________
(please print)