COMMUNICATION INTELLIGENCE CORPORATION
CODE OF BUSINESS CONDUCT AND ETHICS
Introduction.
We are committed to maintaining the highest standards of honest and ethical
business conduct , including ensuring full, fair, accurate, timely and
understandable disclosures in our public documents and reports, compliance with
applicable laws, prompt internal reporting of violations of these standards and
accountability for adherence to these standards. This Code of Business Conduct
and Ethics (the "Code") reflects the business practices and principles of
behavior that support this commitment. We expect every employee, officer and
director to read, understand and comply with the Code and its application to the
performance of his or her business responsibilities. References in the Code to
employees are intended to cover officers and, as applicable, directors, managers
and supervisors as well as employees.
Officers, managers and other supervisors are expected to develop in
employees a sense of commitment to the spirit, as well as the letter, of the
Code. Supervisors are also expected to ensure that all agents and contractors
conform to Code standards when working for or on behalf of Communication
Intelligence Corporation. Nothing in the Code alters the employment at-will
policy of Communication Intelligence Corporation.
The Code cannot possibly describe every practice or principle related to
honest and ethical conduct. The Code addresses conduct that is particularly
important to proper dealings with the people and entities with whom we interact,
but reflects only a part of our commitment. The following additional policies of
Communication Intelligence Corporation supplement or amplify the Code in certain
areas and should be read in conjunction with the Code:
Action by members of your immediate family, significant others or other
persons who live in your household also may potentially result in ethical issues
to the extent that they involve Communication Intelligence Corporation business.
For example, acceptance of inappropriate gifts by a family member from one of
our suppliers could create a conflict of interest and result in a Code violation
attributable to you. Consequently, in complying with the Code, you should
consider not only your own conduct, but also that of your immediate family
members, significant others and other persons who live in your household.
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The integrity and reputation of Communication Intelligence Corporation
depends on the honesty, fairness and integrity brought to the job by each person
associated with us. It is the responsibility of each employee to apply common
sense, together with his or her own highest personal ethical standards, in
making business decisions where there is no stated guideline in the Code.
Unyielding personal integrity is the foundation of corporate integrity.
YOU SHOULD NOT HESITATE TO ASK QUESTIONS ABOUT WHETHER ANY CONDUCT MAY
VIOLATE THE CODE, VOICE CONCERNS OR CLARIFY GRAY AREAS. SECTION 16 BELOW DETAILS
THE COMPLIANCE RESOURCES AVAILABLE TO YOU. IN ADDITION, YOU SHOULD BE ALERT TO
POSSIBLE VIOLATIONS OF THE CODE BY OTHERS AND REPORT SUSPECTED VIOLATIONS,
WITHOUT FEAR OF ANY FORM OF RETALIATION, AS FURTHER DESCRIBED IN SECTION 16.
Violations of the Code will not be tolerated. Any employee who violates the
standards in the Code may be subject to disciplinary action, up to and including
termination of employment and, in appropriate cases, civil legal action or
referral for criminal prosecution.
1. Legal Compliance.
Obeying the law, both in letter and in spirit, is the foundation of this
Code. Our success depends upon each employee's operating within legal guidelines
and cooperating with local, national and international authorities. It is
therefore essential that you understand the legal and regulatory requirements
applicable to your business unit and area of responsibility. We will send
employees to periodic training sessions to ensure that all employees comply with
the relevant laws, rules and regulations associated with their employment,
including laws prohibiting insider trading (which are discussed in further
detail in Section 4 below). While we do not expect you to memorize every detail
of these laws, rules and regulations, we want you to be able to determine when
to seek advice from others. If you do have a question in the area of legal
compliance, it is important that you not hesitate to seek answers from your
supervisor or the Corporate Responsibility Officer (see Section 16).
Disregard of the law will not be tolerated. Violation of domestic or
foreign laws, rules and regulations may subject an individual as well as
Communication Intelligence Corporation to civil and/or criminal penalties. You
should be aware that conduct and records, including emails, are subject to
internal and external audits and to discovery by third parties in the event of a
government investigation or civil litigation. It is in everyone's best interests
to know and comply with our legal and ethical obligations.
2. Misuse of Company Computer Equipment
You may not, while acting on behalf of Communication Intelligence
Corporation. or while using our computing or communications equipment or
facilities, either:
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o access the internal computer system (also known as "hacking") or other
resource of another entity without express written authorization from the
entity responsible for operating that resource; or
o commit any unlawful or illegal act, including harassment, libel, fraud,
sending of unsolicited bulk email (also known as "spam") in violation of
applicable law, trafficking in contraband of any kind, or espionage.
If you receive authorization to access another entity's internal computer
system or other resource, you must make a permanent record of that authorization
so that it may be retrieved for future reference and you may not exceed the
scope of that authorization.
Unsolicited bulk email is regulated by law in a number of jurisdictions. If
you intend to send unsolicited bulk email to persons outside of Communication
Intelligence Corporation, either while acting on our behalf or using our
computing or communications equipment or facilities, you should contact your
supervisor or the Corporate Responsibility Officer for approval.
All data residing on or transmitted through our computing and
communications facilities, including email and word processing documents, is the
property of Communication Intelligence Corporation and subject to inspection,
retention and review by Communication Intelligence Corporation in accordance
with applicable law.
3. Environment Compliance
Federal law imposes criminal liability on any person or company that
contaminates the environment with any hazardous substance that could cause
injury to the community or environment. Violation of environmental laws can be a
criminal offense and can involve monetary fines and imprisonment. We expect
employees to comply with all applicable environmental laws.
It is our policy to conduct our business in an environmentally responsible
way that minimizes environmental impacts. We are committed to minimizing and, if
possible, eliminating the use of any substance or material that may cause
environmental damage, reducing waste generation and disposing of all waste
through safe and responsible methods, minimizing environmental risks by
employing safe technologies and operating procedures, and being prepared to
respond appropriately to accidents and emergencies.
4. Insider Trading.
Employees who have access to confidential (or "inside") information are not
permitted to use or share that information for stock trading purposes or for any
other purpose except to conduct our business. All non-public information about
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Communication Intelligence Corporation or about companies with which we do
business is considered confidential information. To use material non-public
information in connection with buying or selling securities, including "tipping"
others who might make an investment decision on the basis of this information,
is not only unethical, it is illegal. Employees must exercise the utmost care
when handling material inside information. We have adopted a separate Insider
Trading and Tipping Policy to which you are bound as a condition of your
employment here. You should consult the Insider Trading and Tipping Policy for
more specific information on the definition of "material inside information" and
on buying and selling our securities or securities of companies with which we do
business.
5. International Business Laws.
Our employees are expected to comply with the applicable laws in all
countries to which they travel, in which they operate and where we otherwise do
business, including laws prohibiting bribery, corruption or the conduct of
business with specified individuals, companies or countries. The fact that in
some countries certain laws are not enforced or that violation of those laws is
not subject to public criticism will not be accepted as an excuse for
noncompliance. In addition, we expect employees to comply with U.S. laws, rules
and regulations governing the conduct of business by its citizens and
corporations outside the U.S.
These U.S. laws, rules and regulations, which extend to all our activities
outside the U.S., include:
o The Foreign Corrupt Practices Act, which prohibits directly or indirectly
giving anything of value to a government official to obtain or retain
business or favorable treatment, and requires the maintenance of accurate
books of account, with all company transactions being properly recorded;
o U.S. Embargoes, which restrict or, in some cases, prohibit companies, their
subsidiaries and their employees from doing business with certain other
countries identified on a list that changes periodically (including
currently, for example, Angola (partial), Burma (partial), Cuba, Iran,
Iraq, Libya, North Korea, Sudan and Syria) or specific companies or
individuals;
o Export Controls, which restrict travel to designated countries or prohibit
or restrict the export of goods, services and technology to designated
countries, denied persons or denied entities from the U.S., or the
re-export of U.S. origin goods from the country of original destination to
such designated countries, denied companies or denied entities; and
o Antiboycott Compliance, which prohibits U.S. companies from taking any
action that has the effect of furthering or supporting a restrictive trade
practice or boycott that is fostered or imposed by a foreign country
against a country friendly to the U.S. or against any U.S. person.
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If you have a question as to whether an activity is restricted or
prohibited, seek assistance before taking any action, including giving any
verbal assurances that might be regulated by international laws.
6. Conflicts of Interest.
A "conflict of interest" occurs when an individual's personal interest may
interfere in any way with the performance of his or her duties or the best
interests of Communication Intelligence Corporation. A conflicting personal
interest could result from an expectation of personal gain now or in the future
or from a need to satisfy a prior or concurrent personal obligation. We expect
our employees to be free from influences that conflict with the best interests
of Communication Intelligence Corporation. Even the appearance of a conflict of
interest where none actually exists can be damaging and should be avoided.
Whether or not a conflict of interest exists or will exist can be unclear.
Conflicts of interest are prohibited unless specifically authorized as described
below.
If you have any questions about a potential conflict or if you become aware
of an actual or potential conflict, and you are not an officer or director of
Communication Intelligence Corporation., you should discuss the matter with your
supervisor or the Corporate Responsibility Officer (as further described in
Section 16). Supervisors may not authorize conflict of interest matters without
first seeking the approval of the Corporate Responsibility Officer and filing
with the Corporate Responsibility Officer a written description of the
authorized activity. If the supervisor is involved in the potential or actual
conflict, you should discuss the matter directly with the Corporate
Responsibility Officer. Officers and directors may seek authorization from the
Audit Committee. Factors that may be considered in evaluating a potential
conflict of interest are, among others:
o whether it may interfere with the employee's job performance,
responsibilities or morale;
o whether the employee has access to confidential information;
o whether it may interfere with the job performance, responsibilities or
morale of others within the organization;
o any potential adverse or beneficial impact on our business;
o any potential adverse or beneficial impact on our relationships with our
customers or suppliers or other service providers;
o whether it would enhance or support a competitor's position;
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o the extent to which it would result in financial or other benefit (direct
or indirect) to the employee;
o the extent to which it would result in financial or other benefit (direct
or indirect) to one of our customers, suppliers or other service providers;
and
o the extent to which it would appear improper to an outside observer.
The following are examples of situations that may, depending on the facts
and circumstances, involve conflicts of interests:
o Employment by (including consulting for) or service on the board of a
competitor, customer or supplier or other service provider. Activity that
enhances or supports the position of a competitor to the detriment of
Communication Intelligence Corporation is prohibited, including employment
by or service on the board of a competitor. Employment by or service on the
board of a customer or supplier or other service provider is generally
discouraged and you must seek authorization in advance if you plan to take
such action.
o Owning, directly or indirectly, a significant financial interest in any
entity that does business, seeks to do business or competes with us. In
addition to the factors described above, persons evaluating ownership for
conflicts of interest will consider the size and nature of the investment;
the nature of the relationship between the other entity and Communication
Intelligence Corporation; the employee's access to confidential information
and the employee's ability to influence Communication Intelligence
Corporation decisions. If you would like to acquire a financial interest of
that kind, you must seek approval in advance.
o Soliciting or accepting gifts, favors, loans or preferential treatment from
any person or entity that does business or seeks to do business with us.
See Section 10 for further discussion of the issues involved in this type
of conflict.
o Soliciting contributions to any charity or for any political candidate from
any person or entity that does business or seeks to do business with us.
o Taking personal advantage of corporate opportunities. See Section 7 for
further discussion of the issues involved in this type of conflict.
o Moonlighting without permission.
o Conducting our business transactions with your family member, significant
other or person who shares your household or a business in which you have a
significant financial interest. Material related-party transactions
approved by the Audit Committee and involving any executive officer or
director will be publicly disclosed as required by applicable laws and
regulations.
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o Exercising supervisory or other authority on behalf of Communication
Intelligence Corporation over a co-worker who is also a family member. The
employee's supervisor and/or the Corporate Responsibility Officer will
consult with the Human Resources department to assess the advisability of
reassignment.
Loans to, or guarantees of obligations of, employees or their family
members by Communication Intelligence Corporation could constitute an improper
personal benefit to the recipients of these loans or guarantees, depending on
the facts and circumstances. Some loans are expressly prohibited by law and
applicable law requires that our Board of Directors approve all loans and
guarantees to employees. As a result, all loans and guarantees by or to
Communication Intelligence Corporation must be approved in advance by the Audit
Committee.
7. Corporate Opportunities.
You may not take personal advantage of opportunities that are presented to
you or discovered by you as a result of your position with us or through your
use of corporate property or information, unless authorized by your supervisor,
the Corporate Responsibility Officer or the Audit Committee, as described in
Section 6. Even opportunities that are acquired privately by you may be
questionable if they are related to our existing or proposed lines of business.
Participation in an investment or outside business opportunity that is related
to our existing or proposed lines of business must be pre-approved. You cannot
use your position with us or corporate property or information for improper
personal gain, nor can you compete with us in any way.
8. Maintenance of Corporate Books, Records, Documents and Accounts; Financial
Integrity; Public Reporting.
The integrity of our records and public disclosure depends on the validity,
accuracy and completeness of the information supporting the entries to our books
of account. Therefore, our corporate and business records should be completed
accurately and honestly. The making of false or misleading entries, whether they
relate to financial results or test results, is strictly prohibited. Our records
serve as a basis for managing our business and are important in meeting our
obligations to customers, suppliers, creditors, employees and others with whom
we do business. As a result, it is important that our books, records and
accounts accurately and fairly reflect, in reasonable detail, our assets,
liabilities, revenues, costs and expenses, as well as all transactions and
changes in assets and liabilities. We require that:
o no entry be made in our books and records that intentionally hides or
disguises the nature of any transaction or of any of our liabilities, or
misclassifies any transactions as to accounts or accounting periods;
o transactions be supported by appropriate documentation;
o the terms of sales and other commercial transactions be reflected
accurately in the documentation for those transactions and all such
documentation be reflected accurately in our books and records;
o employees comply with our system of internal controls; and
o no cash or other assets be maintained for any purpose in any unrecorded or
"off-the-books" fund.
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Our accounting records are also relied upon to produce reports for our
management, stockholders and creditors, as well as for governmental agencies. In
particular, we rely upon our accounting and other business and corporate records
in preparing the periodic and current reports that we file with the SEC. These
reports must provide full, fair, accurate, timely and understandable disclosure
and fairly present our financial condition and results of operations. Employees
who collect, provide or analyze information for or otherwise contribute in any
way in preparing or verifying these reports should strive to ensure that our
financial disclosure is accurate and transparent and that our reports contain
all of the information about Communication Intelligence Corporation that would
be important to enable stockholders and potential investors to assess the
soundness and risks of our business and finances and the quality and integrity
of our accounting and disclosures. In addition:
o no employee may take or authorize any action that would cause our financial
records or financial disclosure to fail to comply with generally accepted
accounting principles, the rules and regulations of the SEC or other
applicable laws, rules and regulations;
o all employees must cooperate fully with our Accounting, as well as our
independent public accountants and counsel, respond to their questions with
candor and provide them with complete and accurate information to help
ensure that our books and records, as well as our reports filed with the
SEC, are accurate and complete; and
o no employee should knowingly make (or cause or encourage any other person
to make) any false or misleading statement in any of our reports filed with
the SEC or knowingly omit (or cause or encourage any other person to omit)
any information necessary to make the disclosure in any of our reports
accurate in all material respects.
Any employee who becomes aware of any departure from these standards has a
responsibility to report his or her knowledge promptly to a supervisor, the
Corporate Responsibility Officer or one of the other compliance resources
described in Section 16.
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9. Fair Dealing.
We strive to outperform our competition fairly and honestly. Advantages
over our competitors are to be obtained through superior performance of our
products and services, not through unethical or illegal business practices.
Acquiring proprietary information from others through improper means, possessing
trade secret information that was improperly obtained, or inducing improper
disclosure of confidential information from past or present employees of other
companies is prohibited, even if motivated by an intention to advance our
interests. If information is obtained by mistake that may constitute a trade
secret or other confidential information of another business, or if you have any
questions about the legality of proposed information gathering, you must consult
your supervisor or the Corporate Responsibility Officer, as further described in
Section 16.
You are expected to deal fairly with our customers, suppliers, employees
and anyone else with whom you have contact in the course of performing your job.
No employee may take unfair advantage of anyone through misuse of confidential
information, misrepresentation of material facts or any other unfair dealing
practice.
Employees involved in procurement have a special responsibility to adhere
to principles of fair competition in the purchase of products and services by
selecting suppliers based exclusively on normal commercial considerations, such
as quality, cost, availability, service and reputation, and not on the receipt
of special favors.
10. Gifts and Entertainment.
Business entertainment and gifts are meant to create goodwill and sound
working relationships and not to gain improper advantage with customers or
facilitate approvals from government officials. Unless express permission is
received from a supervisor, the Corporate Responsibility Officer or the Audit
Committee, entertainment and gifts cannot be offered, provided or accepted by
any employee unless consistent with customary business practices and not (a)
excessive in value, (b) in cash, (c) susceptible of being construed as a bribe
or kickback or (d) in violation of any laws. This principle applies to our
transactions everywhere in the world, even where the practice is widely
considered "a way of doing business." Under some statutes, such as the U.S.
Foreign Corrupt Practices Act (further described in Section 5), giving anything
of value to a government official to obtain or retain business or favorable
treatment is a criminal act subject to prosecution and conviction. Discuss with
your supervisor or the Corporate Responsibility Officer any proposed
entertainment or gifts if you are uncertain about their appropriateness.
11. Antitrust.
Antitrust laws are designed to protect the competitive process. These laws
generally prohibit:
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o agreements, formal or informal, with competitors that harm competition or
customers, including price fixing and allocations of customers, territories
or contracts;
o agreements, formal or informal, that establish or fix the price at which a
customer may resell a product; and
o the acquisition or maintenance of a monopoly or attempted monopoly through
anti-competitive conduct.
Certain kinds of information, such as pricing, production and inventory,
should not be exchanged with competitors, regardless of how innocent or casual
the exchange may be and regardless of the setting, whether business or social.
Understanding the requirements of antitrust and unfair competition laws of
the various jurisdictions where we do business can be difficult, and you are
urged to seek assistance from your supervisor or the Corporate Responsibility
Officer whenever you have a question relating to these laws.
12. Protection and Proper Use of Company Assets.
All employees are expected to protect our assets and ensure their efficient
use. Theft, carelessness and waste have a direct impact on our profitability.
Our property, such as laboratory equipment, office equipment, office supplies
and computer equipment, are expected to be used only for legitimate business
purposes, although incidental personal use may be permitted. Employees should be
mindful of the fact that we retain the right to access, review, monitor and
disclose any information transmitted, received or stored using our electronic
equipment, with or without an employee's or third party's knowledge, consent or
approval. Any misuse or suspected misuse of our assets must be immediately
reported to your supervisor or the Corporate Responsibility Officer.
13. Confidentiality.
One of our most important assets is our confidential information. Employees
who have received or have access to confidential information should take care to
keep this information confidential. Confidential information may include
business, marketing and service plans, financial information, product
architecture, source codes, engineering and manufacturing ideas, designs,
databases, customer lists, pricing strategies, personnel data, personally
identifiable information pertaining to our employees, customers or other
individuals (including, for example, names, addresses, telephone numbers and
social security numbers), and similar types of information provided to us by our
customers, suppliers and partners. This information may be protected by patent,
trademark, copyright and trade secret laws.
Except when disclosure is authorized or legally mandated, you must not
share our or our suppliers' or customers' confidential information with third
parties or others within Communication Intelligence Corporation who have no
legitimate business purpose for receiving that information. Doing so would
constitute a violation of the employment agreement that you signed upon joining
us. Unauthorized use or distribution of this information could also be illegal
and result in civil liability and/or criminal penalties.
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You should also take care not to inadvertently disclose confidential
information. Materials that contain confidential information, such as memos,
notebooks, computer disks and laptop computers should be stored securely.
Unauthorized posting or discussion of any information concerning our business,
information or prospects on the Internet is prohibited. You may not discuss our
business, information or prospects in any "chat room," regardless of whether you
use your own name or a pseudonym. Be cautious when discussing sensitive
information in public places like elevators, airports, restaurants and
"quasi-public" areas within Communication Intelligence Corporation, such as
cafeterias. All Communication Intelligence Corporation emails, voicemails and
other communications are presumed confidential and should not be forwarded or
otherwise disseminated outside of Communication Intelligence Corporation, except
where required for legitimate business purposes.
In addition to the above responsibilities, if you are handling information
protected by any privacy policy published by us, then you must handle that
information solely in accordance with the applicable policy.
14. Media/Public Discussions.
It is our policy to disclose material information concerning Communication
Intelligence Corporation to the public only through specific limited channels to
avoid inappropriate publicity and to ensure that all those with an interest in
the company will have equal access to information. All inquiries or calls from
the press and financial analysts should be referred to the CEO, President or the
investor relations department. We have designated our CEO, President and CFO as
our official spokespersons for financial matters. We have designated our CEO and
President as our official spokespersons for marketing, technical and other
related information. Unless a specific exception has been made by the CEO,
President or CFO, these designees are the only people who may communicate with
the press on behalf of Communication Intelligence.
15. Waivers.
Any waiver of this Code for executive officers (including, where required
by applicable laws, our principal executive officer, principal financial
officer, principal accounting officer or controller (or persons performing
similar functions)) or directors may be authorized only by our Board of
Directors or a committee of the Board and will be disclosed to stockholders as
required by applicable laws, rules and regulations.
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16. Compliance Standards and Procedures.
Compliance Resources
To facilitate compliance with this Code, we have established the position
of Corporate Responsibility Officer to oversee this program. The Corporate
Responsibility Officer is a person to whom you can address any questions or
concerns. The Corporate Responsibility Officer, Francis V. Dane, can be reached
at (650) 802-7737or via email at FrankDane@aol.com. In addition to fielding
questions or concerns with respect to potential violations of this Code, the
Corporate Responsibility Officer is responsible for:
o investigating possible violations of the Code;
o training new employees in Code policies;
o conducting annual training sessions to refresh employees' familiarity with
the Code;
o distributing copies of the Code annually to each employee with a reminder
that each employee is responsible for reading, understanding and complying
with the Code;
o updating the Code as needed and alerting employees to any updates, with
appropriate approval of the Audit Committee of the Board of Directors, to
reflect changes in the law, Communication Intelligence Corporation
operations and in recognized best practices, and to reflect Communication
Intelligence Corporation experience; and
o otherwise promoting an atmosphere of responsible and ethical conduct.
Your most immediate resource for any matter related to the Code is your
supervisor. He or she may have the information you need, or may be able to refer
the question to another appropriate source. There may, however, be times when
you prefer not to go to your supervisor. In these instances, you should feel
free to discuss your concern with the Corporate Responsibility Officer.
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Clarifying Questions and Concerns; Reporting Possible Violations
If you encounter a situation or are considering a course of action and its
appropriateness is unclear, discuss the matter promptly with your supervisor or
the Corporate Responsibility Officer; even the appearance of impropriety can be
very damaging and should be avoided.
If you are aware of a suspected or actual violation of Code standards by
others, you have a responsibility to report it. You are expected to promptly
provide a compliance resource with a specific description of the violation that
you believe has occurred, including any information you have about the persons
involved and the time of the violation. Whether you choose to speak with your
supervisor or the Corporate Responsibility Officer, you should do so without
fear of any form of retaliation. We will take prompt disciplinary action against
any employee who retaliates against you, up to and including termination of
employment.
Supervisors must promptly report any complaints or observations of Code
violations to the Corporate Responsibility Officer. The Corporate Responsibility
Officer will investigate all reported possible Code violations promptly and with
the highest degree of confidentiality that is possible under the specific
circumstances. Your cooperation in the investigation will be expected. As
needed, the Corporate Responsibility Officer will consult with Corporate Counsel
, the Human Resources department and/or the Audit Committee of the Board of
Directors.
If the investigation indicates that a violation of the Code has probably
occurred, we will take such action as we believe to be appropriate under the
circumstances. If we determine that an employee is responsible for a Code
violation, he or she will be subject to disciplinary action up to, and
including, termination of employment and, in appropriate cases, civil action or
referral for criminal prosecution. Appropriate action may also be taken to deter
any future Code violations.
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