EXHIBIT 14.1
COMMERCE ENERGY GROUP, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
I. INTRODUCTION
Set forth herein is the Code of Business Conduct and Ethics adopted by
Commerce Energy Group, Inc. ("CEG"). This Code summarizes the basic principles
and standards of conduct to guide all directors, officers and employees of CEG
in our goal to achieve the highest business and personal ethical standards as,
well as compliance with the laws and regulations that apply to our business. All
of our directors, officers and employees must conduct themselves accordingly in
every aspect of our business and seek to avoid even the appearance of improper
behavior. Our goal has been, and will continue to be, to advance the highest
standards of ethical conduct. We expect all of our agents, consultants,
contractors, suppliers and representatives to be guided by the principles and
standards set forth in this Code. The Code does not supersede, change or alter
existing CEG policies and procedures, including, but not limited to, CEG's
Employee Handbook and Insider Trading Policy.
The Code of Business Conduct and Ethics is designed to deter wrongdoing
and to promote:
- Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
- Full, fair, accurate, timely, and understandable disclosure in
reports and documents that CEG files with the Securities Exchange
Commission and in other public communications,
- Compliance with applicable governmental laws, rules and regulations,
- The prompt internal reporting of violations of the Code, and
- Accountability for adherence to the Code.
The Code covers a wide range of business practices and procedures, but is
not intended to summarize all applicable laws and regulations or to respond to
every question or concern that may arise. If you have a question regarding any
of the goals, principles, or standards discussed or policies or procedures
referred to in this Code or are in doubt about the best course of action to take
in a particular situation, please contact CEG's General Counsel or follow the
procedures set forth in Section XVI of this Code.
Every director, officer and employee of CEG has a duty to adhere to this
Code. Every director, officer and employee of CEG shall receive a copy of this
Code and be required to sign an acknowledgement of receipt in the form attached
hereto as Exhibit A. Any individual who violates the standards in this Code is
subject to disciplinary action, up to and including termination, and civil and
criminal prosecution, if appropriate. If you are in a situation that you believe
may violate or lead to a violation of this Code, follow the guidelines described
in Section XVI of this Code.
II. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
Obeying the law, both in letter and in spirit, is the foundation on which
CEG's ethical standards are built. All directors, officers and employees must
respect and obey the laws of the cities, states and countries in which we
operate. Although not all employees are expected to know the details of these
laws, it is important to know enough to determine when to seek advice from
supervisors, managers or other appropriate personnel. Compliance with the law
does not obviate the need to act with the highest ethical standards.
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CEG provides a wide range of training, both mandatory and voluntary, for
employees to promote understanding and compliance with various laws, rules and
regulations.
III. CONFLICTS OF INTEREST
A "conflict of interest" exists when a person's private interest
interferes in any way with the interests of CEG. A conflict situation can arise
when a director, officer or employee takes actions or has interests that may
make it difficult to perform his or her CEG work objectively and effectively.
Conflicts of interest may also arise when a director, officer or employee, or
members of his or her family, receives improper personal benefits as a result of
his or her position with CEG. Loans to, or guarantees of obligations of,
officers and employees, and their family members, may create conflicts of
interest. Loans to directors and executive officers of CEG are prohibited by law
and may not be made.
A conflict of interest may arise if a director, officer or employee of CEG
works simultaneously for a competitor, customer or major supplier. You are not
allowed to work for a competitor as a consultant or board member. The best
policy is to avoid any direct or indirect business connection with our
customers, suppliers or competitors, except on our behalf.
Conflicts of interest are prohibited as a matter of CEG policy, except
under guidelines approved by the Board of Directors. Conflicts of interest may
not always be clear cut. If questions arise, you should consult CEG's General
Counsel. The Chief Executive Officer and directors must report any such
circumstance to and obtain approval from the Audit Committee.
Any director, officer or employee who becomes aware of a conflict or a
potential conflict should bring it to the attention of a supervisor, manager or
other appropriate personnel or follow the procedures described in Section XVI of
this Code.
IV. INSIDER TRADING
Directors, officers and employees of CEG who have access to confidential
information are not permitted to use or share that information for stock trading
purposes or for any other purpose except the conduct of our business. All non
public information about CEG should be considered confidential information. To
use non public information for personal financial benefit or to "tip" others who
might make an investment decision on the basis of this information is not only
unethical but also illegal. Please refer to CEG's Insider Trading Policy for
more information regarding CEG's policies and procedures with respect to trading
in CEG's securities. If you have any questions, please consult CEG's General
Counsel.
This guidance also applies to trading in securities of other companies for
which you receive information in the course of your employment with CEG.
All employees are prohibited from conducting commodity transactions in
their personal accounts in any commodity in which the Company transacts.
V. CORPORATE OPPORTUNITIES
Directors, officers and employees are prohibited from personally
benefiting from opportunities that are discovered through the use of corporate
property, information or position without the consent of CEG's Board of
Directors. No director, officer or employee may use corporate property"
information, or position for improper personal gain. Directors, officers and
employees owe a duty to CEG to advance its legitimate interest when the
opportunity to do so arises.
VI. COMPETITION AND FAIR DEALING
We seek to outperform our competition fairly and honestly. We seek
competitive advantages through superior performance, never through unethical or
illegal business practices. Stealing proprietary
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information, possessing trade secret information that was obtained without the
owner's consent, or inducing such disclosures by past or present employees of
other companies is prohibited. No director, officer or employee of CEG should
take unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other
intentional unfair dealing practice.
The purpose of business entertainment and gifts in a commercial setting is
to create good will and sound working relationships, not to gain unfair
advantage with customers. No gift or entertainment should ever be offered,
given, provided or accepted by any CEG director, officer, employee, family
member of any of the foregoing or agent unless it:
- is not a cash gift;
- is consistent with customary business practices;
- is not excessive in value;
- cannot be construed as a bribe or payoff; and
- does not violate any laws or regulations.
Please discuss with your supervisor any gifts or proposed gifts that you
are not certain are appropriate.
VII. DISCRIMINATION AND HARASSMENT
The diversity of CEG's employees is a tremendous asset. As evidenced by
our equal employment opportunity and anti harassment policies, CEG is firmly
committed to providing equal employment opportunity to qualified individuals
regardless of race, color, religion, gender, age, national origin, sexual
orientation, disability, veteran status, marital status, or other protected
status. CEG will not tolerate illegal discrimination or harassment of any kind.
Our anti-harassment policy explains in detail the types of conduct that are
prohibited. Examples include derogatory comments based on racial or ethnic
characteristics and unwelcome conduct of a sexual nature. Violations of our anti
harassment and equal employment opportunity policies should be reported
immediately as provided in those policies and in Section XVI, below.
All of our employees deserve a work environment where they will be
respected and CEG is committed to providing an environment that supports
honesty, integrity, respect, trust and responsibility. All of our employees
should contribute to the creation and maintenance of such an environment and our
executive officers and management and supervisory personnel should take a
leadership role in achieving a work environment that meets our diversity
standards and is free from discrimination and harassment.
VIII. HEALTH AND SAFETY
CEG strives to provide each employee with a safe and healthy work
environment. Each employee has a responsibility for maintaining a safe and
healthy workplace for all employees by following safety and health rules and
practices and reporting accidents, injuries and unsafe equipment, practices or
conditions and complying with visitor hosting procedures and other facility
security related policies and procedures.
Violence and threatening behavior are not permitted. Employees should
report to work in condition to perform their duties, free from the influence of
alcohol, illegal drugs or controlled substances. Employees who report to work
under the influence of or in possession of illegal drugs or alcohol are subject
to disciplinary action up to and including termination.
IX. RECORD KEEPING
CEG requires honest and accurate recording and reporting of information in
order to make responsible business decisions.
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Many directors, officers and employees regularly use business expense
accounts, which must be documented and recorded accurately. No one should
rationalize or even consider misrepresenting facts or falsifying records. If you
are not sure whether a certain expense is legitimate, ask your supervisor or the
Corporate Accounting Department. Rules and guidelines are available from the
Corporate Accounting Department.
All of CEG's books, records, accounts and financial statements must be
maintained in reasonable detail, must appropriately reflect CEG's transactions,
and must conform both to applicable legal requirements and to CEG's system of
internal controls and generally accepted accounting principles. Unrecorded or
"off the books" funds or assets should not be maintained unless permitted by
applicable law or regulation.
Business records and communications often become public, and we should
avoid exaggeration, derogatory remarks, guesswork, or inappropriate
characterizations of people and companies that can be misunderstood. This
applies equally to e mail, internal memos, and formal reports. Records should
always be retained or destroyed according to CEG's record retention policies. In
accordance with those policies, in the event of litigation or governmental
investigation please consult CEG's General Counsel.
X. FINANCIAL REPORTING AND DISCLOSURE
All transactions involving CEG and its subsidiaries must be documented, in
reasonable detail, and accounted for on the books and records of CEG in
accordance with generally accepted accounting principles and applicable laws and
regulations. CEG's Chief Financial Officer ("CFO") is the chief accounting
officer of CEG and is responsible for establishing and maintaining accounting
policies and procedures, disclosure controls and internal control standards and
the requirements for financial reporting to CEG's Management and others.
XI. CONFIDENTIALITY
Directors, officers and employees must safeguard the confidentiality of
confidential information entrusted to them by CEG or its customers, except when
disclosure is authorized by the Legal Department or required by laws or
regulations. Confidential information includes all non public information that
might be of use to competitors, or harmful to CEG or its customers, if
disclosed. It also includes information that suppliers and customers have
entrusted to us. The obligation to preserve confidential information continues
even after employment ends. All officers and employees must complete training on
CEG Privacy and Security policies and procedures and comply with applicable
federal and state privacy requirements. Any violation of HIPAA privacy
requirements should be reported to your supervisor.
XII. PROTECTION AND PROPER USE OF CEG ASSETS
All directors, officers and employees should endeavor to protect CEG's
assets, including funds, property, electronic communications systems,
information resources, data, facilities, equipment and supplies to ensure their
efficient use. Protection of CEG's assets is vital since theft, carelessness and
waste have a direct impact on CEG's profitability. Any suspected incident of
fraud or theft should be immediately reported for investigation pursuant to
Section XVI of this Code. CEG assets should not be used for non-CEG business,
although we recognize that incidental personal use may be permitted without
adversely affecting the interests of CEG. Personal use of CEG assets must always
be in accordance with CEG policy. You should consult your supervisor for
appropriate guidance and permission.
The obligation of directors, officers and employees to protect CEG's
assets includes its proprietary information. Proprietary information includes
intellectual property such as trade secrets, software programs, patents,
trademarks and copyrights, as well as business, marketing and service plans,
designs, databases, records, salary information and any unpublished financial
data and reports. Unauthorized use or distribution of this information is a
violation of CEG policy. It could also be illegal and result in civil or
criminal penalties. Each employee of CEG is required to comply with the
provisions of the
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Intellectual Property and Technical Information Agreement, whether or not such
agreement has been executed by the employee.
XIII. PAYMENTS TO GOVERNMENT PERSONNEL
The U.S. Foreign Corrupt Practices Act prohibits giving anything of value,
directly or indirectly, to officials of foreign governments or foreign political
candidates in order to obtain or retain business. It is strictly prohibited to
make illegal payments to government officials of any country.
In addition, the U.S. government has a number of laws and regulations
regarding business gratuities that may be accepted by U.S. government personnel.
The promise, offer or delivery to an official or employee of the U.S. government
of a gift, favor or other gratuity in violation of these rules would not only
violate CEG policy but could also be a criminal offense. State and local
governments, as well as foreign governments, may have similar rules. CEG's
General Counsel can provide guidance to you in this area.
XIV. IMPROPER INFLUENCE ON CONDUCT OF AUDITS
No director, officer or employee of CEG shall take any action (e.g.,
offering or paying bribes or other financial incentives, providing inaccurate or
misleading legal analysis, blackmailing, and making physical threats) or make
any false, misleading or inaccurate oral or written statement to fraudulently
influence, coerce, manipulate or mislead an independent auditor engaged in the
performance of an audit of CEG's financial statements for the purpose of
rendering the financial statements materially misleading.
XV. COMPLIANCE PROCEDURES
Each director, officer and employee of CEG must work to ensure prompt and
consistent action against violations of this Code. However, in some situations
it may be difficult to know if a violation has occurred. Since we cannot
anticipate every situation that will arise, it is important that we have a way
to approach a new question or problem. These are the steps to keep in mind:
- Make sure you have all the facts. In order to reach the right
solutions, we must be as fully informed as possible.
- Ask yourself: What specifically am I being asked to do? Does it seem
unethical or improper? This will enable you to focus on the specific
question you are faced with, and the alternatives you have. Use your
judgment and common sense; if something seems unethical or improper,
it probably is.
- Clarify your responsibility and role. In most situations, there is
shared responsibility. Are your colleagues informed? It may help to
get others involved and discuss the problem.
- Discuss the problem with your supervisor. This is the basic guidance
for all situations. In many cases, your supervisor will be more
knowledgeable about the question, and will appreciate being brought
into the decision making process. Remember that it is your
supervisor's responsibility to help solve problems.
- Seek help from CEG resources. In the case where it may not be
appropriate to discuss an issue with your supervisor, or where you
do not feel comfortable approaching your supervisor with your
question, discuss it with your office manager or Human Resources
manager. If that also is not appropriate, call CEG's General
Counsel.
- You may report ethical violations in confidence and without fear of
retaliation. If your situation requires that your identity be kept
secret, every effort will be made to protect your anonymity.
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CEG does not permit retaliation of any kind against employees for
good faith reports of ethical violations or misconduct.
- Always ask first, act later. If you are unsure of what to do in any
situation, seek guidance before you act.
XVI. REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR
Directors, officers and employees are encouraged to promptly discuss with,
or otherwise disclose to, their supervisors, managers or other appropriate
personnel any observed or suspected illegal or unethical behavior. In the case
where it may not be appropriate to discuss an issue with your supervisor, or
where you do not feel comfortable approaching your supervisor with your
question, discuss it with your office manager or your Human Resources manager.
If that also is not appropriate, call CEG's General Counsel.
Reporting of violations will remain confidential to the degree possible.
No employee of CEG may be discharged, demoted, suspended, threatened, harassed
or in any other manner be discriminated against in the terms and conditions of
their employment because of reporting or aiding in the investigation of illegal
or unethical behavior. Directors, officers and employees are expected to
cooperate in internal investigations of misconduct.
XVII. VIOLATIONS OF THE CODE AND DISCIPLINARY ACTION
Every director, officer and employee of CEG has a duty to adhere to this
Code. Any individual who violates the standards in this Code is subject to
disciplinary action, up to and including termination, and civil and criminal
prosecution, if appropriate. CEG will promptly and properly document all reasons
for disciplinary actions taken against its directors, officers and employees for
violations of the Code.
XVIII. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS
Any waiver of this Code for directors or executive officers of CEG may be
made only by CEG's Board of Directors or a committee thereof and will be
promptly disclosed as required by law or by stock exchange or market rule or
regulation.
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Exhibit A
FORM OF ACKNOWLEDGMENT OF RECEIPT OF CODE OF BUSINESS CONDUCT AND ETHICS
I acknowledge that I have received a copy of the Company's Code of
Business Conduct and Ethics and acknowledge that it is my responsibility to read
it, understand its contents, and adhere to all of the terms of and procedures in
the policy. I further acknowledge that nothing in the Code of Business Conduct
and Ethics changes my at-will employment relationship with the Company, which
means that either I or the Company can terminate my employment at any time, for
any or no reason, with or without notice. I also understand that the Company
reserves the right to modify or terminate its Code of Business Conduct and
Ethics with or without notice, at any time in its sole discretion.
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Employee Name (Printed) Employee Signature Date
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