DOCUMENT CAPTURE TECHNOLOGIES, INC.
CODE OF ETHICS
Dated: February 26th, 2008
1. PURPOSE.
The Board of Directors (the "BOARD") of Document Capture Technologies,
Inc., a Delaware corporation (the "COMPANY") has adopted the following Code of
Ethics (the "CODE") to apply to all officers, employees, and directors of the
Company. The Code is intended to promote ethical conduct and compliance with
laws and regulations, to provide guidance with respect to the handling of
ethical issues, to implement mechanisms to report unethical conduct, to foster a
culture of honesty and accountability, to deter wrongdoing, and to ensure fair
and accurate financial reporting.
No code or policy can anticipate every situation that may arise.
Accordingly, this Code is intended to serve as a source of guiding principles.
You are encouraged to bring questions about particular circumstances that may
involve one or more of the provisions of this Code to the attention of the
Company's Chief Executive Officer or Chairman of the Board, who may consult with
the Company's outside legal counsel as appropriate.
2. INTRODUCTION.
The Company's officers, employees, and directors are expected to adhere
to a high standard of ethical conduct. The reputation and good standing of the
Company depend on the conduct of the Company's business and how the public
perceives such conduct. Unethical actions, or the appearance of unethical
actions, are unacceptable. In addition to each of the directives set forth in
this Code, the Company's officers, employees, and directors shall be guided by
the following principles in carrying out their duties and responsibilities on
behalf of the Company:
o Loyalty, Honesty, and Integrity. You must not be, or appear to be,
subject to influences, interests, or relationships that conflict with
the best interests of the Company.
o Observance of Ethical Standards. When carrying out your duties and
responsibilities for, and on behalf of, the Company, you must adhere
to the high ethical standards described in this Code.
o Accountability. You are responsible for your own adherence and the
adherence of the other officers, employees, and directors to whom this
Code applies. Familiarize yourself with each provision of this Code.
3. INTEGRITY OF RECORDS AND FINANCIAL REPORTING.
The Chief Financial Officer, Chief Accounting Officer, and Controller
(collectively, "Senior Financial Officers") and the Chief Executive Officer are
responsible for the accurate and reliable preparation and maintenance of the
Company's financial records. Accurate and reliable preparation of financial
records is of critical importance to proper management decisions and the
fulfillment of the Company's financial, legal, and reporting obligations. As a
public company, Document Capture Technologies files annual and periodic reports
and makes other filings with the Securities and Exchange Commission (the "SEC").
It is critical that these reports be timely and accurate. The Company expects
those officers who have a role in the preparation and/or review of information
included in the Company's SEC filings to report such information accurately and
honestly. Reports and documents the Company files with, or submits to, the SEC,
as well as other public communications made by the Company, must contain full,
fair, accurate, timely, and understandable disclosure.
The Chief Executive Officer and Senior Financial Officers are
responsible for establishing, and together with the directors or the members of
the Company's Audit Committee, as the case may be, overseeing adequate
disclosure controls and procedures and internal controls and procedures,
including procedures which are designed to enable the Company to: (a) accurately
document and account for transactions on the books and records of the Company
and its subsidiaries; and (b) maintain reports, vouchers, bills, invoices,
payroll and service records, performance records, and other essential data with
care and honesty.
4. CONFLICTS OF INTEREST.
You must not participate in any activity that could conflict with your
duties and responsibilities to the Company. A "conflict of interest" arises when
one's personal interests or activities appear to, or may, influence such
person's ability to act in the best interests of the Company. Any material
transaction or relationship that reasonably could be expected to give rise to a
conflict of interest should be disclosed to the Company's Chief Executive
Officer. In addition, because conflicts of interest are not always obvious, you
are encouraged to bring questions about particular situations to the attention
of the Company's Chief Executive Officer.
This Code does not describe all possible conflicts of interest that
could develop. Some of the more common conflicts from which you must refrain are
set forth below:
o Family Members. You may encounter a conflict of interest when doing
business with, or competing with, organizations in which you have an
ownership interest or in which your family member has an ownership or
employment interest. "Family members" include a spouse, parents,
children, siblings, and in-laws. You must not conduct business on
behalf of the Company with family members or an organization with
which your family member is associated, unless such business
relationship has been disclosed and authorized by a majority of the
independent members of the Board.
o Improper Conduct and Activities. You may not engage in any conduct or
activities that are inconsistent with the Company's best interests or
that disrupt or impair the Company's relationship with any person or
entity with which the Company has entered, or proposes to enter, into
a business or contractual relationship.
o Compensation for Services Performed for the Company from Non-Company
Sources. You may not accept compensation in any form for services
performed for the Company from any source other than the Company.
o Gifts. You and members of your immediate family may not accept gifts
from persons or entities if such gifts are made in order to influence
you in your capacity as an officer, employee, or director of the
Company, or if acceptance of such gifts could create the appearance of
a conflict of interest.
o Personal Use of Company Assets. You may not use Company assets, labor,
or information for personal use other than incidental personal use,
unless approved by a majority of the independent members of the Board
or as part of a compensation or expense reimbursement program.
5. CORPORATE OPPORTUNITIES.
You are prohibited from: (a) taking for yourself personally
opportunities related to the Company's business; (b) using the Company's
property, information, or position for personal gain; or (c) competing with the
Company for business opportunities; provided, however, if the Company's
disinterested directors determine that the Company will not pursue such
opportunity, the individual may take the opportunity after disclosure of all
material facts by the individual seeking to pursue the opportunity.
6. CONFIDENTIALITY.
You must maintain the confidentiality of information entrusted to you
by the Company and any other confidential information about the Company, its
business, customers, or suppliers, from whatever source, except when disclosure
is authorized or legally mandated. For purposes of this Code, "confidential
information" includes all non-public information relating to the Company, its
business, customers, or suppliers.
7. COMPLIANCE WITH LAWS, RULES, AND REGULATIONS.
It is the Company's policy to comply with all applicable laws, rules,
and regulations, and the Company expects its officers, employees, and directors
to carry out their responsibilities on behalf of the Company in accordance with
such laws, rules, and regulations and to refrain from illegal conduct.
Transactions in Company securities are governed by the Company's Insider Trading
Policy, which is discussed in Section 10 of this Code.
8. ENCOURAGING THE REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOR.
The Company is committed to operating according to the highest
standards of business conduct and ethics and to maintaining a culture of ethical
compliance. Officers, employees, and directors should promote an environment in
which the Company: (a) encourages officers, employees, and directors to talk to
supervisors, managers, and other appropriate personnel when in doubt about the
best course of action in a particular situation; (b) encourages officers,
employees, and directors to report violations of laws, rules and regulations to
appropriate personnel; and (c) informs officers, employees, and directors that
the Company will not allow retaliation for reports made in good faith.
9. FAIR DEALING.
The officers, employees, and directors should deal fairly with the
Company's customers, suppliers, competitors, and other officers, employees, and
directors. It is the policy of the Company to prohibit any person from taking
unfair advantage of another through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other unfair
dealing practice.
10. INSIDER TRADING POLICY.
10.1. GENERAL RESTRICTIONS AGAINST INSIDER TRADING.
No officer, employee, or director, or Family Member (as defined under
Section 4) of any officer, employee, or director, or any entity owned or
controlled by any officer, employee, or director, may:
o purchase or sell any securities of the Company while he/she is aware
of any material nonpublic information concerning the Company;
o disclose to any other person any material nonpublic information
concerning the Company if it is reasonably foreseeable that such
person may use that information in purchasing or selling Company
securities;
o purchase or sell any securities of another company while he/she is
aware of any material nonpublic information concerning such other
company which he/she learned in the course of his/her service as an
officer, employee, or director of the Company; or
o disclose to any other person any material nonpublic information
concerning another company which he/she learned in the course of
his/her service as an officer, employee, or director of the Company if
it is reasonably foreseeable that such person may use that information
in purchasing or selling securities of such other company.
Generally, information is considered "material" if a reasonable
investor would consider it important in making his/her investment decision. Such
information would include, for example, earnings results, acquisitions,
divestitures, or pending changes in management or control.
The prohibition on purchase and sales of Company securities while aware
of material nonpublic information concerning the Company does not apply to a
transaction pursuant to a Trading Plan that complies with Section 10.2(b) below.
10.2. BLACKOUT PERIODS.
(a) No officer, Senior Financial Officer, or director, or
Family Member (as defined under Section 4) of any officer, Senior Financial
Officer, or director, or any entity owned or controlled by any officer, Senior
Financial Officer, or director, may make any purchase or sale of securities of
the Company during the following time periods (each a "Blackout Period"):
o beginning one month prior to the end of each fiscal quarter and ending
upon the completion of the third full trading day after the public
announcement of earnings for such quarter;
o beginning at the time of any public earnings-related announcement or
public announcement of a significant corporate transaction or event
and ending upon the completion of the third full trading day after
such announcement; or
o during such other periods as may be established from time to time by
the Board or the Chief Executive Officer in light of particular events
or developments affecting the Company.
Additionally, no officer, Senior Financial Officer, or director, or Family
Member (as defined under Section 4) of any officer, Senior Financial Officer, or
director, or any entity owned or controlled by any officer, Senior Financial
Officer, or director, may inform a person not covered by this Section 10.2 that
a Blackout Period is in effect.
(b) The prohibition on purchase and sales of Company
securities during a Blackout Period does not apply to the following:
o purchases made under an employee stock purchase plan operated by the
Company; provided, however, that the securities so acquired may not be
sold during a Blackout Period;
o exercises of stock options or the surrender of shares to the Company
in payment of the exercise price or in satisfaction of any tax
withholding obligations, in each case in a manner permitted by the
applicable stock option; provided, however, that the securities so
acquired may not be sold (either outright or in connection with a
"cashless" exercise transaction through a broker) during a Blackout
Period;
o acquisitions or dispositions of Company common stock under the
Company's 401(k) plan that are made pursuant to standing instructions
not entered into or modified during a Blackout Period;
o purchases of securities from the Company or sales of securities to the
Company; and
o purchases or sales made pursuant to a binding contract, written plan
or specific instruction (a "Trading Plan") that is adopted and
operated in compliance with Rule 10b5-1; PROVIDED such trading plan:
(1) is in writing; (2) was submitted to the Company for review by the
Company prior to its adoption; and (3) was not adopted during a
Blackout Period; and PROVIDED FURTHER that if such Trading Plan
provides for trades to occur only once per quarter or less frequently
(other than a plan that relates solely to the immediate sale of shares
acquired under an employee stock purchase plan) such Trading Plan may
not provide for trades to occur during a regularly scheduled
quarter-end blackout period.
10.3. PRECLEARANCE.
No officer, employee, or director, or Family Member (as defined under
Section 4) of any officer, employee, or director, or any entity owned or
controlled by any officer, employee, or director, may make any purchase or sale
of securities of the Company (including derivative securities) unless he/she
notifies the Company's designated compliance officer prior to such purchase or
sale.
11. WAIVERS.
It is the Company's policy that waivers of this Code will not be
granted except in exigent circumstances. Any waiver of this Code may only be
granted by a majority of the Board, and only after disclosure of all material
facts by the individual seeking the waiver. Any waiver of this Code will be
promptly disclosed as required by law or stock exchange regulation.
12. ANNUAL ACKNOWLEDGMENT.
All officers, employees, and directors of the Company must acknowledge
receipt of, and certify their willingness to adhere to, the foregoing when first
employed or appointed and thereafter on the anniversary of each such officer,
employee, or director's, as the case may be, employment or appointment. Copies
of any acknowledgements must be submitted to the Board no later than the 5th
business day following the event that triggers the requirement of
acknowledgment.
13. CONCLUSION.
You should communicate any suspected violation of this Code, or any
unethical behavior encompassed by this Code, promptly to the Chief Executive
Officer, or if any such behavior involves the Chief Executive Officer such
communications should be brought to the attention of the next highest ranking
officer of the Company. Violations will be taken seriously and investigated by
the Board or by a person or persons designated by the Board, and appropriate
disciplinary action will be taken in the event of any violations of this Code.
If there are any questions involving application of this Code, guidance
should be sought from the Company's corporate counsel.