Exhibit 14.1
YDI WIRELESS, INC.
STATEMENT OF BUSINESS CONDUCT
AND CODE OF ETHICS
Revised February 2004
I. PURPOSE AND CORE PRINCIPLES
This Statement of Business Conduct and Code of Ethics ("Code") summarizes
the standards and expectations governing the conduct of the business of YDI
Wireless, Inc. and its subsidiaries (YDI"). These standards are to be applied
with reasonable business judgment to enable YDI to achieve operating and
financial goals within the framework of the law and pursuant to the highest of
ethical standards. We expect our employees, officers, and directors to know and
abide by the basic principles outlined below.
YDI adheres to the following core values and guiding principles:
o Full compliance with applicable laws, rules, regulations, and
standards
o Avoidance of conflicts of interest between YDI and individual
interests
o Cultivation and protection of ideas and inventions within YDI and
respecting the rights of others
o Appropriate creation and maintenance of corporate records
o Honesty and fairness in all of our business activities and
relationships
YDI's Employee Handbook, available through our Finance Department,
contains policies and guides that address these principles. More explanation of
the various policies and guides referred to in this Code can be found in the
Employee Handbook. Each YDI employee, officer, and director is responsible for
being familiar with, understanding, and adhering to these policies and guides,
as updated from time to time, in performing duties for YDI.
A. COMPLIANCE WITH LAWS
Full compliance with applicable laws, rules, regulations, and standards by
YDI, and every YDI employee, officer, and director, is the bedrock of this Code
and is required. Failure to adhere to this Code can damage our reputation,
subject YDI and individuals to liability and/or sanction, and interfere with our
operations. We encourage our employees, officers, and directors to seek advice
when needed from YDI's corporate staff, including the Legal Department and the
Finance Department. In addition, we have a number of internal policies and
compliance guides addressing compliance with specific laws.
Although it is impractical to detail all relevant legal requirements and
standards, the following describes certain compliance areas that impact our
business.
Antitrust; Unfair Competition Antitrust and competition laws generally
prohibit agreements or actions that restrain trade or reduce competition.
Product bundling or
tying, fixing, or controlling prices, boycotting specified suppliers or
customers, allocating products, territories, or markets, or limiting the
production or sale of products are examples of arrangements or conduct
that are addressed by various antitrust and competition laws and
regulations.
Commercial Advertising Commercial advertising, as well as product labels,
should not be false or misleading. Additionally, the laws of some
jurisdictions prohibit or restrict comparative advertising. Also, the use
of a logo or product representation of a third party without consent may
unlawfully infringe a third party's trademark rights or copyright.
Equal Opportunity and Hostile-Free Workplace Job applicants, customers,
vendors, and fellow employees are to be treated with dignity and respect.
YDI endeavors to create and maintain workplaces that are not only free of
any unlawful discrimination, but also are free of conduct that could
create an unlawful or hostile work environment.
Environmental Compliance Local, state, and federal laws regulate a range
of activities that affect the environment, including the use, storage, and
disposal of designated hazardous or toxic materials, the shipping of
hazardous substances, the incorporation of certain materials into
products, and the training of employees in the use, shipping, and disposal
of designated hazardous or toxic materials.
Export/Import Controls Both the United States and foreign governments
restrict trade with designated countries and restrict trade of certain
products with designated countries. YDI procurement and sales employees
and their supervisors are expected to have an active, working knowledge of
what countries are on restricted lists and what products and groups of
products are restricted for import or export. Any invitation to bid,
purchase order, proposed contract, or other document or arrangement that
contains boycott-related clauses or conditions may violate anti-boycott
laws. These restricted product/country lists and the underlying laws and
regulations are subject to frequent change.
Improper Use of Corporate Funds Non-cash gifts or cash payments made or
given for the purpose of obtaining or retaining a business opportunity may
be illegal, particularly if the recipient of the payment or gift is a
government-affiliated or regulated entity or an individual employee of, or
consultant to, any government-affiliated or regulated entity. Careful
attention should be paid to business inducements, including commissions,
rebates, discounts, credits, and allowances, in order to ensure compliance
with applicable laws, including currency exchange controls, anti-kickback
restrictions, and tax regulations.
Insider Trading and Fair Disclosure Insider trading laws generally
prohibit the buying or selling of securities of a company, or influencing
others to trade in a company's securities, based on material information
that is not publicly known. The securities laws also restrict disclosure
of nonpublic information. YDI directors, officers, and employees are
required to treat with utmost care any nonpublic information about YDI or
any other company that they receive in the course of performing service
for YDI. Only designated YDI corporate personnel are permitted to
communicate with research analysts,
2
investment managers, market professionals, and current or potential YDI
security holders about YDI. In addition, YDI directors, officers,
management, and key personnel are subject to a number of internal
restrictions and procedures regarding the trading of YDI securities.
Occupational Safety and Health Laws Occupational health and safety laws
are designed to assure workplace safety and worker health. These laws
address, among other things, the configuration and maintenance of
manufacturing and other work spaces, the handling of hazardous or toxic
substances (and proper training in that regard), appropriate design of
manufacturing processes, and the operation of equipment and machines in
the workplace.
Quality Assurance All employees share in the responsibility to ensure that
our products and operations meet applicable government and quality
standards. Certain laws require the creation and maintenance of detailed
product design and manufacturing records, maintenance and implementation
of quality control procedures, implementation of a well-documented
customer complaint system, and, in some instances, clearance or approval
of a product prior to marketing or sale.
B. CONFLICTS OF INTEREST
YDI employees, officers, and directors have a duty of loyalty to YDI. Any
actual or apparent conflict of interest must be handled honestly and ethically
in accordance with the procedures described below.
Any actual or reasonably apparent conflict of interest, including any
transaction or relationship that reasonably could be expected to give rise to a
conflict of interest, must be disclosed to the person's immediate supervisor or,
if that person is involved in the matter, that person's supervisor.
Alternatively, the matter can be communicated to YDI's Chief Financial Officer,
Controller, and/or Vice President, Legal, either directly or anonymously via the
procedures described under "REPORTING NONCOMPLIANCE" below. All matters
involving officers or directors must be disclosed to the Vice President, Legal
and to the Chairperson of the Audit Committee for review.
Following disclosure, any employee, officer, or director must avoid or
terminate any activity that involves an actual or reasonably apparent conflict
of interest unless it is determined at the appropriate level that the activity
is not harmful to YDI or otherwise improper. Any such determination shall be
made by (i) the Chief Executive Officer in the case of a YDI employee, (ii) the
Chairperson of the Audit Committee in the case of an officer, and (iii) the
non-interested members of the Board of Directors in the case of a director.
The following is a nonexclusive list of examples of situations that
present the appearance of a conflict that must be disclosed:
3
o Performing services for a significant customer, significant
supplier, or competitor of YDI (whether as a consultant, employee,
officer, director, advisor, or in any other capacity), other than at
the request of YDI
o Having a direct or indirect financial interest in, or other
significant personal relationship with, a supplier, customer, or
competitor of YDI, other than an investment representing less than
one percent (1%) of the voting power of a publicly-held company
o Having any other material economic interest in the terms of any
business relationship with YDI, except in one's capacity as a
director, officer, employee, or shareholder
o Taking for himself or herself advantage of opportunities that are
discovered through one's position with YDI or through the use of YDI
property or information
o Using YDI funds, facilities, or other YDI assets for non-business
purposes
o Using or disclosing YDI trade secrets or confidential or other
proprietary information for personal benefit
C. INTELLECTUAL PROPERTY.
YDI endeavors to create a work environment in which each YDI director,
officer, and employee is encouraged to develop, cultivate, maintain, and protect
ideas, copyrights, and inventions that may be used in our business for the
benefit of YDI as a whole. To facilitate this environment, procedures have been
established regarding the preparation, filing, and maintenance of patents and
trademarks, the handling of infringement claims, licensing agreements, the
protection of trade secrets, and invention record keeping. In addition to
protecting YDI's intellectual property, employees, officers, and directors are
expected to respect and therefore refrain from copying or using the ideas,
copyrights, and inventions of others, except pursuant to a valid permit,
license, or similar arrangement from or with the owner of the ideas, copyrights,
or inventions.
D. COMPANY BOOKS, RECORDS, AND COMMUNICATIONS
Accuracy and Completeness YDI's ability to meet its financial, legal, and
management obligations depends on the accuracy and reliability of YDI's
books and records. All business documents, including internal and external
correspondence, memoranda, and communications of any type, are to be
prepared as completely, honestly, and accurately as possible. All
disbursements of funds and all receipts are to be properly and promptly
recorded, and no undisclosed fund may be established for any purpose. The
books and records of YDI must be kept accurately and must fully and fairly
reflect all company transactions.
Privacy of Employee Records Only those employee records required for
business, legal, or contractual reasons are to be maintained. Access to
and knowledge of such records are to be limited to those who need the
information for legitimate business or legal purposes. Employees with
access to personal information about co-workers should be periodically
advised against the misuse and improper disclosure of such information.
4
Records Retention Certain records must be maintained as dictated by
applicable laws or contract requirements or for historical reference
value.
E. HONESTY AND FAIRNESS
Fair Dealing YDI expects each director, officer, and employee to deal
fairly and in good faith with YDI's customers, vendors, competitors,
employees, business partners, and stockholders. No director, officer, or
employee shall take unfair advantage of anyone through manipulation,
concealment, abuse of privileged or confidential information, fraudulent
behavior, or any other unfair practice or behavior.
Gifts and Entertainment As harmless as it may seem to accept gifts or
services offered on the basis of friendly business relationships, this is
an area where conflicts can arise or the appearance of impropriety can
easily occur. For this reason, directors, officers, and employees may not
accept (or offer) gifts or favors of any significant value from (or to)
any supplier or customer, even though the gift may appear unlikely to have
any influence on decisions regarding company business. Gifts, favors, and
entertainment may be given if they are consistent with customary business
practices, are not excessive in value, cannot be construed as a bribe or
payoff, do not violate applicable law or ethical standards, and will not
embarrass YDI or the recipient if publicly disclosed.
Business Inducements Sales-related commissions, rebates, discounts,
credits, and allowances are customary business inducements, but careful
attention is needed to avoid illegal or unethical payments and to ensure
compliance with applicable laws, including currency exchange controls,
anti-kickback restrictions, and tax regulations. Business inducements must
be reasonable in value, competitively justified, properly documented, and
made to the business entity to which the original sales agreement or
invoice was made/issued. They should not be made to individual officers,
employees, or agents of such entity or to a related business entity. They
should also be made in the country of such entity's place of business.
Similarly, commission payments related to purchases of YDI goods should be
made only to the seller or provider, and only in place of business of the
seller or provider or in the country in which the product is delivered.
F. SPECIFIC PROVISIONS APPLICABLE TO FINANCIAL PROFESSIONALS
Each of the Chief Executive Officer of YDI and its senior financial
officers, including the Chief Financial Officer and Controller, and persons
performing similar functions (each of whom, a "Financial Professional"), is
subject to the following additional specific standards:
1. Each Financial Professional must adhere to and endeavor to ensure
that YDI adheres to all applicable governmental laws, rules, and
regulations, as well as the rules and regulations of self-regulatory
organizations of which YDI is a member.
2. Each Financial Professional shall endeavor to ensure full, fair,
accurate, timely and understandable disclosure in reports and
documents that YDI files with, or
5
submits to, the Securities and Exchange Commission and in other
public communications made by YDI.
3. Each Financial Professional shall promptly bring to the attention of
the Chief Financial Officer, the Vice President, Legal, or if
appropriate, the Audit Committee and/or the Chief Executive Officer,
any information he or she may have concerning:
(a) any fraud, whether or not material, that involves management
or other employees who have a significant role in YDI's
financial reporting, disclosures, or internal control over
financial reporting;
(b) any information of which he or she may become aware (including
any material weaknesses or significant deficiencies in YDI's
disclosure controls and procedures or internal control over
financial reporting) that would likely adversely affect the
disclosures made by YDI in its public filings, submissions,
and other public communications;
(c) any evidence of a material violation of the securities or
other laws, rules, or regulations applicable to YDI and the
operation of its business by YDI or any of its agents;
(d) any questionable accounting or auditing matters or other
concerns regarding accounting, internal accounting controls,
or auditing matters; and
(e) any violation of this Code in general or these provisions
specifically applicable to Financial Professionals, including
any actual or apparent conflicts of interest between personal
and professional relationships involving any management or
other employees who have a significant role in YDI's financial
reporting, disclosures, or internal control over financial
reporting.
4. Failure to observe these standards may result in disciplinary
action, including termination of employment and referral for
criminal prosecution, depending on the circumstances.
II. IMPLEMENTATION, MONITORING, AND WAIVERS
YDI's Chief Financial Officer monitors the implementation of this Code
throughout YDI so that YDI's Chief Executive Officer and Board of Directors may
be regularly advised of the status of compliance and level of integrity within
YDI. The Chief Financial Officer, Controller, and Vice President, Legal are
available to provide guidance to employees when faced with ethical
considerations. The Chief Financial Officer and Controller can be reached at
(703) 205-0600, extensions 210 and 246, respectively. The Vice President, Legal
can be reached at 413-665-8551, extension 215.
6
Periodically, YDI's policies, procedures and practices are reviewed and
revised to assure that best practices and compliance with current laws and
standards are in place.
Any waivers of this Code for executive officers or directors or of the
provisions of this Code specifically applicable to Financial Professionals may
be made only by the Board of Directors or a Board committee to which such
responsibility has been delegated and must be publicly disclosed in a prompt
manner.
III. REPORTING NONCOMPLIANCE
It is the obligation of every YDI employee, officer, and director to
adhere to this Code and all existing YDI policies and guides and to report to
YDI any suspected violations in accordance with applicable procedures. The Vice
President, Legal is primarily responsible for investigating and referring (where
appropriate) such reports to the Chief Executive Officer and Board of Directors
for possible action. Communications will be treated in confidence and may be
made anonymously. Should an employee identify him/herself, all reasonable
efforts will be taken by YDI to keep his/her identity confidential. However,
there may be circumstances when YDI is obligated to divulge the person's
identity under federal or state law or pursuant to other authority.
There will be no retribution taken against any employee who reports a
violation or suspected violation in good faith. A supervisor or other employee
will be subject to disciplinary measures for intimidating or imposing sanctions
on an employee that reports a suspected violation of this Code in good faith.
Failure to observe this Code and our policies and guides may result in
disciplinary action, including termination of employment and referral for
criminal prosecution, depending on the circumstances.
Violations - General Suspected violations of this Code can be reported by
notifying the Chief Financial Officer or Controller at 8000 Lee Highway,
Falls Church, VA 22042, telephone - 703-205-0600, extensions 210 and 246,
respectively, and facsimile - 703-205-0672, or the Vice President, Legal
at 20 Industrial Drive East, South Deerfield, MA 01373, telephone - (413)
665-8551, extension 215, and facsimile - (413) 665-0089. Reports will be
treated in confidence and may be made anonymously.
Violations - Accounting Individuals may report questionable accounting or
auditing matters, or other concerns regarding accounting, internal
accounting controls, or auditing matters, by notifying the Chief Financial
Officer or Controller at 8000 Lee Highway, Falls Church, VA 22042,
telephone - 703-205-0600, extensions 210 and 246, respectively, and
facsimile - 703-205-0672, or the Vice President, Legal at 20 Industrial
Drive East, South Deerfield, MA 01373, telephone - (413) 665-8551,
extension 215, and facsimile - (413) 665-0089. Reports will be treated in
confidence and may be made anonymously.
7
Violations - Attorneys In addition to the reporting procedures available
to all directors, officers, and employees, attorneys who represent YDI
(whether employees or non-employees of YDI) and who believe that they
possess credible evidence of a violation of securities laws or breach of
fiduciary duty or similar violations should report that information to the
Vice President, Legal and the Chief Executive Officer. An inquiry will be
conducted into the subject matter of the report and the reporting attorney
will be advised of the result. If the reporting attorney appears and
practices before the Securities and Exchange Commission on YDI's behalf
and does not receive an appropriate response within a reasonable time, the
reporting attorney must report the suspected violation to the Audit
Committee of YDI's Board of Directors.
IV. COMMITMENT TO COMPLIANCE
YDI's Board of Directors and its management are committed to assuring that
YDI manifests the highest level of ethics both within YDI and in the business
relationships in which YDI is engaged. YDI requires that each director, officer,
and employee, in performing his or her duties for YDI, adheres not only to the
letter of this Code but also to its intent and spirit.
As previously indicated, YDI regularly adopts and updates policies and
guides that are intended to provide guidelines and answers to our employees,
officers, and directors in connection with expected ethical conduct. No policy
or guide, however, will provide definitive answers to all questions. If there
are questions regarding the Code, or the standards, policies, or guides
referenced herein, or if there is doubt about the best course of action in a
particular situation, please call our Chief Financial Officer at 701-205-0600,
extension 210, our Controller at 703-205-0600, extension 246, or our Vice
President, Legal at 413-665-8551, extension 215.
8