EXHIBIT 10.43
PLATO LEARNING, INC.
BUSINESS ETHICS POLICY
PURPOSE
The purpose of this Business Ethics Policy is to emphasize and affirm PLATO
Learning, Inc.'s commitment to comply with the applicable laws of each
jurisdiction where it conducts business and its expectation that all employees
will be guided by the basic principles of honesty and fairness in their dealings
with customers, suppliers, government officials and regulatory authorities and
to establish guidelines to assist employees in identifying situations involving
possible conflict of interests.
POLICY
The Company's success depends, in part, on a high level of public confidence. To
sustain this confidence, we must observe the highest standards of ethical and
legal behavior. Although customers and standards of ethics may vary in different
business environments, honesty and integrity characterize the Company's business
activities worldwide. As employees of the Company, we are expected to be honest
and alert to ethical and legal responsibilities and to act in good faith. Our
actions must be based upon sound judgment. Employees will not be permitted to
achieve results at the cost of violating laws or through unscrupulous dealings.
I. ETHICAL AND LEGAL GUIDELINES
A. COMPLIANCE WITH LAWS
The Company is committed to complying with the applicable laws
of the jurisdictions where it transacts business. In some
instances, the laws may be ambiguous and difficult to
interpret. Management has access to legal counsel and will
seek advice as necessary in order to comply with this Policy.
Employees are encouraged to consult with their supervisor in
situations where the employee is uncertain of the propriety of
a given transaction.
B. PROHIBITED PAYMENTS AND GIFTS
The U.S. Foreign Corrupt Practices Act ("FCPA"), as amended,
criminalizes corrupt payments (e.g., bribes) to foreign
officials that are made in order to obtain business. The
penalties are significant. Corporations may be fined up to
$2,000,000. Individual employees may be fined up to $250,000
and imprisoned for up to six (6) years. The
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Company competes on the basis of quality, service and price.
As a result, no payment or gift of any kind shall be made to
any person on behalf of the Company to influence any act or
decision of any government official, candidate for political
office or political party for the purpose of inducing that
person, candidate or party to use his, her, or its influence
to affect any government act or decision that would assist the
Company in obtaining, retaining or directing business. The
FCPA applies everywhere in the world where we do business. A
violation occurs when a payment is made or promised to be made
to a foreign government official while knowing that the
payment will be used to unlawfully obtain or maintain business
or direct business to anyone else.
In addition to the provisions of this Policy, employees
working with the U.S. government, state or local governments,
or governments of those countries where we operate, have an
additional obligation to know, understand and abide by the
laws, regulations and ethical standards of those branches of
governments that may be more strict than those that apply to
our non-government customers and suppliers.
If a government agency, whether federal, state or local, has
adopted a more stringent policy than the Company's regarding
gifts and gratuities, employees and representatives must
comply with that more stringent policy.
We will not give or encourage anyone else to give inducements
of any kind to any government and non-government employee of
the U.S. or any other government, or to any suppliers under
government or non-government contracts or subcontracts, in
order to gain any business advantage or contract.
C. FACILITATING GOVERNMENT PAYMENTS
Subject to prior review and approval by the President and
Chief Executive Officer or his designee, employees may make
small payments to government employees for the purpose of
facilitating, securing or expediting the performance of a
routine, non-discretionary, governmental action, provided that
such payments may be made:
1. only in nominal amounts (no individual payment in
excess of $250);
2. upon the initiation of the government employee;
3. where the government employee will not otherwise
perform the routine, non-discretionary action; and
4. where a normal and fully legitimate transaction might
otherwise be impeded. The term "routine,
non-discretionary, governmental action" includes,
among other things, processing governmental papers
(e.g., visas and shipping documents), providing mail
or phone services,
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loading or unloading cargo, scheduling inspections or
obtaining permits, licenses or other official
documents to qualify a subsidiary or affiliate to do
business. All such payments shall be accurately
recorded on the Company records and properly treated
for tax purposes.
Under no circumstances may a payment be made to induce any
action by a government employee that involves a decision to
award or continue business with the Company.
No facilitating payment may be made to an employee of the
United States, United Kingdom or Canadian Governments.
D. POLITICAL CONTRIBUTIONS
No funds or assets of the Company shall be used, directly or
indirectly, for political contributions, even where permitted
by applicable local law, without review and the prior written
approval of the President and Chief Executive Officer of the
Company or his designee. This prohibition applies only to the
direct or indirect use of Company funds or assets and should
not be construed to prohibit employees from making political
contributions or engaging in political activities in their
individual capacities, on their own time and at their own
expense. Under no circumstances shall employees be reimbursed
in any way for personal contributions.
E. GIVING OF BUSINESS GIFTS AND MEALS
Gifts in the form of cash or cash equivalents (e.g., checks,
marketable securities, or gift certificates) may not be given
regardless of the amount.
The giving of "courtesy" business gifts is permissible, for
example:
1. candy, beverages and fruit of nominal value;
2. flowers of nominal value given on traditional
occasions; or
3. souvenirs or advertising novelties of nominal value.
The Company's relationships with commercial customers may
occasionally present circumstances where gifts or favors are
exchanged as an accepted business practice or as a matter of
courtesy, without inference of unethical conduct.
Presentations of a ceremonial nature in keeping with national
custom may be permitted as long as what is accepted is not in
violation of any law, cannot be construed as a bribe or a
payoff and would not embarrass the Company or ourselves if
disclosed publicly. Gifts, when made, must be legal and in
accordance with the generally accepted business practices of
the governing jurisdictions. Review and prior
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approval of the President and Chief Executive Officer or his
designee is necessary when any gift is to be given with a
value in excess of $250.
Certain business courtesies, such as payment for a lunch or
dinner in connection with a business meeting, are permissible
so long as the cost of the lunch or dinner is reasonable in
amount and in accordance with generally accepted local
practice. It is important to note that many customers/public
officials have strict rules around the acceptance of these and
other gifts. Business meals involving public officials should
never be on a scale that might compromise or give the
impression of compromising the integrity of such officials or
the Company.
In order to administer Company policy and facilitate
compliance, no gift shall be paid for directly by sales
representatives, sales managers or marketing employees and
submitted for reimbursement on an expense report. All gifts
are to be paid for by the Company through the normal accounts
payable disbursement process.
Gifts should be accurately recorded on the Company records and
properly treated to tax purposes.
F. ACCEPTANCE OF BUSINESS GIFTS
We will not be influenced by gifts or favors of any kind from
our suppliers or potential suppliers. The Company expects each
employee to exercise reasonable judgment and discretion in
accepting any gratuity or gift offered to the employee in
connection with employment at the Company.
Employees or members of his or her immediate family, should
not seek or accept any gifts, entertainment, payments, fees,
services, valuable privileges, vacations or pleasure trips
(without a legitimate business purpose), loans or other favors
from any person or entity that has, is likely to have, or is
seeking to establish a business relationship (such as
customers, competitors, or vendors) with the Company from
which it might be inferred that such action was intended to
influence or possibly influence the employee in the
performance of his or her duties.
This does not apply to unsolicited promotional materials of a
general advertising nature, such as imprinted pencils, memo
pads and calendars as long as what is given is accepted
without any express or implied understanding that the
recipient is in any way obligated. Gifts of nominal value are
permitted, provided they are given as a gesture of
professional friendship, and do not involve a Company
commitment having to do with the transaction of business. In
most cases, such a gift should be donated to charity or, at a
minimum, shared within the employee's department or working
group.
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Where larger gifts are unavoidable because of local custom,
they must be reported to the President and Chief Executive
Officer or his designee.
Gifts in the form of cash or cash equivalents (e.g., checks or
marketable securities) shall not be accepted regardless of the
amount.
G. GOVERNMENT INVESTIGATIONS
The Company intends to fully cooperate with any appropriate
governmental investigation. A condition of such cooperation,
however, is that the Company be adequately represented in such
investigations by its own legal counsel. Accordingly, any time
an employee obtains knowledge which would reasonably lead one
to believe that a government investigation or inquiry is
underway, that information should be communicated immediately
to the President and Chief Executive Officer or his designee.
Routine dealings with the government, such as routine tax
audits, are not covered by this Policy.
H. PROPER ACCOUNTING AND INTERNAL CONTROL
Compliance with generally accepted accounting principles is
required at all times. The books of accounts must truly
reflect the transactions they record. There shall be no
concealment of information from the Company's finance staff or
independent auditors. All assets and liabilities of the
Company, in particular bank accounts in which Company cash is
on deposit, shall be recorded in the accounting records of the
Company.
II. CONFLICT OF INTEREST GUIDELINES
A. GENERAL STATEMENT
Individual employees of the Company will not engage in, or
tolerate in others, any activity or interest which is
inconsistent with the best interests of the Company and
ethical business conduct. This also means that each employee
of the Company will do his or her best to avoid the mere
appearance of conflict or wrongdoing.
It is impossible to cover every conflict of interest situation
and, at times, it may not be easy to distinguish between
proper and improper activity. The following, although not
considered to be all-inclusive, is intended to serve as a
guide to the types of situations or activities that might
cause a conflict of interest and which signal the need to ask
the advice of the employee's supervisor.
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B. FINANCIAL AND BUSINESS RELATIONSHIPS
Other than what is required as a matter of employment, no
director, officer or employee, or the immediate family
members, shall be directly or indirectly employed by, solicit
and/or receive commission, payment or benefit from or have any
material ownership interest in or any significant relationship
with any organization with which the Company does business or
provides business, including, for example, competitors,
customers, suppliers, agents or consultants, unless disclosed
and approved by the President and Chief Executive Officer or
his designee.
An employee shall not knowingly, directly or indirectly, buy,
sell, or lease property rights or interests from or to the
Company or near locations of current or probable interest to
the Company without prior full and appropriate disclosure to
the President and Chief Executive Officer of the Company or
his designee.
C. INSIDER TRADING
Because the Company is a reporting company under the
Securities Exchange Act of 1934, the officers and directors of
the Company have a number of important responsibilities under
the federal securities laws. Further, the Company has a
responsibility to take reasonable steps to ensure that the
officers, directors and employees of the Company are not
engaging in improper insider trading.
The Company's Section 16 and its Insider Trading Policies
provide that no employee of the Company or member of his or
her immediate family sharing the same household shall directly
or indirectly purchase or sell any securities of the Company
while he or she is in possession of material non-public
information affecting the Company. Also, employees may not
"tip" others about important information regarding the
Company, and in general should keep Company information
confidential. Failure to comply with the Policies could result
in disciplinary action by the Company and severe criminal and
civil penalties.
D. FAIR COMPETITION
The Company will comply with the antitrust laws in the
jurisdictions where it transacts business. It is impractical
to attempt to summarize all such laws because they are
far-reaching and extremely complicated. However, each employee
is charged with avoiding the violation of, or the appearance
of having violated, these laws. In every transaction in which
an employee is involved, he or she must give consideration to
the possibility of antitrust implications. If in doubt, the
employee should
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discuss the matter with his or her supervisor. An employee
should not bear the burden and risk of possible civil or
criminal antitrust violations.
In general, agreements and arrangements which eliminate or
substantially lessen competition must be avoided, and
agreements with a competitor are particularly suspect. For
example, concerted activities with competitors which affect
prices (or any component thereof), or which limit marketing
areas, products offered, volume of production, sources of
supply or customers or channels of distribution are extremely
dangerous and usually illegal. There are other sensitive
antitrust areas which should raise a "red flag" in the
employee's mind. These include: exchanges of price
information; exclusive dealing arrangements and conditioning
the sale of one product on the purchase of another (tie-ins);
reciprocal dealing; group boycotts; discrimination in prices,
services or facilities; and other unfair methods of
competition.
III. RESPONSIBILITY FOR COMPLIANCE
A. EMPLOYEE COMPLIANCE
There is both a Company and an individual obligation to
fulfill the intent of this Policy. It is not expected that
every employee, manager or officer will be fully versed in the
law affecting his or her responsibilities. However, it is
expected that every employee will have a working knowledge of
permissible activities and will seek guidance from his or her
supervisor or higher level manager concerning any matter on
which there is a question and upon discovery of events of a
questionable, fraudulent or illegal nature.
B. MANAGEMENT COMPLIANCE
It is the responsibility of all managers to ensure their
organization's familiarity and compliance with this Policy,
including the prompt reporting of violations and conflicts.
C. COMPANY COMPLIANCE
The following steps shall be summarized by the President and
Chief Executive Officer and reported annually to the
Nominating and Corporate Governance Committee of the Board of
Directors.
1. Annual Communications - Annual communication will be
made to all the Company employees to maintain current
familiarity with this Policy. The communication may
be in the form of the Policy or in the form of a memo
summarizing the Policy, and may be distributed
directly to each employee or posted on Company
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bulletin boards, as management deems appropriate.
Internationally, each country or territory manager
shall propose communication procedures to the
President and Chief Executive Officer for his
approval.
2. Annual Confirmation Letters - Each year, all officers
and certain other employees designated by the
President and Chief Executive Officer of the Company,
shall be required to sign a statement (Exhibit A)
that they have read, communicated, and complied with
this Business Ethics Policy.
D. PENALTIES
In addition to penalties which may be imposed by the U.S.
government, any violation of applicable laws, recognized
ethical business standards, or this Policy will subject an
employee to disciplinary action up to and including immediate
termination. Disciplinary action will also apply to any
manager who directs or approves violations or has knowledge of
them and does not take appropriate actions in accordance with
this Policy.
IV. SUMMARY
This Business Ethics Policy has been adopted to remind employees of
their ethical and legal responsibilities and to provide guidance for
complying with these responsibilities. If situations arise in which the
proper course of action is not clear or whenever employees have a
question regarding the propriety of a particular course of action or
the interpretation of this Policy, employees should consult with their
supervisor or a higher level manager for advice.
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