ANNEX F
TONGXIN INTERNATIONAL LTD.
CODE OF CONDUCT AND POLICY
REGARDING REPORTING OF POSSIBLE VIOLATIONS
Tongxin International Ltd. (the "Company") is committed to being a good
corporate citizen. The Company's policy is to conduct its business affairs
honestly and in an ethical manner. This Code of Conduct ("Code") provides a
general statement of the expectations of the Company regarding the ethical
standards that each director, officer and employee should adhere to while acting
on behalf of the Company. It does not cover every issue that may arise, but it
sets out basic principles to guide all employees, officers and directors of the
Company. All of our employees, officers and directors must conduct themselves
accordingly and seek to avoid even the appearance of improper behavior. This
Code of Conduct applies to all officers, full and part time employees, contract
workers, directors and anyone who conducts business with the Company. Conduct in
violation of this policy is unacceptable in the workplace and in any
work-related setting outside the workplace. Any employee or contract worker who
violates this Code will be subject to disciplinary action, up to and including
termination of his/her employment or engagement.
Compliance with Laws
You must comply with all federal, state and local laws applicable
to your activities on behalf of the Company and shall perform your duties to the
Company in an honest and ethical manner. If a law conflicts with a policy in
this Code, you must comply with the law; however, if a local custom or policy
conflicts with this Code, you must comply with the Code. If you have any
questions about these conflicts, you should ask your supervisor or the General
Counsel's office how to handle the situation.
Conflicts of Interest
You should avoid situations in which your personal, family or financial
interests conflict or even appear to conflict with those of the Company or
compromise its interests. You should handle all actual or apparent conflicts of
interest between your personal and professional relationships in an honest and
ethical manner. Conflicts are not always clear-cut. Examples of actual or
potential conflicts of interest are set forth on Appendix A. A "conflict of
interest" exists when a person's private interest interferes in any way with the
interests of the Company. A conflict situation can arise when an employee,
officer or director takes action or has interests that may make it difficult to
perform his or her Company work objectively and effectively. Conflicts of
interest may also arise when an employee, officer or director, or a member of
his or her family receives improper personal benefits as a result of his or her
position in the Company. Loans to, or guarantees of obligations of, employees
and their family members may create conflicts of interest.
It is almost always a conflict of interest for a Company employee to work
simultaneously for a competitor, customer or
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 the Company's behalf. In
addition, employees, officers and directors are prohibited from taking for
themselves personally any opportunities that are discovered through the use of
corporate property, information or position, except with the consent of the
Board of Directors. Employees, officers and directors owe a duty to the Company
to advance its legitimate interests when the opportunity to do so arises. If you
become aware of a conflict or potential conflict of interest, contact your own
or any other Company supervisor for further guidance.
Disclosure
It is of paramount importance to the Company that all disclosure in documents
filed by the Company with the Securities and Exchange Commission or in other
public communications by the Company is full, fair, accurate, timely and
understandable. All officers, directors, employees and contract workers must
take all steps necessary to assist the Company in fulfilling these
responsibilities, consistent with each person's role in the Company. You should
give prompt, accurate answers to all inquiries in connection with the Company's
preparation of public disclosures and reports.
Code of Ethics for Senior Officers
The Company's Chief Executive Officer, the Chief Financial Officer and the
Controller (the "Senior Officers") each bear
a special responsibility for promoting integrity throughout the Company.
Furthermore, the Senior Officers have a responsibility to foster a culture
throughout the Company as a whole that ensures the fair and timely reporting of
the Company's results of operation and financial condition and other financial
information.
Because of this special role, the Senior Officers are bound by the following
Senior Officer Code of Ethics, and each agrees that he or she will:
- - Perform his or her duties in an honest and ethical manner.
- - Handle all actual or apparent conflicts of interest between his or her
personal and professional relationships in an ethical manner.
- - Take all necessary actions to ensure full, fair, accurate, timely, and
understandable disclosure in reports and documents that the Company files
with, or submits to, government agencies and in other public
communications.
- - Company with all applicable laws, rules and regulations of federal, state
and local governments.
- - Proactively promote and be an example of ethical behavior in the work
environment.
Reporting and Compliance
If you become aware of conduct by an officer, director, employee
or contract worker which you believe in good faith is a potential violation of
this Code of Conduct, you should notify you're own or any other Company
supervisor, the Chief Executive Officer, the General Counsel or the Chief
Financial Officer as soon as possible. You should also report any complaint or
concern regarding the Company's accounting, internal accounting controls, or
auditing matters, or any concerns regarding questionable accounting or auditing
matters. Supervisors are required to refer all reports of possible violations to
the Chief Executive Officer, the General Counsel, the Chief Financial Officer or
the Chair of the Audit Committee.
Alternatively, if you wish to report such matters anonymously, you may mail a
description of the concern or complaint to the attention of the General Counsel,
the Chief Financial Officer or the Chair of the Audit Committee, at the
following address:
199 Pierce Street, Suite 202
Birmingham, MI 48009
Persons outside the Company may also report complaints or concerns the Company
personnel; such matters should be reported promptly on receipt to your own or
any other Company supervisor, the Chief Executive Officer, the General Counsel,
the Chief Financial Officer, or the Audit Committee Chair. Supervisors are
required to report such matters as noted above.
All reports of complaints or concerns shall be recorded in a log, indicating the
description of the matter reported, the date of the report and a brief summary
of the disposition. The log shall be maintained by the General Counsel and shall
be reviewed
periodically with the Audit Committee. This log shall be retained for five
years.
Allegations of violations of the Code should be made only in good faith and not
to embarrass or put someone in a false light. If you become aware of a suspected
or potential violation don't try to investigate or resolve it on your own.
Prompt disclosure under this Code is vital to ensuring a timely and thorough
investigation and resolution. You are expected to cooperate in internal or
external investigations or alleged violations of the Code.
In response to every report made in good faith of conduct potentially in
violation of the Code of Conduct, the Company will undertake an effective and
thorough investigation, and if improper conduct is found, the Company will take
appropriate disciplinary and remedial action. Compliance procedures are set
forth in Appendix B to this Code. The Company will attempt to keep its
discussions with any person reporting a violation confidential to the extent
reasonably possible without compromising the effectiveness of the investigation.
If you believe your report is not properly explained or resolved, you may take
your concern or complaint to the Audit Committee of the Board of Directors.
Employees and contract workers are protected by law from retaliation for
reporting possible violations of this Code of Conduct or for participating in
procedures connected with an investigation, proceeding or hearing conducted by
the Company or a government agency with respect to such complaints. The Company
will take disciplinary action up to and including the mmediate termination of
any employee or contract worker who
retaliates against another employee or contract worker for reporting any of
these alleged activities.
Further Information
Please contact the Chief Executive Officer, the General Counsel or the Chief
Financial Officer if you have any questions about this Code or require further
information.
The most current version of this Code will be posted on the Company's website
and filed as an exhibit to the Company's Annual Report on Form 10-K. Any
substantive amendment or waiver of this Code may be made only by the Board of
Directors upon a recommendation of the Audit Committee, and will be disclosed,
including the reasons for such action, on the Company's website and by a filing
with the Securities and Exchange Commission on Form 8-K within four days of such
action. The Company will maintain disclosure about such amendment or waiver on
the website for at least twelve months and shall retain the disclosure
concerning the action for at least 5 years.
APPENDIX A
The following are examples of actual or potential conflicts:
- - you, or a member of your family, receive improper personal benefits as a
result of your position in the Company;
- - you use Company's property for your personal benefit;
- - you engage in activities that interfere with your loyalty to the Company
- - or your ability to perform Company duties or responsibilities effectively;
- - you, or a member of your family, have a financial interest in a customer,
supplier, or competitor which is significant enough to cause divided
loyalty with the Company or the appearance of divided loyalty (the
significance of a financial interest depends on many factors, such as size
of investment in relation to your income, net worth and/or financial needs,
your potential to influence decisions that could impact your interests, and
the nature of the business or level of competition between the Company and
the supplier, customer or competitor);
- - you, or a member of your family, acquire an interest in property (such as
real estate, patent or other intellectual property rights or securities) in
which you have reason to know the Company has, or might have, a legitimate
interest;
- - you, or a member of your family, receive a loan or a guarantee of a loan
from a customer, supplier or competitor (other than a loan from a financial
institution made in the ordinary course of business and on an arm's-length
basis);
- - you divulge or use the Company's confidential
information - such as financial data, customer information, or computer
programs - for your own personal or business purposes;
- - you make gifts or payments, or provide special favors, to customers,
suppliers or competitors (or their immediate family members) with a value
significant enough to cause the customer, supplier or competitor to make a
purchase, or take or forego other action, which is beneficial to the
Company and which the customer, supplier or competitor would not otherwise
have taken; or
- - you are given the right to buy stock in other companies or you receive cash
or other payments in return for promoting the services of an advisor, such
as an investment banker, to the Company.
APPENDIX B
COMPLIANCE PROCEDURES
- - Compliance Officer. The Corporate Compliance Officer is the General
Counsel, or in the absence of such person, the Chief Financial Officer. The
Compliance Officer's responsibility is to ensure communication, training,
monitoring, and overall compliance with the Code. The Compliance Officer
will, with the assistance and cooperation of the Company's officers,
directors and managers, foster an atmosphere where employees are
comfortable in communicating and reporting concerns
and possible Code violations.
- - Access to the Code. The Company shall ensure that employees, officers and
directors may access the Code on the Company's website. New employees will
receive a copy of the Code as part of their new hire information.
- - Monitoring. Managers are the "go to" persons for employee questions and
concerns relating to the Code. Managers or supervisors will immediately
report any violations or allegations of violations to the Compliance
Officer. Managers will work with the Compliance Officer in assessing areas
of concern, potential violations, any needs for enhancement of the Code or
remedial actions to affect the Code's policies and overall compliance with
the Code and other related policies.
- - Internal Investigation. When an alleged violation of the Code is reported,
the Company shall take prompt and appropriate action in accordance with the
law and regulations and otherwise consistent with good business practice.
If the suspected violation appears to involve either a possible violation
of law or an issue of significant corporate interest, or if the report
involves a complaint or concern of any person, whether employee, a
stockholder or other interested person regarding the Company's financia
disclosure, internal accounting controls, questionable auditing or
accounting matters or practices or other
issues relating to the Company's accounting or auditing, then the manager
or investigator should immediately notify the Compliance Officer, who, in
turn, shall notify the Chair of the Audit Committee. If a suspected
violation involves any director or executive officer or if the suspected
violation concerns any fraud, whether or not material, involving management
or other employees who have a significant role in the Company's internal
controls, any person who received such report should immediately report the
alleged violation to the Compliance Officer and, in every such case, the
Chair of the Audit Committee. The Compliance Officer or the Chair of the
Audit Committee, as applicable, shall assess the situation and determine
the appropriate course of action,including the conduct of an investigation
as appropriate.
- - Disciplinary Actions. Subject to the following sentence, the Compliance
Officer, after consultation with the Vice President of Human
Resources,shall be responsible for implementing the appropriate
disciplinary action in accordance with the Company's policies and
procedures for any employee who is found to have violated the Code? If a
violation has been reported to the Audit Committee or another committee of
the Board, that Committee shall be responsible for determining appropriate
disciplinary action. Any violation of applicable law or any deviation from
the standards embodied in this Code will result in disciplinary action, up
to and including termination of employment. In addition to imposing
discipline upon employees involved in non-compliant conduct, the Company
also will impose discipline, as appropriate,upon an employee's
supervisor, if any, who directs or approves such employees' improper
actions, or is aware of those actions but does not act appropriately to
correct them,and upon other individuals who fail to report known
non-compliant conduct. In addition toimposing its own discipline, the
Company will bring any violations of law to the attention of appropriate
law enforcement personnel.
- - Retention of Reports and Complaints. All reports and complaints made to or
received by the Compliance Officer or the Chair of the Audit Committee
relating to violations of this Code shall be logged into a record
maintained for this purpose by the Compliance Officer and this record of
such report shall be retained for five years.
- - Required Government Reporting. Whenever conduct occurs that requires a
report to the government, the Compliance Officer shall be responsible for
complying with such reporting requirements.
- - Corrective Actions. Subject to the following sentence, in the event of a
violation of the Code, the manager and the Compliance Officer should assess
the situation to determine whether the violation demonstrates a problem
that requires remedial action as to Company policies and procedures. If a
violation has been reported to the Audit Committee or another committee of
the Board, that committee shall be responsible for determining appropriate
remedial or corrective actions. Such corrective action may include
providing revised public disclosure, retraining Company employees,
modifying Company policies and procedures, improving monitoring of
compliance under existing procedures and other action necessary to detect
similar non-compliant conduct and prevent it from occurring in the future.
Such corrective action shall be documented, as appropriate.