Exhibit 14.1
FUEL TECH, INC.
CODE OF BUSINESS ETHICS AND CONDUCT
AS AMENDED SEPTEMBER 30, 2006
TABLE OF CONTENTS
Page
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Foreword 2
Introduction and Persons Subject to Code 3
Enforcement of the Code 3
Compliance with Laws and Regulations 4
Fraudulent Conduct 4
Conflicts of Interest 5
Proper Recording of Funds, Assets, Receipts
and Disbursements 6
Improper Influence on Audits 6
Proper Disclosure to the Public and SEC 6
Reports of Counsel to Qualified Legal Compliance Committee 6
Obstruction of Justice 7
Insider Trading 7
Commercial Bribery 8
Political Contributions 9
Payments to Foreign Government Officials 9
Employee Relations 10
Unlawful Harassment 10
Antitrust Compliance 10
Environment and Safety 11
FOREWORD
A major factor in the growth and success of Fuel Tech, Inc. and its
subsidiaries (the "Company") is the standard of personal and professional
integrity with which its personnel conduct themselves. The Company's Board of
Managing Directors has adopted and amended this Code of Business Ethics and
Conduct (the "Code") to assist its directors, officers and employees in
understanding the principles of conduct that must be adhered to in order to
fulfill the legal and ethical obligations each assumes on association with the
Company. Persons subject to this Code may be requested periodically to affirm in
writing that they have adhered to the principles of the Code.
On Behalf of the Board of Managing Directors
Ralph E. Bailey
Executive Chairman of the Board
September 30, 2006
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INTRODUCTION AND PERSONS SUBJECT TO THE CODE
The purpose of this Code of Ethics and Business Conduct (the "Code) is
to state the principles of business ethics and conduct that the Board of
Managing Directors (the "Board") of Fuel Tech, Inc. and its subsidiaries (the
"Company") expects to be followed by all directors, officers and employees of
the Company (collectively referred to in the Code as the Company's
"Associates"). Each of the Company's directors, officers and employees are
subject to the applicable provisions of the Code. The Code provides general
principles and specific guidelines applicable to business conduct.
These principles and guidelines are to be strictly adhered to at all
times and under all circumstances. Any employee who does not adhere to this Code
is acting outside the scope of his or her employment. Action in violation of the
Code will be subject to Company discipline up to and including dismissal.
Additionally conduct not in compliance with the Code may constitute a violation
of criminal laws.
Any Associate who, as part of his or her job responsibilities with the
Company, serves as a director or officer of another company in which the Company
has an interest is expected to cast votes, exert influence and otherwise conduct
activities in a manner that will promote the observance of these principles and
guidelines. Also, the choice of the Company's contractors will be guided by
their ability to comply with these principles and guidelines.
The Board will continue to supervise compliance with the Code to assure
that the Company's business is conducted in a manner consistent with its
obligations to its shareholders and the public. It is the responsibility of all
levels of the Company's management to monitor compliance with the Code, to
suggest appropriate revisions which may be required from time to time, and to
ensure that all employees and contractors are aware of the provisions of the
Code.
ENFORCEMENT OF THE CODE
Violations of the Code will result in discipline and sanctions up to
and including dismissal.
Instances of conduct prohibited by the Code should be reported to the
Human Resources Manager of the Company, or a supervisor, or an officer of the
Company, and, particularly when the conduct involves a director or an officer of
the Company or matters concerning the integrity of the Company's books and
records, the Audit Committee of the Board.
Questions regarding the legality of a proposed action should be
referred to the Company's legal counsel for consideration. An appropriate
officer of the Company, after consultation with legal counsel, should resolve
all questions or refer them to higher authority in the Company, including the
Audit Committee. Waivers of the provisions of the Code shall be granted by the
Chief Executive Officer with the approval of the Audit Committee of the Board,
or, in cases involving the Chief Executive Officer waivers shall be granted by
the Audit Committee.
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Reports by legal counsel employed or retained by the Company of
material violations of the Code should be referred simultaneously to the Chief
Executive Officer and to the independent members of the Audit Committee, which
is the Company's Qualified Legal Compliance Committee.
COMPLIANCE WITH LAWS AND REGULATIONS
THE COMPANY IS COMMITTED TO BEING A GOOD CORPORATE CITIZEN OF ALL
STATES AND COUNTRIES IN WHICH IT DOES BUSINESS. BECAUSE OF THIS COMMITMENT, IT
IS THE POLICY OF THE COMPANY TO COMPLY IN ALL RESPECTS WITH ALL LAWS AND
REGULATIONS THAT ARE APPLICABLE TO ITS BUSINESS AT ALL GOVERNMENTAL LEVELS IN
THE UNITED STATES AND ABROAD.
The Code in some cases deals with specific laws and regulations and
outlines general guidelines for compliance because of their particular
importance to the Company's business activities. It should be understood,
however, that the special emphasis on these laws and regulations does not limit
the general admonition to comply with all applicable laws and regulations.
Ethical business conduct should normally exist at a level well above minimum
legal requirements. The Company expects its Associates to deal fairly with all
persons with whom the Company does business and to maintain the Company's
reputation for integrity.
The laws and regulations of the states and countries in which the
Company does business form the framework around which its operations are built.
Compliance in all respects with both the spirit and the letter of those laws
will best serve the interests of the Company, its Associates and its
shareholders.
A company doing business on an international basis may encounter laws
and customs applicable in one country that conflict with those of another
country. For example, the laws of one country may encourage or even require
business practices not permitted in the United States. Associates must be
careful to conduct themselves in strict accordance with applicable laws of the
countries in which the Company operates.
Associates should make the Company's legal compliance policy known to
all agents and contractors of the Company and inform such persons that the
Company expects them likewise to adhere to this policy. The ability to comply
will be an important consideration in choosing contractors.
FRAUDULENT CONDUCT
THE COMPANY EXPECTS ITS ASSOCIATES TO CONDUCT THEMSELVES IN THEIR
BUSINESS DEALINGS IN AN HONEST AND NON-FRAUDULENT MANNER. LIKEWISE, THE COMPANY
EXPECTS ITS ASSOCIATES TO DEAL HONESTLY WITH ALL GOVERNMENTAL ENTITIES.
The Company's interests are never furthered by fraudulent dealings. In
this regard, the Company demands that all its Associates deal honestly with all
persons with whom the Company does business. Under no circumstances will any
Associate willfully file or condone or solicit the filing of any materially
false, fictitious or fraudulent claim, report or information with any person or
governmental entity under any circumstances. Nor will fraudulent actions by the
agents or contractors of the Company be condoned under any circumstances.
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CONFLICTS OF INTEREST
ALL ASSOCIATES OF THE COMPANY ARE EXPECTED TO AVOID ANY ACTIVITY THAT
MAY INTERFERE, OR HAVE THE APPEARANCE OF INTERFERING WITH THE PERFORMANCE OF
THEIR RESPONSIBILITIES TO THE COMPANY.
It is not feasible to specify all activities that may give rise to a
conflict of interest; however, such conflicts will generally occur within the
areas of:
- Transactions with the Company
- Business relationships with vendors, competitors, etc.
- Business gifts
- Unsecured indebtedness to the Company
- Transactions with promoters, consultants, etc.
The following will serve as a guide to the circumstances or types of
activities that could cause conflicts and should, therefore, be fully reported
to the Company:
1. Ownership by an Associate or a close relative of a two percent or
more financial interest in any enterprise that does business with or is a
competitor of the Company.
2. Participation in any outside activity that competes directly or
indirectly with the Company or that interferes or has the appearance of
interfering with the performance of the Associate's duties with the
Company.
3. Serving as a director, consultant, employee or agent of an
enterprise that conducts or seeks to conduct business with the Company.
4. Acceptance by an Associate or a close relative of gifts of a size
that may tend to influence business decisions or compromise independent
judgment or the giving of such gifts to personnel of other companies with
which the Company does business.
5. Disclosure or use by an Associate of information that is
confidential, proprietary or privileged, for the benefit of an Associate
or of any other person.
In the event an Associate senses possible involvement in a conflict of
interest, the Associate should immediately report the matter to his or her
supervisor or, in the case of a director or officer of the Company, to the Chief
Executive Officer, and where involving the Chief Executive Officer, the Audit
Committee of the Board, making a full disclosure of all pertinent circumstances.
Because each case may involve special circumstances, it will be judged on its
own merits.
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PROPER RECORDING OF FUNDS, ASSETS, RECEIPTS AND DISBURSEMENTS
ALL FUNDS, ASSETS, RECEIPTS AND DISBURSEMENTS OF THE COMPANY SHALL BE
PROPERLY RECORDED ON THE BOOKS OF THE COMPANY.
To assure that this policy is implemented, the following is
specifically required:
1. No funds or accounts shall be established or maintained for purposes
that are not fully and accurately reflected on the books and records of
the Company.
2. No funds or other assets shall be received, disbursed, transferred
or disposed of without being fully and accurately reflected on the books
and records of the Company.
3. No false, fictitious or intentionally misleading entries shall be
made on the books or records of the Company and no false or misleading
reports pertaining to the Company or its operations shall be issued.
IMPROPER INFLUENCE ON AUDITS
NO ASSOCIATE OF THE COMPANY MAY TAKE ANY ACTION, OR CAUSE ANY OTHER
PERSON, TO FRAUDULENTLY COERCE, MANIPULATE OR MISLEAD THE COMPANY'S INDEPENDENT
AUDITORS ENGAGED IN THE PERFORMANCE OF AN AUDIT OF THE COMPANY'S FINANCIAL
STATEMENTS.
The Company's audited financial statements are relied upon by the
public, the Company's shareholders and government authorities. Interfering with
an audit may cause the financial statements to be materially misleading leading
to serious consequences for the Company. In all dealings with auditors
cooperation is required. Auditors' reasonable and responsible requests for
information shall be responded to fully and promptly.
PROPER DISCLOSURE TO THE PUBLIC AND SEC
ASSOCIATES RESPONSIBLE FOR PREPARING OR APPROVING ANNUAL AND QUARTERLY
REPORTS TO THE PUBLIC AND THE SEC, AS WELL AS PRESS RELEASES OF COMPANY
DEVELOPMENTS, SHALL, TO THE BEST OF THEIR KNOWLEDGE, TAKE CARE THAT SUCH
DOCUMENTS DO NOT CONTAIN ANY UNTRUE STATEMENTS OF MATERIAL FACTS OR OMIT TO
STATE MATERIAL FACTS REQUIRED SO THAT THE SAME SHALL NOT BE MISLEADING.
The Company's reports and releases are relied upon by the public,
shareholders and government authorities to present a fair picture of the
Company. Such reports and releases shall accurately describe the Company's
operations and finances to the extent relevant and material. Failure to do so
may have serious consequences for the Company.
REPORTS OF COUNSEL TO QUALIFIED LEGAL COMPLIANCE COMMITTEE
LEGAL COUNSEL EMPLOYED OR ENGAGED BY THE COMPANY AND PRACTICING BEFORE
THE SECURITIES AND EXCHANGE COMMISSION SHALL REPORT TO THE COMPANY'S QUALIFIED
LEGAL COMPLIANCE COMMITTEE, WHERE APPLICABLE, INSTANCES OF MATERIAL VIOLATIONS
OF THE SECURITIES LAWS, BREACHES OF FIDUCIARY DUTY OR SIMILAR MATERIAL
VIOLATIONS.
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The independent members of the Company's Audit Committee of the Board
have been constituted as the Company's Qualified Legal Compliance Committee (the
"QLCC"). Legal Counsel, whether in the Company's employ as "inside counsel" or
retained by the Company as "outside counsel," and, under Securities and Exchange
Commission rules, "appearing and practicing before the Commission" is required
to report "material violations," as defined in SEC rules, to the QLCC. The
Company believes such violations to be also violations of this Code.
Accordingly, where such counsel believes that there is credible evidence that
makes it unreasonable for a prudent and competent attorney not to conclude that
a material violation is reasonably likely, counsel shall report the likelihood
of that violation simultaneously to the Chief Executive Officer and to the QLCC.
OBSTRUCTION OF JUSTICE
ASSOCIATES OF THE COMPANY MUST CONDUCT THEMSELVES SO THAT THEY DO NOT
IN THE COURSE OF PROVIDING SERVICES TO THE COMPANY INTERFERE WITH, HINDER OR
OBSTRUCT THE OPERATION OF ANY JUDICIAL OR OTHER GOVERNMENTAL SYSTEM.
The Company recognizes that a properly functioning justice system is an
essential element in a free society and necessary to the promotion of business
activity. Attempts to hide evidence, convince witnesses to change testimony or
other attempts to prevent or tamper with the proper investigation and
prosecution of violations of law will not be tolerated. Associates should, for
example, never attempt to shred or otherwise dispose of records in the face of
an investigation or when circumstances suggest that an investigation is likely.
INSIDER TRADING
"INSIDER TRADING" IS TRADING IN COMPANY STOCK BASED ON MATERIAL
NON-PUBLIC INFORMATION OR COMMUNICATING MATERIAL NON-PUBLIC INFORMATION TO
OTHERS IN VIOLATION OF THE LAW. THE COMPANY EXPRESSLY PROHIBITS "INSIDER
TRADING."
The term "insider" includes not only directors, officers, 10%
shareholders, or employees of the Company but may also include immediate family
members who reside with the insider or persons for whom the insider has a
financial responsibility.
Material information is generally defined as information for which
there is a substantial likelihood that a reasonable investor would consider it
important in making his or her investment decisions. Material information is
also information that, if disclosed, is reasonably certain to have a substantial
effect on the price of a Company's securities. Material information includes,
but is not limited to, earnings estimates, changes in previously released
earnings estimates, significant merger or acquisition proposals, major
litigation, extraordinary management developments, and dividend changes.
Information is non-public until it has been communicated to the
marketplace.
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This policy prohibits trading by any insider while he or she is in
possession of material non-public information. Additionally, this policy
prohibits trading by a non-insider while he or she is in possession of material
non-public information. Any of these activities is also a possible violation of
federal securities laws. Legal penalties for trading on or communicating
material non-public information are severe. These penalties apply to both the
individuals involved in the insider trading and to their employers. A person can
be subject to penalties even if he or she did not personally benefit from the
violation. Penalties include fines, jail sentences, and disgorgement of profits.
Except when a "Don't Trade" memorandum has been circulated by the
Company objecting to trading by Associates, all Associates may without objection
by the Company as provided in the Employee Handbook, purchase or sell shares of
Company stock during a "window period" following a Company earnings release. The
period begins with the opening of business on the third business day following
the release and ends on the close of business on the last business day of the
following quarterly period.
Associates, moreover, may not purchase and sell or sell and purchase
shares of Company stock within any period of less than six months.
COMMERCIAL BRIBERY
NO FUNDS OR ASSETS OF THE COMPANY SHALL BE PAID, LOANED OR OTHERWISE
DISBURSED AS BRIBES, KICKBACKS OR OTHER PAYMENTS DESIGNED TO IMPROPERLY
INFLUENCE OR COMPROMISE THE CONDUCT OF THE RECIPIENT, AND NO ASSOCIATE OF THE
COMPANY SHALL ACCEPT ANY FUNDS OR OTHER ASSETS FOR ASSISTING IN OBTAINING
BUSINESS OR FOR SECURING SPECIAL CONCESSIONS FROM THE COMPANY FOR ANY OTHER
PERSON OR LEGAL ENTITY.
The Company considers one of its most valuable assets to be its
reputation for integrity. The Company seeks stable and profitable business
relationships - - based on integrity - - with customers, suppliers and all
others whose activities touch upon its own. To that end, the Company's
Associates and agents and contractors should conduct their business affairs in
such an ethical way that the Company's reputation will not be impugned in the
event the full details of their dealings become a matter of public discussion.
By way of illustrating the strict ethical standard that every
Associate, agent and contractor of the Company is expected to maintain, the
following conduct is expressly prohibited:
1. Payment or receipt of money, gifts, loans or other favors that may
tend to improperly influence business decisions or compromise independent
judgment.
2. Payment or receipt of rebates or kickbacks for obtaining business
for the Company.
3. Payment of bribes to government officials, such as tax authorities,
to obtain favorable rulings on issues of local law.
4. Other activities that, though not mentioned here, would similarly
degrade the Company's reputation for integrity are prohibited.
These guidelines are not intended to prevent the Company from paying
normal and reasonable commissions to its agents, from taking normal prompt
payment discounts, and also from giving or receiving gifts or services that are
normal and customary social amenities and that do not tend to compromise the
conduct of the recipient.
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POLITICAL CONTRIBUTIONS
NO FUNDS OR ASSETS OF THE COMPANY SHALL BE CONTRIBUTED TO ANY POLITICAL
PARTY OR ORGANIZATION, OR TO ANY INDIVIDUAL WHO EITHER HOLDS PUBLIC OFFICE OR IS
A CANDIDATE FOR PUBLIC OFFICE.
The laws of certain countries restrict or prohibit political
contributions by corporate entities. For example, the United Sates Federal
Campaign Act of 1971, as amended, prohibits the contribution of corporate funds
to candidates for federal office or committees formed to support such candidates
or advocate other political causes. The Company shall comply strictly with
applicable laws governing political contributions by corporate entities.
The following are examples of political activities that are prohibited
by these laws and by the policy of the Company:
1. Contributions by an employee that are reimbursed through expense
accounts or in other ways.
2. Use of Company funds to attend receptions, dinners or other
fund-raising events for political candidates.
3. Contributions in kind, such as the loaning of employees to political
parties, or the use of Company property in political campaigns.
The Company's policy is not intended to discourage or to prevent any
employee from engaging in political activities in an individual capacity on his
or her own time and at his or her own expense, or from making political
contributions from personal funds. This policy does not discourage or prevent
any Associate form expressing personal views with respect to legislative or
political matters or making lawful voluntary political contributions.
PAYMENTS TO FOREIGN GOVERNMENTAL OFFICIALS
NO COMPANY ASSOCIATE HAS THE AUTHORITY TO OFFER OR MAKE PAYMENTS TO A
FOREIGN OFFICIAL TO INDUCE THAT OFFICIAL TO AFFECT ANY GOVERNMENTAL ACT OR
DECISION IN A MANNER THAT WILL ASSIST THE COMPANY TO OBTAIN OR RETAIN BUSINESS
OR TO SECURE ANY IMPROPER ADVANTAGE.
The Foreign Corrupt Practices Act ("FCPA") prohibits payments to
foreign officials that are made or even offered corruptly. Corrupt payments for
purposes of the FCPA are payments intended to induce a foreign official to
misuse his or her official position or to fail to perform an official function.
Payments include gifts of substantial value, lavish entertainment, and loans.
The prohibited payment could also be made to obtain or retain business for the
Company. It could also be made to obtain legislation, regulations, or rulings to
benefit the Company's business or to obtain, in general, any "improper
advantage" for the Company.
The corrupt payment must be made to a foreign official. A foreign
official for purposes of the FCPA is an officer or an employee of a foreign
government or department, agency, or instrumentality thereof, or any person
acting in an official capacity for or on behalf of such government department,
agency, or instrumentality. Officers of state owned and operated enterprises
generally would be regarded as within the purview of the FCPA. The term "foreign
official" also includes political party officials and candidates for political
office. The FCPA likewise prohibits corrupt payments to any person who is not a
foreign official if it is known that all or a part of the payment will be
offered or paid to a foreign official.
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Payments to attorneys, consultants, advisors, suppliers, and customers
of the Company, violate the FCPA if made while knowing that all or a portion of
such payments will be offered, given, or promised to a foreign official for any
of the prohibited purposes stated above.
Certain types of payments are not covered by the FCPA. So-called
"grease" or "facilitating" payments - payments made to secure or expedite the
performance of routine government actions - typically are not prohibited by the
FCPA. This exception is, however, very narrow and Associates must consult with
Company counsel before considering making such a payment.
EMPLOYEE RELATIONS
IT IS THE COMPANY'S POLICY AND PRACTICE NOT TO DISCRIMINATE AGAINST ANY
EMPLOYEE OR APPLICANT BECAUSE OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX,
AGE, SEXUAL ORIENTATION, AND PHYSICAL OR MENTAL DISABILITY.
The Company desires to create a challenging and supportive environment
where individual contributions and teamwork are highly valued. In order to
establish this environment, the Company seeks for qualified applicants and
expects all employees to be responsible for supporting the Company's equal
opportunity employment policy.
UNLAWFUL HARRASSMENT
THE COMPANY'S POLICY IS THAT ALL EMPLOYEES WORK IN AN ENVIRONMENT FREE
FROM UNWELCOME HARASSMENT BY MANAGERS, EMPLOYEES OR NON-EMPLOYEE THIRD PARTIES
SUCH AS VENDORS, VISITORS, OR GUESTS OF THE COMPANY.
The Company's policy prohibits sexual harassment and harassment because
of race, color, national origin, ancestry, religion, creed, physical or mental
disability, unfavorable discharge from military service, learning disability,
present or past history of mental disorder, AIDS status, marital status, medical
condition, sexual orientation, age, or any other basis protected by federal,
state or local law.
ANTITRUST COMPLIANCE
THE COMPANY'S POLICY IS TO COMPLY STRICTLY WITH APPLICABLE ANTITRUST
LAWS DOMESTICALLY AND ABROAD. ASSOCIATES OF THE COMPANY MUST AVOID ANY CONDUCT
WHICH MAY BE CONSTRUED AS A VIOLATION OF ANTITRUST LAWS.
In the United States there are four federal statutes basic to the
federal antitrust legal system - the Sherman Act, the Clayton Act, the
Robinson-Patman Act and the Federal Trade Commission Act. The Sherman Act of
1890 prohibits contracts, combinations, or conspiracies in restraint of trade or
commerce; it also prohibits monopolization or attempts to monopolize any part of
trade or commerce. The Clayton Act of 1914 prohibits exclusive dealing
arrangements and certain mergers and acquisitions and forbids individuals in
certain circumstances from serving simultaneously on the boards of directors of
two or more companies. The Robinson-Patman Act of 1936 prohibits discrimination
in prices or promotional assistance by sellers to customers when the effect may
substantially lessen competition. The Federal Trade Commission Act of 1914
prohibits unfair methods of competition and deceptive practices.
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Foreign sales and the Company's business abroad also require compliance
with the business competition laws of other countries or treaty organizations,
such as the European Union.
Agreements or understandings between competitors to fix prices,
allocate business or markets, engage in boycotts or to limit supply is
considered per se unlawful and are not defensible under the antitrust laws.
The antitrust laws are complex and highly technical and not always
clear. Consult with Company legal counsel before engaging in any business
practice that may involve antitrust implications
ENVIRONMENT AND SAFETY
THE COMPANY IS COMMITTED TO THE GOAL OF SAFE, EFFICIENT AND
ENVIRONMENTALLY SOUND BUSINESS PRACTICES AND OPERATIONS. THE COMPANY BELIEVES
THAT SUCH COMMITMENT IS ENTIRELY CONSISTENT WITH ITS ECONOMIC GOALS AND IN THE
BEST INTERESTS OF ITS SHAREHOLDERS.
The Company is committed to complying with all applicable laws and
regulations relating to protection of the environment and the maintenance of a
safe workplace, and to using all reasonable efforts to operate in a manner that
preserves the environment, conserves natural resources, and protects the safety
and well being of its Associates, customers and the general public. There are
federal, state and local laws and regulations relating to the protection of the
environment and the maintenance of a safe workplace. These laws and regulations
are diverse and far reaching and any violation of them can produce severe
consequences not only for the Company but for each Associate involved in a
violation. The Company policy is to endeavor to comply with standards that
satisfy the laws of all countries in which it operates.
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