Exhibit 14.1
LEVEL 8 SYSTEMS CODE OF ETHICS AND BUSINESS CONDUCT
SECTION 1. INTRODUCTION
This Code of Ethics and Business Conduct helps insure compliance with legal
requirements and our standards of business conduct. All employees of Level 8
Systems, Inc. (the "Company") are expected to read and understand this Code of
Ethics and Business Conduct, uphold these standards in day to day activities,
comply with all applicable policies and procedures, and ensure that all agents
and contractors are aware of, understand and adhere to these standards.
This Code of Ethics and Business Conduct seeks to deter wrongdoing and to
promote:
o Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o Avoidance of conflicts of interest, including disclosure to an
appropriate person or persons identified in this Code of Ethics and
Business Conduct of any material transaction or relationship that
reasonably could be expected to give rise to such conflict;
o Full, fair, accurate, timely and understandable disclosure in
reports and documents that the Company files with, or submits to,
the Securities and Exchange Commission (the "SEC") and in other
public communications made by the Company;
o Compliance with applicable governmental laws, rules and regulations;
o The prompt internal reporting of violations of this Code of Ethics
and Business Conduct to an appropriate person or persons identified
in this Code of Ethics and Business Conduct; and
o Accountability for adherence to this Code of Ethics and Business
Conduct.
Because the principles described in this Code of Ethics and Business Conduct are
general in nature, you should also review all applicable Company policies and
procedures for more specific instruction which can be found on the Level 8
Systems Knowledge Center intranet, under Network and Systems Policies. If you
have any questions you can contact the Human Resources Department or Corporate
Secretary.
Nothing in this Code of Ethics and Business Conduct, in any company policies and
procedures, or in other related communications (verbal or written) creates or
implies an employment contract or term of employment.
We are committed to continuously reviewing and updating our policies and
procedure. This Code of Ethics and Business Conduct, therefore, is subject to
modification. This Code of Ethics and Business Conduct supersedes all other such
codes, policies, procedures, instructions, practices, rules or written or verbal
representations to the extent they are inconsistent.
SECTION 2. COMPLIANCE IS EVERYONES BUSINESS
Ethical business conduct is critical to our business. As an employee, your
responsibility is to respect and adhere to these practices. Many of these
practices reflect legal or regulatory requirements. Violations of these laws and
regulations can create significant liability for you, the Company, its
directors, officers, and other employees.
Part of your job and ethical responsibility is to help enforce this Code of
Ethics and Business Conduct. You should be alert to possible violations of the
law, this Code of Ethics and Business Conduct, or other company policies or
procedures. You should report any such possible violations to the Corporate
Secretary. You must cooperate in any internal or external investigations of
possible violations. Reprisal, threats, retribution or retaliation against any
person who has in good faith reported a violation or a suspected violation of
law, this Code of Ethics and Business Conduct, or other Company policies, or
against any person who is assisting any investigation or process with respect to
such a violation, is prohibited.
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Exhibit 14.1
Violations of law, this Code of Ethics and Business Conduct or other Company
policies or procedures by Company employees can lead to disciplinary action up
to and including termination.
In trying to determine whether any given action is appropriate, use the
following test. Imagine that the words you are using or the action you are
taking is going to be fully disclosed in the media with all the details,
including your photo. If you are uncomfortable with the idea of this information
being made public, perhaps you should think again about your words or your
course of action.
In all cases, if you are unsure about the appropriateness of an event or action,
please seek assistance in interpreting the requirements of these practices by
contacting the Corporate Secretary.
SECTION 3. YOUR RESPONSIBILITIES TO THE COMPANY AND ITS STOCKHOLDERS
GENERAL STANDARDS OF CONDUCT
The Company expects all employees, agents and contractors to exercise good
judgment to ensure the safety and welfare of employees, agents and contractors
and to maintain a cooperative, efficient, positive, harmonious and productive
work environment and business organization. These standards apply while working
on our premises, at offsite locations where our business is being conducted, at
Company sponsored business and social events, or at any other place where you
are a representative of the Company. Employees, agents or contractors who engage
in misconduct or whose performance is unsatisfactory may be subject to
corrective action, up to and including termination.
APPLICABLE LAWS
All Company employees, agents and contractors must comply with all applicable
laws, regulations, rules and regulatory orders. Company employees located
outside of the United States must comply with laws, regulations, rules and
regulatory orders of the United States, including the Foreign Corrupt Practices
Act and the U.S. Export Control Act, in addition to applicable local laws. Each
employee, agent and contractor must acquire appropriate knowledge of the
requirements relating to his or her duties sufficient to enable him or her to
recognize potential dangers and to know when to seek advice from legal counsel
on specific Company policies and procedures. Violations of laws, regulations,
rules and orders may subject the employee, agent or contractor to individual
criminal or civil liability, as well as to discipline by the Company. Such
individual violations also may subject the Company to civil or criminal
liability or the loss of business.
CONFLICTS OF INTEREST
Each of us has a responsibility to the Company, our stockholders and each other.
Although this duty does not prevent us from engaging in personal transactions
and investments, it does demand that we avoid situations where a conflict of
interest might occur or appear to occur. The Company is subject to scrutiny from
many different individuals and organizations. We always should strive to avoid
even the appearance of impropriety.
What constitutes conflict of interest? A conflict of interest exists where the
interests or benefits of one person or entity conflict with the interest or
benefits of the Company. Examples include:
o Employment/Outside Employment. In consideration of your employment
with the Company, you are expected to devote your full attention to
the business interests of the Company. You are prohibited from
engaging in any activity that interferes with your performance or
responsibilities to the Company or is otherwise in conflict with or
prejudicial to the Company. Our policies prohibit any employee from
accepting simultaneous employment with a Company supplier, customer,
developer or competitor, or from taking part in any activity that
enhances or supports a competitor's position. Additionally, you must
disclose to the Company any interest that you have that may conflict
with the business of the Company. If you have any questions on this
requirement, you should contact your supervisor or the Human
Resources Department.
o Outside Directorships. It is a conflict of interest to serve as a
director of any company that competes with the Company. Although you
may serve as a director of a Company supplier, customer, developer,
or other business partner, our policy requires that you first obtain
approval from the Company's Corporate Secretary before accepting a
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Exhibit 14.1
directorship. Any compensation you receive should be commensurate to
your responsibilities. Such approval may be conditioned upon the
completion of specified actions.
o Business Interests. If you are considering investing in a Company
customer, supplier, developer or competitor, you must first take
great care to ensure that these investments do not compromise your
responsibilities to the Company. Many factors should be considered
in determining whether a conflict exists, including the size and
nature of the investment; your ability to influence the Company's
decisions; your access to confidential information of the Company or
of the other company; and the nature of the relationship between the
Company and the other company.
o Inventions. Company employees must receive written permission from
the Corporate Secretary before developing outside of the Company,
any products, software or intellectual property that is or may be
related to the Company's current or potential business.
o Related Parties. As a general rule, you should avoid conducting
Company business with a relative or significant other, or with a
business in which a relative or significant other is associated in
any significant role. Relatives include spouse, sister, brother,
daughter, son, mother, father, grandparents, aunts, uncles, nieces,
nephews, cousins, step relationships, and in-laws. Significant
others include persons living in a spousal (including same sex) or
familial fashion with an employee.
If such a related party transaction is unavoidable, you must fully
disclose the nature of the related party transaction to the
Company's Human Resource Department and Corporate Secretary. If
determined to be material to the Company by the Human Resource
Department, the Company's Audit Committee must review and, in
advance, approve in writing the related party transaction. The most
significant related party transactions, particularly those involving
the Company's directors or executive officers, must be reviewed and,
in advance, approved in writing by the Company's Board of Directors.
The Company must report all such material related party transactions
under applicable accounting rules, Federal securities laws, SEC
rules and regulations, and securities market rules. Any dealings
with a related party must be conducted in such a way that no
preferential treatment is given to this business.
The Company discourages the employment of relatives and significant
others in positions or assignments within the same department and
prohibits the employment of such individuals in positions that have
a financial dependence or influence (e.g., an auditing or control
relationship or a supervisor/subordinate relationship). The purpose
of this policy is to prevent the organizational impairment and
conflicts that are likely outcome of the employment of relatives or
significant others, especially in a supervisor/subordinate
relationship. If a question arises about whether a relationship is
covered by this policy, the Human Resources Department shall advise
all affected applicants and transferees of this policy. Willful
withholding of information regarding a prohibited
relationship/reporting arrangement may be subject to corrective
action, up to and including termination. If a prohibited
relationship exists or develops between two employees, the employee
in the senior position must bring the situation to the attention of
his/her supervisor. The Company retains the prerogative to separate
the individuals at the earliest possible time, either by
reassignment or by termination, if necessary.
o Other Situations. Because other conflicts of interest may arise, it
would be impractical to attempt to list all possible situations. If
a proposed transaction or situation raises any questions or doubts
in your mind, you should consult the Corporate Secretary.
Corporate Opportunities
Employees, officers and directors may not exploit for their own personal
gain opportunities that are discovered through the use of corporate
property, information or position unless the opportunity is disclosed
fully in writing to the Company's Board of Directors and the Board of
Directors declines to pursue such opportunity.
Protecting the Company's Confidential Information
Employees, officers and directors may not exploit for their own personal
gain opportunities that are discovered through the use of corporate
property, information or position unless the opportunity is disclosed
fully in writing to the Company's Board of Directors and the Board of
Directors declines to pursue such opportunity.
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Exhibit 14.1
Protecting the Company's Confidential Information
The Company's confidential information is a valuable asset. The Company's
confidential information includes: (1) source and object code, prices,
trade secrets, mask works, databases, hardware, software, designs and
techniques, programs, engine protocols, models, displays and manuals, and
the selection, coordination, and arrangement of the contents of such
materials, (2) any unpublished information concerning research activities
and plans, customers, marketing or sales plans, sales forecasts or results
of marketing efforts, pricing or pricing strategies, costs, operational
techniques, strategic plans, customer information, including name, address
and email address, (3) marketing data, and (4) any other identification
data, and unpublished financial information, including information
concerning revenues, profits and profit margins. This information is the
property of the Company and may be protected by patent, trademark,
copyright and trade secret laws. All confidential information must be used
for Company business purposes only. Every employee, agent and contractor
must safeguard it. THIS RESPONSIBILITY INCLUDES NOT DISCLOSING THE COMPANY
CONFIDENTIAL INFORMATION, SUCH AS INFORMATION REGARDING THE COMPANY'S
PRODUCTS OR BUSINESS OVER THE INTERNET. You are also responsible for
properly labeling any and all documentation shared with or correspondence
sent to the Company's Corporate Secretary or outside counsel as "Level 8
Systems Confidential". This responsibility includes the safeguarding,
securing and proper disposal of confidential information in accordance
with the Company's policy on Maintaining and Managing Records set forth
later in this Section 3 of this document. This obligation extends to
confidential information of third parties, which the Company rightfully
has received under Non Disclosure Agreements. See the Company's policy
dealing with Handling Confidential Information of Others set forth in
Section 4 of this Code of Ethics and Business Conduct.
o Confidentiality Guidelines. When you joined the Company, you signed
guidelines to protect and use appropriately the Company's
confidential information. These guidelines remain in effect for as
long as you work for the Company and after you leave the Company.
Under these guidelines you may not disclose the Company's
confidential information to anyone or use it to benefit anyone other
than the Company without the prior written consent of an authorized
Company officer.
o Disclosure of Company Confidential Information. To further the
Company's business, from time to time our confidential information
may be disclosed to potential business partners. Such disclosure
however, should never be done without carefully considering its
potential benefits and risks. If you determine, in consultation with
your manager and other appropriate Company management, that
disclosure of confidential information is necessary, you then must
contact the Corporate Secretary to ensure that an appropriate
written nondisclosure agreement is signed prior to the disclosure.
The Company has standard nondisclosure agreements suitable for most
disclosures. You must not sign a third party's nondisclosure
agreement or accept changes to the Company's standard nondisclosure
agreements without review and approval by the Company's Corporate
Secretary. In addition, all Company materials that contain Company
confidential information, including presentations, must be reviewed
and approved by the Company's Corporate Secretary prior to
publication or use. Furthermore, any employee publication or
publicly made statement that might be perceived or construed as
attributable to the Company, made outside the scope of his or her
employment with the Company, must be reviewed and approved in
writing in advance and must include the Company's standard
disclaimer that the publication or statement represents the views of
the specific author and not of the Company.
o Requests by Regulatory Authorities. The Company and its employees,
agents and contractors must cooperate with appropriate government
inquiries and investigations. In this context, however, it is
important to protect the legal rights of the Company with respect to
its confidential information. All government requests for
information, documents or investigative interviews must be referred
to the Company's Corporate Secretary. No financial information may
be disclosed without the prior approval of the Chief Financial
Officer.
o Company Spokespeople. Specific policies have been established
regarding who may communicate information to the press and the
financial analyst community. All inquiries or calls from the press
and financial analysts should be referred to the Chief Financial
Officer or Investor Relations Department. The Company has designated
its Chief Executive Officer, Chief Financial Officer and Investor
Relations Department as official Company spokespeople for financial
matters. The Company has designated its Public Relations Department
as official Company spokespeople for marketing, technical and other
such information. These designees are the only people who may
communicate with the press on behalf of the Company.
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Exhibit 14.1
OBLIGATIONS UNDER SECURITIES LAWS "INSIDER" TRADING
Obligations under the U.S. securities laws apply to everyone. In the normal
course of business, officers, directors, employees, agents, contractors and
consultants of the Company may come into possession of significant, sensitive
information. This information is the property of the Company - you have been
entrusted with it. You may not profit from it by buying or selling securities
yourself or from passing on the information to others to enable them to profit
or for them to profit on your behalf. The purpose of this policy is both to
inform you of your legal responsibilities and to make clear to you that the
misuse of sensitive information is contrary to Company policy and U.S.
securities laws.
Insider trading is a crime, penalized by fines up to $5,000,000 and 20 years in
jail for individuals. In addition, the SEC may seek the imposition of a civil
penalty of up to 3 times the profits made or losses avoided from the trading.
Insider trades must expel any profits made, and are often subjected to an
injunction against future violations. Finally, insider traders may be subjected
to civil liability in private lawsuits.
Employers and other controlling persons (including supervisory personnel) also
are at risk under U.S. securities laws. Controlling persons may, among other
things, face penalties of the greater of $5,000,000 or 3 times the profits made
or losses avoided by the trader if they recklessly fail to take preventive steps
to control insider trading.
Thus, it is important both to you and to the Company that insider-trading
violations do not occur. You should be aware that stock market surveillance
techniques are becoming increasingly more sophisticated, and the chance that
U.S. federal or other regulatory authorities will detect and prosecute even
small level trading is significant. Insider trading rules are strictly enforced,
even in instances when the financial transactions seem small. You should contact
the Chief Financial Officer if you are unsure as to whether or not you are free
to trade.
The Company has imposed a trading blackout period on members of the Board of
Directors, executive officers and all employees. These directors, executive
officers and employers generally may not trade in Company securities during the
blackout period.
Trading Windows and Blackout Periods
1. Trading Window for Section 16 Individuals and Key Employees. After
obtaining trading approval from the Chief Financial Officer, Section 16
Individuals and Key Employees may trade in Company securities only during
the period beginning at the open of trading on the second full trading day
following the Company's widespread public release of quarterly or year-end
earnings, and ending at the close of trading on the fifteenth day of the
third month of the fiscal quarter in which the earnings are released.
2. Trading Windows for All Other Covered Insiders. All other Covered Insiders
who are not Section 16 Individuals or Key Employees may trade in Company
securities only during the period beginning at the open of trading on the
second full trading day following the Company's widespread public release
of quarterly or year-end earnings and ending at the close of trading on
the fifteenth day of the third month of the fiscal quarter in which the
earnings are released.
3. No Trading During Trading Windows While in the Possession of Material
Nonpublic Information. No Covered Insiders possessing material nonpublic
information concerning the Company may trade in Company securities even
during applicable trading windows. Persons possessing such information may
trade during a trading window only after the open of trading on the second
full trading day following the Company's widespread public release of the
information.
4. No Trading During Blackout Periods. No Covered Insiders may trade in
Company securities outside of the applicable trading windows or during any
special blackout periods that the Compliance Officer may designate. No
Covered Insiders may disclose to any outside third party that a special
blackout period has been designated.
5. Exceptions for Hardship Cases. The Chief Financial Officer may, on a
case-by-case basis, authorize trading in Company securities outside of the
applicable trading windows (but not during special blackout periods) due
to financial hardship or other hardships.
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Exhibit 14.1
PROHIBITION AGAINST SHORT SELLING OF COMPANY STOCK
No Company director, officer or other employee, agent or contractor may,
directly or indirectly, sell any equity security, including derivatives, of the
Company if he or she (1) does not own the security sold, or (2) if he or she
owns the security, does not deliver it against such sale (a "short sale against
the box") within twenty days thereafter, or does not within five days after such
sale deposit it in the mails or other usual channels of transportation. No
Company director, officer or other employee, agent or contractor may engage in
such short sales. A short sale, as defined in this policy, means any transaction
whereby one may benefit from a decline in the Company's stock price. While
employees who are not executive officers or directors are not prohibited by law
from engaging in short sales of Company's securities, the Company has adopted as
policy that employees may not do so.
USE OF COMPANY'S ASSETS
1. General. Protecting the Company's assets is a key fiduciary responsibility
of every employee, agent and contractor. Care should be taken to ensure
that assets are not misappropriated, loaned to others, or sold or donated,
without appropriate authorization. All Company employees, agents and
contractors are responsible for the proper use of Company assets, and must
safeguard such assets against loss, damage, misuse or theft. Employees,
agents or contractors who violate any aspect of this policy or who
demonstrates poor judgment in the manner in which they use any Company
asset may be subject to disciplinary action, up to and including
termination of employment or business relationship, at the Company's sole
discretion. Company equipment and assets are to be used for Company
business purposes only. Employees, agents and contractors may not use
Company assets for personnel use, nor may they allow any other person to
use Company assets. Employees who have any questions regarding this policy
should bring them to the attention of the Company's Human Resources
representative.
2. Company Funds. Every Company employee is personally responsible for all
Company funds over which he or she exercises control. Company agents and
contractors should not be allowed to exercise control over Company funds.
Company funds must solely be used for Company business purposes. Every
Company employee, agent and contractor must take reasonable steps to
ensure that the Company receives good value for Company funds spent and
must maintain accurate and timely records of each and every expenditure.
Expense reports must be accurate and submitted in a timely manner. Company
employees, agents and contractors must not use Company funds for any
personal use.
3. Computers and Other Equipment. The Company strives to furnish employees
with the equipment necessary to efficiently and effectively perform their
jobs. You must care for that equipment and responsibly use it for Company
business purposes, only. If you use Company equipment at your home or
off-site, take precautions to protect it from theft or damage, just as if
it were your own. If you are no longer employed by the Company, you must
immediately return all Company equipment. While computers and other
electronic devices are made accessible to employees to assist them to
perform their jobs and to promote Company's interests, all such equipment,
whether used wholly or partially on the Company's premises, must remain
fully accessible to the Company and, to the maximum extent permitted by
law, will remain the sole and exclusive property of the Company.
Employees, agents and contractors should not maintain any expectation of
privacy with respect to information transmitted over, received by, or
stored in any electronic communications device owned, leased, or operated
in whole or in part by or on behalf of the Company. To the extent
permitted by applicable law, the Company retains the right to gain access
to any information received by, transmitted by, or stored in any such
electronic communications device, by and through its employees, agents,
contractors, or representatives, at any time, either with or without an
employee's or third party's knowledge, consent or approval.
4. Software. All software used by employees to conduct Company business must
be appropriately licensed. Never make or use illegal or unauthorized
copies of any software, whether in the office, at home, or on the road,
since doing so may constitute copyright infringement and may expose you
and the Company to potential civil and criminal liability. In addition,
use of illegal or unauthorized copies of software may subject the employee
to disciplinary action, up to and including termination. The Company's
Information Technology Department periodically will inspect Company
computers to verify that only approved and licensed software has been
installed. Any non-licensed/supported software will be removed.
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Exhibit 14.1
5. Electronic Usage. The purpose of this policy is to make certain that
employees utilize electronic communication devices in a legal, ethical,
and appropriate manner. This policy addresses the Company's
responsibilities and concerns regarding the fair and proper use of all
electronic communications devices within the organization, including
computers, email, connections to the Internet, intranet and extranet and
any other public or private networks, voice mail, video conferencing,
facsimiles, and telephones. Posting or discussing information concerning
the Company's products or business on the Internet without the prior
written consent of the company's Chief Financial Officer is prohibited.
Any other form of electronic communication used by employees currently or
in the future also is intended to be encompassed under this policy. It is
not possible to identify every standard and rule applicable to the use of
electronic communications devices. Employees, therefore, are encouraged to
use sound judgment whenever using any feature of our communications
systems.
MAINTAINING AND MANAGING RECORDS
The purpose of this policy is to set forth and convey the Company's business and
legal requirements in managing records, including all recorded information
regardless of medium or characteristics. Records include paper documents, CD's,
computer hard disks, email, floppy disks, microfilm or all other media. The
Company is required by local, state, federal, foreign and other applicable laws,
rules and regulations to retain certain records and to follow specific
guidelines in managing its records. Civil and criminal penalties for failure to
comply with such guidelines can be severe for employees, agents, contractors and
the Company, and failure to comply with such guidelines may subject the
employee, agent or contractor to disciplinary action, up to and including
termination of employment or business relationship at the Company's sole
discretion.
RECORDS ON LEGAL HOLD
A legal hold suspends all document destruction procedures in order to preserve
appropriate records under special circumstances, such as litigation or
government investigations. The Company's Corporate Secretary determines and
identifies what types of Company records or documents are required to be placed
under a legal hold. Every Company employee, agent and contractor must comply
with this policy. Failure to comply with this policy may subject the employee,
agent or contractor to disciplinary action, up to and including termination of
employment or business relationship at the Company's sole discretion.
The Company's Corporate Secretary will notify you if a legal hold is placed on
records for which you are responsible. You then must preserve and protect the
necessary records in accordance with instructions from the Company's Corporate
Secretary. RECORDS OR SUPPORTING DOCUMENTS THAT HAVE BEEN PLACED UNDER A LEGAL
HOLD MUST NOT BE DESTROYED, ALTERED OR MODIFIED UNDER ANY CIRCUMSTANCES. A legal
hold remains effective until it officially is released in writing by the
Company's Corporate Secretary. If you are unsure whether a document has been
placed under a legal hold, you should preserve and protect that document while
you check with the Company's Corporate Secretary.
If you have any questions about this policy, you should contact the Company's
Corporate Secretary.
PAYMENT PRACTICES
o Accounting Practices. The Company's responsibilities to its
stockholders and the investing public require that all transactions
fully and accurately be recorded in the Company's books and records
in compliance with all applicable laws. False or misleading entries,
unrecorded funds or assets, or payments without appropriate
supporting documentation and approval strictly are prohibited and
violate Company policy and the law. Additionally, all documentation
supporting a transaction fully and accurately should describe the
nature of the transaction and be processed in a timely fashion.
o Political Contributions. The Company reserves the right to
communicate its position on important issues to elected
representatives and other government officials. It is the Company's
policy fully to comply with all local, state, federal, foreign and
other applicable laws, rules and regulations regarding political
contributions. Under no circumstances may the Company's funds or
assets be used for, or be contributed to, political campaigns or
political practices without the prior written approval of the
Company's Chief Financial Officer and, if required, the Board of
Directors.
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Exhibit 14.1
o Prohibition of Inducements. Under no circumstances may employees,
agents or contractors make an offer to pay, make payment, make a
promise to pay, or issue an authorization to pay any money, gift, or
anything of value to customers, vendors, consultants, etc., which
would be perceived to intend, directly or indirectly, to improperly
influence any business decision, any act or failure to act, any
commitment of fraud, or any opportunity for the commission of fraud.
Inexpensive gifts, infrequent business meals, celebratory events and
entertainment, provided that they are not excessive or create an
appearance of impropriety, do not violate this policy. Questions
regarding whether a particular payment or gift violates this policy
should be directed to Human Resources or the Corporate Secretary.
FOREIGN CORRUPT PRACTICES ACT
The Company requires full compliance with the Foreign Corrupt Practices Act
(FCPA) by all of its employees, agents, and contractors.
The anti-bribery and corrupt payment provisions of the FCPA make illegal any
corrupt offer, payment, promise to pay, or authorization to pay any money, gift,
or anything of value to any foreign official, or any foreign political party,
candidate or official, for the purpose of: influencing any act or failure to
act, in the official capacity of that foreign official or party; or inducing the
foreign official or party to use influence to affect a decision of a foreign
government or agency, in order to obtain or retain business for anyone, or
direct business to anyone.
All Company employees, agents and contractors, whether located in the United
States or abroad, are responsible for FCPA compliance and the procedures to
ensure FCPA compliance. All managers and supervisory personnel are expected to
monitor continued compliance with the FCPA to ensure compliance with the highest
moral, ethical and professional standards of the Company. FCPA compliance
includes the Company's policy on Maintaining and Managing Records in Section 3
of this Code of Business Conduct and Ethics.
Laws in most countries outside of the United States also prohibit or restrict
government officials or employees of government agencies from receiving
payments, entertainment, or gifts for the purpose of winning or keeping
business. No contract or agreement may be made with any business in which a
government official or employee holds a significant interest, without the prior
approval of the Company's Corporate Secretary.
EXPORT CONTROLS
A number of countries maintain controls on the destinations of exported products
or software. Some of the strictest export controls are maintained by the United
States against countries that the U.S. government considers unfriendly or as
supporting international terrorism. The U.S. regulations are complex and apply
both to exports from the United States and to exports of products from other
countries, when those products contain U.S. origin components or technology.
Software created in the United States is subject to these regulations even if
duplicated and packaged abroad. In some circumstances, an oral presentation
containing technical data made to foreign nationals in the United States may
constitute a controlled export. The Corporate Secretary can provide you with
guidance on which countries are prohibited destinations for Company products or
whether a proposed technical presentation to foreign nationals may require a
U.S. Government license.
PUBLIC DISCLOSURE OF INFORMATION
The federal securities laws require the Company to disclose certain information
in various reports that the Company must file with or submit to the SEC. In
addition, from time to time the Company makes other public communications, such
as issuing press releases. In order to ensure that material information is
presented to the public on a timely basis, the Company has designated its Chief
Executive Officer, Chief Financial Officer, and General Counsel as responsible
for considering the materiality of information and determining the Company's
disclosure obligations.
The Company expects its Chief Executive Officer, Chief Financial Officer, the
Audit Committee, and all employees who are involved in the preparation of SEC
reports or other public documents to ensure that the information disclosed in
those documents is full, fair, accurate, timely and understandable.
Moreover, if any employee becomes aware of any material information that you
believe should be disclosed to the public in the Company's reports filed with
the SEC, it is your responsibility to bring such information to the attention of
the Chief Financial Officer or to the Company's General Counsel. To the extent
that you reasonably believe that questionable accounting or auditing conduct or
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Exhibit 14.1
practices have occurred or are occurring, you should report those concerns to
the Company's General Counsel.
SECTION 4. RESPONSIBLITIES TO OUR CUSTOMERS AND OUR SUPPLIERS
CUSTOMER RELATIONSHIPS
If your job puts you in contact with any Company customers or potential
customers, it is critical for you to remember that you represent the Company to
the people with whom you are dealing. Act in a manner that creates value for our
customers and helps to build a relationship based upon trust. The Company and
its employees have provided products and services for a period of time and have
built up significant goodwill over that time. This goodwill is one of our most
important assets and the Company employees, agents and contractors must act to
preserve and enhance our reputation.
PAYMENTS OR GIFTS FROM OTHERS
Under no circumstances may employees, agents or contractors accept any offer,
payment, promise to pay, or authorization to pay any money, gift, or anything of
value from customers, vendors, consultants, etc. that is perceived as intended,
directly or indirectly, to influence any business decision, any act or failure
to act, any commitment of fraud, or any opportunity for the commission of fraud.
Inexpensive gifts, infrequent business meals, celebratory events and
entertainment, provided that they are not excessive or create an appearance of
impropriety, do no violate this policy. Questions regarding whether a particular
payment or gift violates this policy should be directed to Human Resources or
the Corporate Secretary.
Gifts given by the Company to suppliers or customers or received from suppliers
or customers always should be appropriate to the circumstances and never should
be of a kind that could create an appearance of impropriety. The nature and cost
must always accurately be recorded in the Company's books and records.
PUBLICATIONS OF OTHERS
The Company subscribes to many publications that help employees better perform
their jobs. These publications include newsletters, reference works, online
reference services, magazines, books, and other digital and printed works.
Copyright law generally protects these works, and their unauthorized copying and
distribution constitute copyright infringement. You first must obtain the
consent of the publisher of a publication before copying publications or
significant parts of them. When in doubt about whether you may copy a
publication, consult the Corporate Secretary.
HANDLING THE CONFIDENTIAL INFORMATION OF OTHERS
The Company has many kinds of business relationships with many companies and
individuals. Sometimes, they will volunteer confidential information about their
products or business plans to induce the Company to enter into a business
relationship. At other times, we may request a third party to provide
confidential information to permit the Company to evaluate a potential business
relationship with that party. Whatever the situation, we must take special care
to responsibly handle the confidential information in accordance with our
agreements with such third parties. See also the Company's policy on Maintaining
and Managing Records in Section 3 of this Code of Ethics and Business Conduct.
o Appropriate Nondisclosure Agreements. Confidential information may
take many forms. An oral presentation about a company's product
development plans may contain protected trade secrets. A demo of an
alpha version of a company's new software may contain information
protected by trade secret and copyright laws.
You should never accept information offered by a third party that is
represented as confidential, unless an appropriate nondisclosure
agreement has been signed with the party offering the information.
THE CORPORATE SECRETARY CAN PROVIDE NONDISCLOSURE AGREEMENTS TO FIT
ANY PARTICULAR SITUATION, AND WILL COORDINATE APPROPRIATE EXECUTION
OF SUCH AGREEMENTS ON BEHALF OF THE COMPANY. Even after a
nondisclosure agreement is in place, you only should accept the
information necessary to accomplish the purpose of receiving it,
such as a decision on whether to proceed to negotiate a deal. If
more detailed or extensive confidential information is offered but
is not necessary for your immediate purposes, it should be refused.
E-71
Exhibit 14.1
o Need-to-Know. Once a third party's confidential information has been
disclosed to the Company, we have an obligation to abide by the
terms of the relevant nondisclosure agreement and limit its use to
the specific purpose for which it was disclosed and to disseminate
it only to other Company employees with a need to know the
information. Every employee, agent and contractor involved in a
potential business relationship with a third party must understand
and strictly observe the restrictions on the use and handling of
confidential information. When in doubt, consult the Corporate
Secretary.
o Notes and Reports. When reviewing the confidential information of a
third party under a nondisclosure agreement, it is natural to take
notes to prepare reports summarizing the results of the review and,
based partly on those notes or reports, to draw conclusions about
the suitability of a business relationship. Notes or reports,
however, can include confidential information disclosed by the other
party and so only should be retained long enough to complete the
evaluation of the potential business relationship. Subsequently,
they either should be destroyed or turned over to the Corporate
Secretary for safekeeping or destruction. These materials should be
treated as any other disclosure of confidential information is
treated: marked as confidential and distributed only to those
Company employees with a need to know.
o Competitive Information. You should never attempt to obtain a
competitor's confidential information by improper means, and you
especially should never contact a competitor regarding their
confidential information. While the Company may, and does, employ
former employees of competitors, we recognize and respect the
obligations of those employees not to use or disclose the
confidential information of their former employers.
SELECTING SUPPLIERS
The Company's suppliers make significant contributions to our success. To create
an environment where our suppliers have an incentive to work with the Company,
they must be confident that they will be treated lawfully and in an ethical
manner. The Company's policy is to purchase supplies based on need, quality,
service, price and terms and conditions.. Under no circumstances should any
Company employee, agent or contractor attempt to coerce suppliers in any way.
The confidential information of a supplier is entitled to the same protection as
that of any other third party and must not be received before an appropriate
nondisclosure agreement has been signed. A supplier's performance never should
be discussed with anyone outside the Company. A supplier to the Company
generally is free to sell its products or services to any other party, including
competitors of the Company. In some cases, where the products or services have
been designed, fabricated, or developed to our specifications, the agreement
between the parties may contain restrictions on sales.
GOVERNMENT REGULATIONS
It is the Company's policy to fully comply with all applicable laws and
regulations governing contact and dealings with government employees and public
officials and to adhere to high ethical, moral and legal standards of business
conduct. This policy includes strict compliance with all local, state, federal,
foreign and other applicable laws, rules and regulations. If you have any
questions concerning government relations you should contact the Company's
Corporate Secretary.
LOBBYING
Employees, agents or contractors whose work requires lobbying communication with
any member or employee of a legislative body or with any government official or
employee in the formulation of legislation must have prior written approval of
such activity from the Company's Corporate Secretary. Activity covered by this
policy includes meetings with legislators or members of their staffs or with
senior executive branch officials. Preparation, research, and other background
activities that are done in support of lobbying communication also are covered
by this policy even if the communication ultimately is not made.
GOVERNMENT CONTRACTS
It is the Company's policy to fully comply with all applicable laws and
regulations that apply to government contracting. It also is necessary to
strictly adhere to all terms and conditions of any contract with local, state,
federal, foreign or other applicable governments. The Company's Corporate
Secretary must review and approve all contracts with any government entity.
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Exhibit 14.1
FREE AND FAIR COMPETITION
Most countries have well-developed bodies of law designed to encourage and
protect free and fair competition. The Company is committed to obeying both the
letter and spirit of these laws. The consequences of not doing so can be severe
for all of us.
These laws often regulate the Company's relationships with its distributors,
resellers, dealers, and customers,. Competition laws generally address the
following areas: pricing practices (including price discrimination),
discounting, terms of sales, credit terms, promotional allowances, secret
rebates, exclusive dealerships or distributorships, product bundling,
restrictions on carrying competing products, termination, and many other
practices.
Competition laws also govern, usually quite strictly, relationships between the
Company and its competitors. As a general rule, contacts with competitors should
be limited and always should avoid subjects such as prices or other terms and
conditions of sale, customers, and suppliers. Employees, agents or contractors
of the Company may not knowingly make false or misleading statements regarding
its competitors, customers or suppliers. Participating with competitors in a
trade association or in a standards creation body is acceptable when the
association has been properly established, has a legitimate purpose, and has
limited its activities to that purpose.
No employee, agent or contractor shall at any time or under any circumstances
enter into an agreement or understanding, written or oral, express or implied,
with any competitor concerning prices, discounts, other terms or conditions of
sale, profits or profit margin, costs, allocation of product or geographic
markets, allocation of customers, limitations on production, boycotts of
customers or suppliers, or bids or the intent to bid or even discuss or exchange
information on these subjects. In some cases, legitimate joint ventures with
competitors may permit exceptions to these rules, as may bona fide purchases
from or sales to competitors on non competitive products, but the Company's
Corporate Secretary must review all such proposed ventures in advance. These
prohibitions are absolute and strict observance is required. Collusion among
competitors is illegal and the consequences of a violation are severe.
Although the spirit of these laws, known as "antitrust," "competition," or
"consumer protection" or unfair competition laws, is straightforward, their
application to particular situations can be quite complex. To ensure that the
Company complies fully with these laws, each of us should have a basic knowledge
of them and should involve our Corporate Secretary early on when questionable
situations arise.
INDUSTRIAL ESPIONAGE
It is the Company's policy to lawfully compete in the marketplace. This
commitment to fairness includes respecting the rights of our competitors and
abiding by all applicable laws in the course of competing. The purpose of this
policy is to maintain the Company's reputation as a lawful competitor and to
help ensure the integrity of the competitive marketplace. The Company expects
its competitors to respect our rights to lawfully compete in the marketplace and
we must equally respect their rights to do the same. Company employees, agents
and contractors may not steal or unlawfully use the information, material,
products, intellectual property, or proprietary or confidential information of
anyone including suppliers, customers, business partners or competitors.
SECTION 5. WAIVERS
Any waiver of any provision of this Code of Ethics and Business Conduct for a
member of the Company's Board of Directors or an executive officer must be
approved in writing by the Company's Board of Directors and promptly disclosed.
Any waiver of any provision of this Code of Ethics and Business Conduct with
respect to any other employee, agent or contractor must be approved in writing
by the Company's Corporate Secretary.
SECTION 6. DISCIPLINARY ACTIONS
The matters covered in this Code of Conduct and Business Ethics are of the
utmost importance to the Company, its stockholders and its business partners,
and are essential to the Company's ability to conduct its business in accordance
with its stated values. We expect all of our employees, agents, contractors and
consultants to adhere to these rules in carrying out their duties for the
Company.
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Exhibit 14.1
The Company will take appropriate action against any employee, agent, contractor
or consultant whose actions are found to violate these policies or any other
policies of the Company. Disciplinary actions may include immediate termination
of employment or business relationship at the Company's sole discretion. Where
the Company has suffered a loss, it may pursue its remedies against the
individuals or entities responsible. Where laws have been violated, the Company
will fully cooperate with the appropriate authorities. You should review the
Company's policies and procedures on Level 8 Systems Knowledge Center intranet,
under Network and Systems Policies for more detailed information.
E-74
Exhibit 14.1
CONFIRMATION OF RECEIPT
OF THE
CODE OF ETHICS AND BUSINESS CONDUCT
FOR
LEVEL 8 SYSTEMS, INC.
By signing below, I attest that I have received a copy of the Code of Ethics and
Business Conduct for Level 8 Systems, Inc. and agree to abide by the terms and
conditions set forth therein. Failure to abide by the Code of Ethics and
Business Conduct of Level 8 Systems, Inc. may result in disciplinary action or
possible termination of employment.
DATE:
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EMPLOYEE SIGNATURE
WITNESS:
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E-75