EXHIBIT 14
THE CHANCELLOR GROUP AND GRYPHON PRODUCTION
CODE OF CONDUCT
A Message About the Code from the CEO:
To All Officers, Foreman/Managers, and Directors of The Chancellor Group And
Gryphon Production Company:
One of our most valuable assets is our integrity. Protecting this asset is
the job of everyone in the Company. To that end, the Board of Directors has
established a Code of Business Conduct and Ethics to help all of us, including
the Board, comply with the law and maintain the highest standards of ethical
conduct. The Code does not cover every issue that may arise, but sets out basic
principles and a methodology to help guide all of us in the attainment of this
common goal. Our reputation is upheld and enhanced- or diminished- by each
person's decisions, actions, and sense of business ethics. We expect our agents
and representatives to have similar standards of ethics and codes of conduct.
Please note that in addition, a Code of Conduct with similar relevant provisions
has been established for all non-senior employees.
Please read this document carefully, understand its contents, and then
apply the principles it states in the course of your work. Such conduct is not
only the right thing to do, it is the law. If you are in a situation that you
believe may violate or lead to a violation of this Code, follow the procedures
described in Section 17 of the Code.
As you all know, our reputation is integral to our success, and reputation
comes from our actions on a continuous basis. Your performance in conducting our
business in a manner that is consistent with the principles contained in the
Code will enable us to keep and enhance that reputation.
Thank you
Brad Fischer
Chief Executive Officer
CHANCELLOR GROUP AND GRYPHON PRODUCTION CODE OF CONDUCT
1. Who is responsible for Our reputation and business ethics?
ALL of us are responsible for our reputation. One single employee's act
can have a very damaging effect on our reputation.
Our reputation is based on our individual business conduct. Every interaction,
both inside and outside the Company, is an opportunity for us to demonstrate our
integrity. Ethical business conduct is a part of everyone's job. We do not
change our standards because competitors, suppliers, or customers behave
differently, or in order to meet financial goals.
Each Officer Foreman/Manager, and Director is responsible for the integrity of
his or her own work. This Code of Conduct outlines our expected behaviors and
practices. If we fail to comply with the Code, we risk being disciplined or
terminated, and if we have broken a law, we may also be personally liable for
that violation.
Initially, all Officers, Foremen/Managers, and Directors will be provided a copy
of the Code of Conduct, and will be asked to confirm that they have read and
understand it. Subsequently, all new Officers, Foremen/Managers, and Directors
will be required to do the same. Following the initial provision and
understanding of the Code, all Officers, Foreman/Managers, and Directors will be
provided with all revisions to the Code and will be required to affirm their
compliance with the code annually. This affirmation will be obtained from a
simple form such as the one provided along with the code.
Each Foreman/Manager is responsible for ensuring that their employees understand
and comply with the Code, for discussing business practice situations with their
employees, and for responding promptly to concerns raised by any employee. Each
Foreman/Manager is responsible for their employees' actions, and is subject to
discipline or dismissal if they participate in, direct, or approve an employee's
improper actions, or are or become aware of such actions and do not act
appropriately to correct them.
We all are also individually responsible for reporting wrongdoing. If a Standard
or law has been broken, report it promptly to the Chief Financial Officer, or
another appropriate Company representative as described below.
2. What should you do if you have a concern about business practices and the
Code?
All Officers, Foremen/Managers, and Directors should report any violation
or suspected violation of this Code to the appropriate person.
The Company's efforts to ensure observance of, and adherence to, the goals
and policies outlined in this Code mandate that Officers, Foreman/Managers, and
Directors bring any instance, occurrence or practice that they, in good faith,
believe is inconsistent with or in violation of this Code to the attention of
the Chief Financial Officer. The following is an approach to dealing with
potential problem situations. At all times maintain a professional demeanor when
dealing with such situations.
o In the event you believe a violation of the Code has occurred, or
you have observed or become aware of conduct which appears to be contrary to the
Code, immediately discuss the situation with your supervisor. If it would be
inappropriate to discuss the issue with this individual, you should contact the
Chief Financial Officer, or the President. These people will promptly listen to
your concerns and assess the situation.
o Every Officer, Foreman/Manager, and Director is expected to become
familiar with and to understand the requirements of the Code. If you become
aware of a suspected violation, do not try to investigate it or resolve it on
your own. Prompt disclosure to the appropriate parties is vital to ensuring a
thorough and timely investigation and resolution. A violation of the Code is a
serious matter and could have legal implications. Allegations of such behavior
are not taken lightly and should not be made to embarrass someone or put him or
her in a false light. Reports of suspected violations should always be made in
good faith.
o No one will be punished for asking about or reporting questionable
conduct. In cases in which an Officer, Foreman/Manager, or Director reports a
suspected violation and is not engaged in the questionable conduct, the Company
will attempt to keep its discussions and actions confidential to the greatest
extent possible. In the course of its investigation, the Company may find it
necessary to share information with others on a "need to know" basis. No
retaliation shall be taken against any individual for reporting questionable
conduct or suspected violations of the Code.
3. Compliance with Laws, Rules, and Regulations
The Company seeks to comply with both the letter and spirit of all
applicable laws and regulations in all countries in which it operates.
The Company is committed to full compliance with the laws of the cities,
states and countries in which it operates. This includes, for example, those
relating to antitrust and promoting fair competition, preventing bribery,
illicit payments and corruption, insider trading, and labor practices, among
others.
4. Corporate Opportunities
Officers, Foreman/Managers, and Directors owe a duty to the Company to
advance its legitimate interests when the opportunity to do so arises.
Examples of prohibited conduct by Officers, Foreman/Managers, and
Directors with respect to corporate opportunities include, but are not limited
to:
o taking for themselves opportunities that are discovered through
the use of corporate property, information, or position;
o Using corporate property, information, or position for personal
gain;
o Competing with the Company.
If an Officer, Foreman/Manager, or Director has any doubt concerning his
or her obligations with respect to any opportunity that presents itself to them,
the individual should seek advice from the Chief Financial Officer.
5. Fair Dealing
Our goal is to be regarded as a company that does business with integrity.
Each Officer, Foreman/Manager, and Director should endeavor to deal fairly
with the Company's customers, suppliers, competitors, and employees. Under
federal and state laws, the Company is prohibited from engaging in unfair
methods of competition, and unfair or deceptive acts and practices. No Officer,
Foreman/Manager, or Director should take unfair advantage of anyone through
manipulation, concealment, abuse of confidential information, misrepresentation
of material facts, or any other unfair-dealing practice.
Examples of prohibited conduct include, but are not limited to:
o Bribery or payments:
o To induce business or breaches of contracts by others;
o To influence judgment or conduct or ensure a desired
outcome or action;
o To win or retain business or influence any act or
decision of a government official
o To gain improper advantage
o Business being conducted with a family member or relative.
o Acquiring a competitor's trade secrets through bribery or
theft;
o Making false, deceptive or disparaging claims or comparisons
about competitors or their products or services;
o Mislabeling products or services; or
o Making affirmative claims about the Company's products and
services without having a reasonable basis for doing so.
In addition, any public statements by or on behalf of the Company should
always be accurate and have a reasonable basis in fact. Public statements may
include such things as advertising, promotional activities and sales
presentations.
6. Compliance with Accounting and Disclosure Control Policy
Our goal is to maintain accurate financial reports, and to keep our investors
informed about the Company.
All Officers, Foreman/Managers, and Directors shall abide by all
Accounting and Disclosure Controls set forth in the policy. (1) This policy is
formulated to ensure that all financial data is properly gathered, tabulated and
reported in the Company's records and that information from all areas of the
Company that might be of interest to investors is forwarded to management for
consideration for inclusion in public disclosure. A standing Disclosure
Committee is established, consisting of officers and managers/foremen, to review
the Company's proposed disclosure, and make any additions or modifications that
each member deems to be of such potential interest. The members also certify
their submissions.
7. Insider Trading
Officers, Foreman/Managers, and Directors should never trade securities on
the basis of confidential information acquired through their Company
relationship.
Federal law and Company policy prohibit Officers, Foremen/Managers, and
Directors, directly or indirectly, from purchasing or selling Company stock
through the use of confidential information concerning the Company. All
non-public information about the Company should be considered confidential
information. No Officer, Foreman/Manager, or Director should buy or sell
"options" in Our stock.
This same prohibition applies to trading in the stock of other publicly
held companies, such as existing or potential customers or suppliers, on the
basis of confidential information. The "tipping" of others who might make an
investment decision on the basis of this information is also illegal.
If you have a question concerning appropriateness or legality of a
particular securities transaction, it is imperative that you consult with the
Company's Chief Financial Officer. (2)
8. Conflicts of Interest
An Officer, Foreman/Manager, or Director should avoid any situation in
which his or her personal interests conflict or might appear to conflict with
the Company's interests.
Officers, Foremen/Managers, and Directors should avoid entering into
situations in which their personal, family, or financial interests may conflict
with those of the Company, unless the potential conflict situation is reviewed
and expressly approved in writing, in advance, by the Board of Directors. The
following are examples of potential conflicts:
o Business is done with a family member or relative.
o An Officer, Foreman/Manager, or Director, or a member of his or
her family, receives personal benefits as a result of his or her position
in the Company including receiving valuable gifts from those seeking to or
doing business with the Company;
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(1) A complete description of the Company's Accounting and Disclosure Control
policy can be obtained from the Company's CFO.
(2) A more complete description of the Company's insider trading compliance
policy can be obtained from the Company's CFO.
o An Officer, Foreman/Manager, or Director takes actions or has
interests that make it difficult to perform his or her Company work
objectively and effectively;
o An Officer, Foreman/Manager, or Director is employed
simultaneously by a competitor, customer, or supplier;
o An Officer, Foreman/Manager, or Director has a financial interest
in a customer, supplier, or competitor that is significant enough to
influence the individual's business conduct. All financial interests in a
customer, supplier, or competitor, other than an open market investment in
publicly traded mutual funds or security equal to less than 5% of the
individual's net worth, must be disclosed to the CEO, upon adoption of
this Code, or before becoming an Officer, Foreman/Manager, or Director and
at all times thereafter. The CEO must approve subsequent proposed
financial interests in a customer, supplier, or competitor greater than
that amount, in advance.
o An Officer, Foreman/Manager, or Director acquires an interest in
property (such as real estate, patent rights, or securities) where the
Company has, or might have, an interest;
o An Officer, Foreman/Manager, or Director divulges or uses the
Company's confidential information - such as technical data or
specifications, financial data, customer information, and computer
programs - for his or her own personal or business purposes.
Directors shall disclose to the Chief Financial Officer or President, and
the Chairman of the Corporate Governance and Nominating Committee any business
relationship with any competitor, customer, or supplier of the company, or any
other potential conflict of interest.
Conflicts are not always clear-cut. If an Officer, Foreman/Manager, or Director
becomes aware of a conflict, potential conflict, or has a question as to a
potential conflict, the employee, officer, or director should consult with
higher levels of management or the Company's Chief Financial Officer and/or
follow the procedures described in Section 17 of the Code. If an Officer,
Foreman/Manager, or Director becomes involved in a situation that gives rise to
an actual conflict, the individual must inform higher levels of management and
the Company's Chief Financial Officer of the conflict.
9. Confidentiality
All confidential information concerning Our Company obtained by Officers,
Foreman/Managers, and Directors is the property of Our Company and must be
protected.
Confidential information includes all non-public information that might be
of use to competitors, or harmful to the Company, its customers, or its
suppliers, if disclosed. Officers, Foreman/Managers ,and Directors must maintain
the confidentiality of such information entrusted to them by the Company, its
customers and its suppliers, except when the Company authorizes disclosure or
when required by law. The obligation to keep this information confidential
applies even to communications with family members.
Examples of confidential information include, but are not limited to: the
Company's trade secrets; business trends and projections; information about
financial performance; new product or marketing plans; research and development
ideas or information; manufacturing processes; information about potential
acquisitions, divestitures and investments; stock splits, public or private
securities offerings or changes in dividend policies or amounts; and existing or
potential major contracts, orders, suppliers, customers or finance sources or
the loss thereof.
The obligations of an Officer, Foreman/Manager, or Director with respect
to confidential information of the Company continue even after their employment
relationship with the Company terminates.
10. Protection and Proper Use of Company Assets
All Officers, Foreman/Managers, and Directors should protect our assets
and ensure their proper use.
Company assets are to be used only for legitimate business purposes of the
Company and only by authorized individuals or their designees. This includes
both tangible and intangible assets. Intangible assets include, but are not
limited to: intellectual property such as trade secrets, patents, trademarks and
copyrights; business, marketing and service plans; engineering and manufacturing
ideas; designs; databases; Company records; salary information; and any
unpublished financial data and reports. Unauthorized alteration, destruction,
use, disclosure, or distribution of these assets violates Company policy and
this Code. Any such action, as well as theft or waste of, or carelessness in
using these assets have a direct adverse impact on the Company's operations and
profitability and will not be tolerated.
The Company provides computers, voice mail, electronic mail (e-mail), and
Internet access to certain individuals for the purpose of achieving the
Company's business objectives. As a result, the Company has the right to access,
reprint, publish, or retain any information created, sent or contained in any of
the Company's computers or e-mail systems of any Company machine. Officers or
Foremen/Managers may not use e-mail, the Internet or voice mail for any illegal
purpose or in any manner that is contrary to the Company's policies or the
standards embodied in this Code.
No Officer, Foreman/Manager, or Director should make copies of, or resell
or transfer (externally or internally), copyrighted publications, including
software, manuals, articles, books, and databases being used in the Company that
were created by another entity and licensed to the Company unless he or she is
authorized to do so under the applicable license agreement or by the "fair use"
doctrine, such as for "backup" purposes. If you should have any question as to
what is permitted in this regard, please consult with the Company's Chief
Financial Officer.
11. Gifts and Gratuities
No Officer, Foreman/Manager, or Director may solicit a gratuity or gift
from an associate or supplier in conjunction with negotiating business on behalf
of the Company. Honorariums given as a part of a scientific award or
presentation are allowed. If a gift is received, unsolicited, use the following
as a guide:
1. If the value of the gift is $100.00 or less, the gift may be kept by
the recipient, and the recipient should acknowledge the gift with a
letter of thanks, with a copy of the letter to the CEO and Chief
Financial Officer.
2. If the value of the gift is more than $100.00 (or appears that it
could be more than $100.00), the recipient should immediately notify
the Chief Financial Officer, and deliver the gift to the company for
appropriate disposition.
Expenses for meals and entertainment as part of a seminar, convention, or
business relationship meeting are not within the definition of gifts for
purposes of this policy.
Gifts to government employees are strictly forbidden by both federal and
state governments. All other Company gifts require the prior approval of
the President or the Chief Financial Officer.
12. Employment Practices
A. Drug/Alcohol-Free Workplace
The Company recognizes the importance of maintaining a safe and healthy
work environment for its staff and visitors. In addition, the federal Drug-Free
Workplace Act of 1988 requires the Company to certify that it will provide a
drug-free workplace and take specific steps to meet the standards of the law.
Being under the influence of any drug and/or alcoholic beverage on the job
creates serious risks to the health and safety of all personnel.
The unlawful manufacture, distribution, dispensation, possession or use of
a controlled substance or illegal drug by any person is prohibited in the
workplace. In addition, no personnel shall report to work or perform any Company
business - including but not limited to the operation of any vehicle on company
business - whose appearance or odor reflects the illegal consumption of
alcoholic beverages or illegal drugs.
Personnel who are found to be in violation of this policy are engaged in
serious misconduct and may be subject to disciplinary action up to and including
discharge.
Further, given reasonable cause* to suspect any person's use of illegal
drugs and/or alcoholic beverages, the Company reserves the right to have such
person tested for such use. The results of such tests shall be used to determine
whether or not a violation of this policy has occurred and may be used to
ascertain the extent of disciplinary action warranted by such violation, when
appropriate. Any person who does not consent to and cooperate fully with the
drug and/or alcohol testing procedure will be in violation of this policy.
* Reasonable cause shall exist if a person has been involved in a
workplace accident or an incident resulting in personal injury or damage to
property, and/or a supervisory employee has a reasonable suspicion that a person
is under the influence or impaired by drugs and/or alcohol based on any
objective symptoms, such as factors related to the person's appearance, speech
and/or other facts.
As a condition of working for the Company, all Personnel will:
(a) abide by the terms of this Drug/Alcohol-Free Workplace Policy, and
(b) notify the Human Resources Office, in writing, of his/her criminal
drug conviction no later than 5 days after such conviction.
For purposes of this policy, "controlled substance" means a controlled
substance in schedules I through V of section 202 of the Controlled Substances
Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11
through 1308.15 and "illegal drug" means any drug (a) which is not legally
obtainable or (b) which is legally obtainable but has not been legally obtained.
The term includes prescribed drugs not legally obtained and prescribed drugs not
being used for prescribed purposes.
B. Equality of Opportunity
The Company is committed to provide equal opportunity throughout the
Company without regard to race, color, age, religion, national origin, height,
weight or sex, and with affirmative action consideration for the handicapped and
Vietnam veterans.
This policy applies to all Officers, Foremen/Managers, and Directors, and
applicants for employment in connection with: hiring, placement, upgrading,
transfer or demotion, recruitment, advertising or solicitation for employment,
rates of pay or other forms of compensation, selection for training and layoff
or termination.
All Officers, Foremen/Managers, and Directors are expected to respect this
Company policy in their daily interactions with other employees, customers,
suppliers, and individuals who have dealings with Our Company.
C. Policy Against Harassment
Our workplace is where we come to achieve and to create, and to be
respected for our achievements and creations. Our will endeavor to provide a
workplace free of the tensions that would be caused by ethnic, sexual, racial,
religious, age-related, or other inappropriate remarks, slurs or jokes as well
as animosity or unwelcome sexual advances or requests for sexual favors.
Harassment can be words or actions that seem to be based on, race, sex,
religion, color, weight, age, national origin, linguistic and language
differences, sexual orientation, socio-economic status, handicap, or veteran
status.
Sexual harassment is a form of sex discrimination that violates Title VII
of the Civil Rights Act of 1964 and includes unwelcome sexual advances, requests
for sexual favors, and other inappropriate verbal or physical conduct of a
sexual nature when submission to or rejection of this conduct explicitly or
implicitly affects an individual's employment, unreasonably interferes with an
individual's work performance or creates an intimidating, hostile or offensive
work environment.
Any individual who alleges harassment by another employee is encouraged to
follow these steps:
o Deal with it directly and inform the harasser that the conduct is
unwelcome and must stop, and
o Contact the Chief Financial Officer and report the complaint.
Complaints of harassment shall be investigated promptly and a
determination will be made from the facts on a case-to-case basis.
Confidentiality shall be maintained to the extent possible for both the
complainant and the accused. A substantiated charge against an employee shall
result in disciplinary action, which may include discharge, of the employee
conducting inappropriate behavior. An employee will not be retaliated against
for bringing inappropriate conduct by others to the Company's attention.
13. Quality and Regulatory Compliance
Our Company is subject to numerous international, federal and state laws. Other
federal agencies also have applicable laws, regulations and guidelines, as do
individual state governments. Our company's policies and procedures are in place
to ensure that our activities are conducted in compliance with the federal and
state laws and regulations.
14. Publication of the Code of Business Conduct and Ethics
A copy of the most current version of the Company's Code of Business
Conduct and Ethics will be maintained in the Company's offices. From time to
time, the Company will sponsor employee-training programs in which the Code and
other Company policies and procedures will be discussed.
16. Waivers of the Code of Business Conduct and Ethics
Any waiver of this Code may be made only by the Board and will be promptly
disclosed to shareholders.
17. Compliance Procedures
The Company has established this Code of Business Conduct and Ethics as
part of its overall policies and procedures. The Code applies to all Company
Officers, Foremen/Managers, and Directors. The Code is based on the Company's
core values, good business practices and applicable law. The existence of a
Code, however, does not ensure that Officers, Foremen/Managers, or Directors
will comply with it or act in a legal and ethical manner. To achieve optimal
legal and ethical behavior, the individuals subject to the Code must know and
understand the Code as it applies to them and as it applies to others. All
Officers, Foremen/Managers, and Directors must champion the Code and assist
others in knowing and understanding it.
o The Corporate Compliance Officer is the Chief Financial Officer.
The Compliance Officer is responsible for communicating, training and monitoring
and overall compliance with the Code. The Compliance Officer will, with the
assistance and cooperation of the Company's executives and managers, foster an
atmosphere where employees are comfortable in communicating and/or reporting
concerns and possible Code violations.
o If any Officers, Foremen/Managers, or Directors believes that a
violation of the Code has occurred or has observed or become aware of conduct
which appears contrary to the Code, the employee or director shall immediately
discuss the situation with a supervisor, officer, the Chief Financial Officer,
or the CEO.
o When an alleged violation of the Code is reported, the Company
shall take prompt and appropriate action in accordance with the law and good
business practices. If the suspected violation appears to involve either a
potentially criminal act or an issue of significant corporate interest, then the
manager or investigator should immediately notify the CHIEF FINANCIAL OFFICER.
If a suspected violation involves any 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,
the manager or investigator should immediately report the alleged violation to
the CEO, or the Chief Financial Officer.
o Disciplinary Actions. A supervisor, after consultation with the
CEO, 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. Such disciplinary action may include the
termination of the employee's employment. Disciplinary action shall be
documented, as appropriate.
o Required Government Reporting. Whenever conduct occurs that
requires a report to the government, the Chief Financial Officer shall be
responsible for complying with such reporting requirements.
o Corrective Actions. In the event of a breach of the Code, the
manager and the Chief Financial Officer should assess the situation to determine
whether the breach is a problem that can be resolved by corrective action. Such
corrective action shall be documented, as appropriate.
ANNUAL CERTIFICATE OF INTEGRITY AND COMPLIANCE
At our Company, we are expected to act with integrity in accordance with our
Code of Conduct, and we quarterly review our activities and certify our
compliance with the Code.
Please answer the following questions and complete the balance of the form.
1) Do you have a copy of, and do you understand, the Code of Conduct?
Yes____ No____
2) Have you conducted our business activities in accordance with the Code
of Conduct?
Yes____ No____
3) Have you complied with all Company internal accounting controls and
procedures?
Yes____ No____
4) Have you been involved in raising, investigating, or resolving a Code
of Conduct issue?
Yes____ No____
5) Do you wish to raise a Code of Conduct issue for corrective action in
this certificate? If so, please describe the issue here.
For questions 1, 2, and 3 if you have answered "no", please provide a detailed
explanation. Do you have any additional comments?
Name:
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