3E Company Environmental Ecological & Engineering ("3E") is committed to maintaining the highest standards of business conduct and ethics. This Code of Business Conduct and Ethics (the "Code") reflects the business practices and principles of behavior that support this commitment. 3E expects every employee, officer and director to read and understand the Code and its application to the performance of his or her business responsibilities. References in the Code to employees are intended to cover officers and, as applicable, directors.
Officers, managers and other supervisors are expected to develop in employees a sense of commitment to the spirit, as well as the letter, of the Code. Supervisors are also expected to ensure that all agents and contractors conform to Code standards when working for or on behalf of 3E. The compliance environment within each supervisor's assigned area of responsibility will be a significant factor in evaluating the quality of that individual's performance. In addition, any employee who makes an exemplary effort to implement and uphold 3E's legal and ethical standards will be recognized for that effort in his or her performance review. Nothing in the Code alters the at-will employment policy of 3E.
The Code addresses conduct that is particularly important to proper dealings with the people and entities with whom 3E interacts, but reflects only a part of its commitment. From time to time 3E may adopt additional policies and procedures with which its employees, officers and directors are expected to comply, if applicable to them. However, it is the responsibility of each employee to apply common sense, together with his or her own highest personal ethical standards, in making business decisions where there is no stated guideline in the Code.
Actions by family members, significant others or other persons who live in the households (referred to in the Code as "family members") of 3E employees, officers and directors also may potentially result in ethical issues to the extent that they involve 3E business. For example, acceptance of inappropriate gifts by a family member of an employee from one of 3E suppliers could create a conflict of interest and result in a Code violation attributable to the employee. Consequently, in complying with the Code, every employee, officer and director should consider not only his or her own conduct, but also that of family members, significant others and other persons who live in the household.
EMPLOYEES SHOULD NOT HESITATE TO ASK QUESTIONS ABOUT WHETHER ANY CONDUCT MAY VIOLATE THE CODE, VOICE CONCERNS OR CLARIFY GRAY AREAS. SECTION 14 BELOW DETAILS THE COMPLIANCE RESOURCES AVAILABLE. IN ADDITION, EMPLOYEES SHOULD BE ALERT TO POSSIBLE VIOLATIONS OF THE CODE BY OTHERS AND REPORT SUSPECTED VIOLATIONS, WITHOUT FEAR OF ANY FORM OF RETALIATION, AS FURTHER DESCRIBED IN SECTION 14. Violations of the Code will not be tolerated. Any employee who violates the standards in the Code may be subject to disciplinary action, which, depending on the nature of the violation and the history of the employee, may range from a warning or reprimand to and including termination of employment and, in appropriate cases, civil legal action or referral for criminal prosecution.
Honest and Ethical ConductIt is the policy of 3E to promote high standards of integrity by conducting its affairs in an honest and ethical manner. The integrity and reputation of 3E depends on the honesty, fairness and integrity brought to the job by each person associated with it. Since corporations can only act through its employees, unyielding personal integrity is the basis of corporate integrity.
Legal ComplianceCompliance with the law, both in letter and in spirit, is the foundation of this Code. 3E's success depends upon each employee's operating within legal guidelines and cooperating with local, national and international authorities. 3E expects employees to understand the legal and regulatory requirements applicable to their business units and areas of responsibility, including, but not limited to, laws prohibiting insider trading. When an employee does not have enough information with regard to laws, rules and regulations, he or she must seek advice from his or her supervisor or the Compliance Officer (as further described in Section 14). Disregard of the law will not be tolerated. Violation of domestic or foreign laws, rules and regulations may subject an individual, as well as 3E, to civil and/or criminal penalties. Conduct and records, including emails, are subject to internal and external audits, and to discovery by third parties in the event of a government investigation or civil litigation. It is in everyone's best interests to know and comply with applicable legal and ethical obligations.
International Business Laws3E's employees are expected to comply with the applicable laws in all countries to which they travel for business purposes, in which 3E operates and where 3E otherwise does business, including laws prohibiting bribery, corruption or the conduct of business with specified individuals, companies or countries. The fact that in some countries certain laws are not enforced or that violation of those laws is not subject to public criticism is not an excuse for noncompliance. In addition, 3E expects employees to comply with U.S. laws, rules and regulations governing the conduct of business outside the U.S. by its citizens and corporations. These U.S. laws, rules and regulations, which may cover 3E activities outside the U.S., include, but are not limited to, the following:
- The Foreign Corrupt Practices Act, which prohibits, among other things, directly or indirectly giving anything of value to a government official to obtain or retain business or favorable treatment, and requires the maintenance of accurate books of account, with all company transactions being properly recorded;
- U.S. Embargoes, which restrict or, in some cases, prohibit companies, their subsidiaries and their employees from doing business with certain other countries identified on a list that changes periodically (including, for example, Angola (partial), Burma (partial), Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria) or specific companies or individuals;
- Export Controls, which restrict travel to designated countries or prohibit or restrict the export of goods, services and technology to designated countries, denied persons or denied entities from the U.S., or the re-export of U.S. origin goods from the country of original destination to such designated countries, denied companies or denied entities; and
- Antiboycott Compliance, which prohibits U.S. companies from taking any action that has the effect of furthering or supporting a restrictive trade practice or boycott that is fostered or imposed by a foreign country against a country friendly to the U.S. or against any U.S. person.
If an employee has a question as to whether an activity is restricted or prohibited, assistance should be sought before taking any action, including giving any verbal assurances that might be regulated by international laws.
Antitrust laws are designed to protect the competitive process. These laws are based on the premise that the public interest is best served by vigorous competition and will suffer from illegal agreements or collusion among competitors. Antitrust laws generally prohibit, among other things:
- agreements, formal or informal, with competitors that harm competition or customers, including price fixing and allocations of customers, territories or contracts;
- agreements, formal or informal, that establish or fix the price at which a customer may resell a product; and
- the acquisition or maintenance of a monopoly or attempted monopoly through anti-competitive conduct.
Certain kinds of information, such as pricing, production and inventory, should not be exchanged with competitors, regardless of how innocent or casual the exchange may be and regardless of the setting, whether business or social.
Antitrust laws impose severe penalties for certain types of violations, including criminal penalties and potential fines and damages, which may be tripled under certain circumstances. Understanding the requirements of antitrust and unfair competition laws of the various jurisdictions where 3E does business can be difficult so employees should seek assistance from their supervisors or the Compliance Officer.
Federal law imposes civil and/or criminal liability on any person or company that contaminates the environment with any hazardous substance that could cause injury to the community or environment. Violation of environmental laws can involve monetary fines, injunctive orders and imprisonment. 3E employees are expected to comply with all applicable environmental laws.
It is 3E's policy to conduct its business in an environmentally responsible way that minimizes environmental impacts. 3E is committed to minimizing and, if practicable, eliminating the use of any substance or material that may cause environmental damage, reducing waste generation and disposing of all waste through legal and responsible methods, minimizing environmental risks by employing safe technologies and operating procedures, and being prepared to respond appropriately to accidents and emergencies.
Conflicts of Interest
3E respects the rights of its employees to manage their personal affairs and investments and do not wish to impinge on their personal lives. At the same time, employees should avoid conflicts of interest that occur when their personal interests may interfere in any way with the performance of their duties or the best interests of 3E. A conflicting personal interest could result from an expectation of personal gain now or in the future or from a need to satisfy a prior or concurrent personal obligation. 3E expects its employees to be free from influences that conflict with the best interests of 3E or might deprive 3E of their undivided loyalty in business dealings. Even the appearance of a conflict of interest where none actually exists can be damaging and should be avoided. Conflicts of interest are prohibited unless specifically authorized as described below.
Any employee with any questions about a potential conflict or who becomes aware of an actual or potential conflict, who is not an officer or director of 3E, should discuss the matter with the Compliance Officer (as further described in Section 14) immediately. Officers and directors should seek authorization from 3E's Audit Committee. Factors that may be considered in evaluating a potential conflict of interest are, among others:
- whether it may interfere with the employee's job performance, responsibilities or morale;
- whether the employee has access to confidential information;
- whether it may interfere with the job performance, responsibilities or morale of others within the organization;
- any potential adverse or beneficial impact on 3E's business;
- any potential adverse or beneficial impact on 3E's relationships with its customers or suppliers or other service providers;
- whether it would enhance or support a competitor's position;
- the extent to which it would result in financial or other benefit (direct or indirect) to the employee;
- the extent to which it would result in financial or other benefit (direct or indirect) to one of 3E's customers, suppliers or other service providers; and
- the extent to which it would appear improper or unethical to an outside observer.
The following are examples of situations that may, depending on the facts and circumstances, involve conflicts of interests – this list is intended to be used for illustrative purposes only and is not intended to be a comprehensive description of the conflicts of interest prohibited by this policy:
- Employment by (including consulting for) or service on the board of a 3E competitor, customer or supplier or other service provider. Activity that enhances or supports the position of a competitor to the detriment of 3E is prohibited, including employment by or service on the board of a competitor. Employment by or service on the board of a customer or supplier or other service provider is generally discouraged and authorization must be received in advance.
- Owning, directly or indirectly, a significant financial interest in any entity that does business, seeks to do business or competes with 3E. In addition to the factors described above, an evaluation of ownership for conflicts of interest will consider the size and nature of the investment; the nature of the relationship between the other entity and 3E; the employee's access to confidential information and the employee's ability to influence 3E decisions. Advance approval of the acquisition of such a financial interest is required.
- Soliciting or accepting gifts, favors, loans or preferential treatment from any person or entity that does business or seeks to do business with 3E. See Section 9 for further discussion of the issues involved in this type of conflict.
- Soliciting contributions to any charity or for any political candidate from any person or entity that does business or seeks to do business with 3E.
- Conducting 3E business transactions with family members or a business in which the employee has a material financial interest. Material related-party transactions approved by the Audit Committee and involving any executive officer or director will be publicly disclosed as required by applicable laws and regulations.
- Exercising supervisory or other authority on behalf of 3E over a co-worker who is also a family member. The employee's supervisor and/or the Compliance Officer will consult with the Human Resources department to assess the advisability of reassignment.
Loans to, or guarantees of obligations of, employees or their family members by 3E could constitute an improper personal benefit to the recipients of these loans or guarantees, depending on the facts and circumstances. The Board of Directors or the Audit Committee must approve all loans and guarantees by 3E in advance.
Maintenance of Corporate Books, Records, Documents and Accounts; Financial Integrity
The integrity of 3E's records depends on the validity, accuracy and completeness of the information supporting the entries to its books of account. Therefore, 3E's corporate and business records must be completed accurately and honestly. The making of false or misleading entries or the omission of necessary entries is strictly prohibited. 3E requires that:
- no entry be made in its books and records that intentionally hides or disguises the nature of any transaction or of any of its liabilities, or misclassifies any transactions as to accounts or accounting periods;
- all transactions be supported by appropriate documentation;
- the terms of sales and other commercial transactions be reflected accurately in the documentation for those transactions and all such documentation be reflected accurately in its books and records;
- employees comply with 3E's system of internal controls; and
- no cash or other assets be maintained for any purpose in any unrecorded or "off-the-books" fund.
3E's accounting records are also relied upon to produce reports for its management, stockholders and creditors, as well as for governmental agencies. Employees who collect, provide or analyze information for or otherwise contribute in any way in preparing or verifying these reports should strive to ensure that 3E's financial disclosure is accurate and transparent and that its reports contain all of the information about 3E that would be important to enable stockholders and potential investors to assess the soundness and risks of its business and finances and the quality and integrity of its accounting and disclosures. In addition:
- no employee may take or authorize any action that would cause 3E's financial records or financial disclosure to fail to comply with generally accepted accounting principles or other applicable laws, rules and regulations;
- all employees must cooperate fully with 3E's Accounting Department, as well as its independent public accountants and counsel, respond to their questions with candor and provide them with complete and accurate information to help ensure that 3E's books and records are accurate and complete; and
- no employee should knowingly make (or cause or encourage any other person to make) any false or misleading statement in any of 3E's reports or knowingly omit (or cause or encourage any other person to omit) any information necessary to make the disclosure in any of 3E's reports accurate in all material respects. Any employee who becomes aware of any departure from these standards has a responsibility to report his or her knowledge promptly to the Compliance Officer or one of the other compliance resources described in Section 14.
3E strives to outperform its competition fairly and honestly. Advantages over its competitors are to be obtained through superior performance of its products and services, not through unethical or illegal business practices. Acquiring proprietary information from others through improper means, possessing trade secret information that was improperly obtained, or inducing improper disclosure of confidential information from past or present employees of other companies is prohibited, even if motivated by an intention to advance 3E's interests. If information is obtained by mistake that may constitute a trade secret or other confidential information of another business, or if there are any questions about the legality of proposed information gathering, the Compliance Officer should be consulted (as further described in Section 14).
Every employee is expected to deal fairly with 3E's customers, suppliers, employees and anyone else with whom he/she has contact in the course of performing his/her job. Employees should be aware that the Federal Trade Commission Act provides that "unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful." It is a violation of the Act to engage in deceptive, unfair or unethical practices, and to make misrepresentations in connection with sales activities. Employees involved in procurement have a special responsibility to adhere to principles of fair competition in the purchase of products and services by selecting suppliers based exclusively on normal commercial considerations, such as quality, cost, availability, service and reputation, and not on the receipt of special favors.
Gifts and Entertainment
Business gifts and entertainment are meant to create goodwill and sound working relationships and not to gain improper advantage with customers or facilitate approvals from government officials. The exchange, as a normal business courtesy, of meals or entertainment (such as tickets to a game or the theatre or a round of golf) is a common and acceptable practice as long as it is not extravagant. Unless express permission is received from a supervisor, the Compliance Officer or Audit Committee, gifts and entertainment cannot be offered, provided or accepted by any employee unless consistent with customary business practices and not (a) of more than token or nominal monetary value, (b) in cash, (c) susceptible of being construed as a bribe or kickback, (d) made or received on a regular or frequent basis or (e) in violation of any laws. This principle applies to 3E business transactions everywhere in the world, even where the practice is widely considered "a way of doing business." Employees should not accept gifts or entertainment that may reasonably be deemed to affect their judgment or actions in the performance of their duties.
Under some statutes, such as the U.S. Foreign Corrupt Practices Act (further described in Section 3), giving anything of value to a government official to obtain or retain business or favorable treatment may be a criminal act subject to prosecution and conviction. Employees should discuss with a supervisor or the Compliance Officer any proposed entertainment or gifts if their appropriateness is in question.
Protection and Proper Use of Company Assets
All employees are expected to protect 3E's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on 3E's profitability. 3E's property, such as office supplies, computer equipment, buildings and products, are expected to be used only for legitimate business purposes, although incidental personal use may be permitted. No employee, however, may use any corporate name, any brand name or trademark owned or associated with 3E or any 3E letterhead stationery for any personal purpose.
No employee, while acting on behalf of 3E or while using its computing or communications equipment or facilities, may either:
- access the internal computer system (also known as "hacking") or other resource of another entity without express written authorization from the entity responsible for operating that resource; or
- commit any unlawful or illegal act, including harassment, libel, fraud, sending of unsolicited bulk email (also known as "spam")
in violation of applicable law, trafficking in contraband of any kind, or espionage. If an employee receives authorization to access another entity's internal computer system or other resource, he/she must make a permanent record of that authorization so that it may be retrieved for future reference, and he/she may not exceed the scope of that authorization. Unsolicited bulk email is regulated by law in a number of jurisdictions. If an employee intends to send unsolicited bulk email to persons outside of 3E, either while acting on 3E's behalf or using its computing or communications equipment or facilities, he/she should contact a supervisor or the Compliance Officer for approval.
One of 3E's most important assets is confidential information. As an employee of 3E, confidential and proprietary information will be acquired. An employee of 3E may learn of information before that information is released to the general public. Employees who have received or have access to confidential information should take care to keep this information confidential. Confidential information may include business, marketing and service plans, financial information, product architecture, source codes, engineering and manufacturing ideas, designs, databases, customer lists, pricing strategies, personnel data, personally identifiable information pertaining to 3E's employees, customers or other individuals (including, for example, names, addresses, telephone numbers and social security numbers), and similar types of information provided to us by its customers, suppliers and partners. This information may be protected by patent, trademark, copyright, trade secret laws or other intellectual property protections.
In addition, because 3E interacts with other companies and organizations, there may be times when employees learn confidential information about other companies before that information has been made available to the public. Such information must be treated in the same manner as 3E's confidential and proprietary information. There may even be times when employees must treat as confidential the fact that 3E has an interest in, or is involved with, another company.
All employees are expected to keep confidential and proprietary information confidential unless and until that information is released to the public through approved channels (usually through a press release, an SEC filing or a formal communication from a member of senior management, as further described in Section 12). Every employee has a duty to refrain from disclosing to any person any confidential or proprietary information about 3E or any other company learned in the course of employment at 3E, until that information is disclosed to the public through approved channels.
This policy requires all employees to refrain from discussing confidential or proprietary information with outsiders and even with other 3E employees, unless those fellow employees have a legitimate need to know the information in order to perform their job duties. Unauthorized use or distribution of such information could also be illegal and result in civil liability and/or criminal penalties.
All employees should also take care not to inadvertently disclose confidential information. Materials that contain confidential information, such as memoranda, notebooks, computer disks and laptop computers should be stored securely. Unauthorized posting or discussion of any information concerning 3E's business, information or prospects on the Internet is prohibited. No employee may discuss 3E's business, information or prospects in any "chat room," regardless of whether the employee uses his/her own name or a pseudonym. Caution should be exercised when discussing sensitive information in public places like elevators, airports, restaurants and "quasi-public" areas within 3E, such as a lunchroom. All 3E emails, voicemails and other communications are presumed confidential and should not be forwarded or otherwise disseminated outside of 3E, except where required for legitimate business purposes.
It is 3E's policy to disclose material information concerning 3E to the public only through specific limited channels to avoid inappropriate publicity and to ensure that all those with an interest in 3E will have equal access to information. All inquiries or calls from the press and industry analysts should be referred to the Vice President, Marketing. 3E designated its marketing and communications relations department as its official spokespersons for marketing, technical and other related information. Unless a specific exception has been made by the CEO or CFO, these designees are the only people who may communicate with the press on behalf of 3E. No other employee may provide any information to the media about 3E off the record, for background, confidentially or secretly.
Any waiver of this Code for executive officers (including, where required by applicable laws, the chief executive officer, the chief financial officer or the controller) or any director may be authorized only by the Board of Directors.
Compliance Standards and Procedures
To facilitate compliance with this Code, 3E implemented a program of Code awareness, training and review. The position of Compliance Officer was established to oversee this program. The Compliance Officer is a person to whom any questions or concerns can be addressed. The Compliance Officer, Kelli Kraus, can be reached at 760-930-6655. In addition to answering questions or concerns with respect to potential issues with or violations of this Code, the Compliance Officer is responsible for:
- Investigating possible violations of the Code;
- training new employees in Code policies;
- conducting annual training sessions to refresh employees' familiarity with the Code;
- distributing copies of the Code annually to each employee with a reminder that each employee is responsible for reading, understanding and complying with the Code;
- updating the Code as needed and alerting employees to any updates, with appropriate approval of the Nominating and Corporate Governance Committee of the Board of Directors, to reflect changes in the law, 3E operations and in recognized best practices, and to reflect 3E experience; and
- otherwise promoting an atmosphere of responsible and ethical conduct.
Each employee's most immediate resource for any matter related to the Code is his/her supervisor. There may, however, be times when an employee prefers not to go to his/her supervisor. In these instances, employees should discuss all concerns with the Compliance Officer.
The EthicsLine, a toll-free help line at 877-573-2084 or 760-602-8880 and EthicsLine@3Ecompany.com, a dedicated email address, are also available to those who wish to ask questions about 3E policy, seek guidance on specific situations or report violations of the Code. An employee may call the toll-free number anonymously if he/she prefers, as it is not equipped with caller identification, although the Compliance Officer will be unable to obtain follow-up details from the employee that may be necessary to investigate the matter. Whether the employee identifies himself/herself or remains anonymous, his/her telephonic or email contact with the EthicsLine will be kept strictly confidential to the extent reasonably possible within the objectives of the Code.
Clarifying Questions and Concerns; Reporting Possible Violations
If an employee encounters a situation or is considering a course of action and its appropriateness is unclear, the matter should be promptly discussed with a supervisor or the Compliance Officer; even the appearance of impropriety can be very damaging and should be avoided.
If an employee is aware of a suspected or actual violation of Code standards by others, he/she has a responsibility to report it. Each employee is expected to promptly provide a compliance resource described in Section 14 above with a specific description of the violation, including any information about the persons involved and the time of the violation. There will be no retaliation against those so reporting. Prompt disciplinary action will be taken against any employee who retaliates against a reporting employee, up to and including termination of employment.
Supervisors must promptly report any complaints or observations of Code violations to the Compliance Officer. If an employee believes his/her supervisor has not taken appropriate action, he/she should contact the Compliance Officer directly. The Compliance Officer will investigate all reported possible Code violations promptly and with the highest degree of confidentiality that is possible under the specific circumstances. Neither an employee nor his/her supervisor may conduct any preliminary investigation, unless authorized to do so by the Compliance Officer. All employees' cooperation in the investigation will be expected. The Compliance Officer may consult with the Human Resources department and/or the Audit Committee of the Board of Directors.
If the investigation indicates that a violation of the Code has probably occurred, appropriate action will be taken expeditiously. Any employee found to have committed code violations will be subject to disciplinary action up to, and including, termination of employment and, in appropriate cases, civil action or referral for criminal prosecution. Appropriate action may also be taken to deter any future Code violations.