Business Ethics Policy
Transgenomic (the "Company") has an excellent reputation of conducting all of
our business according to the highest principles of business ethics. We are
proud of this reputation. We are committed to conducting our business activities
with honesty, and in full compliance with the laws and regulations of the states
and countries in which we do business. We also believe in treating our employees
with the same principles.
As a Transgenomic director, officer or employee (each, an "Associate"), you
should know where we stand on basic ethical issues, so that you can act
accordingly. The following Business Ethics Policy sets down the guidelines for
business conduct at Transgenomic. It is our firm intention that these standards
and rules guide the actions of all Associates. We ask everyone to pledge his or
her support to this important policy.
Statement of Policy
The Transgenomic Code of Business Conduct was prepared to provide Associates,
as well as those with whom we do business and the general public, with a formal
statement of our Company's commitment to the standards and rules of ethical
business conduct. All Associates are expected to review this Code, and in so
doing, agree to comply with its principles. This Code should be considered the
basis on which each Associate conducts business on behalf of Transgenomic, and
is the cornerstone of Transgenomic's ethical business practices.
A code of conduct cannot cover all circumstances or anticipate every
situation. Associates encountering situations not addressed specifically by this
Code should apply the overall philosophy and ethical standards observed by
honorable people everywhere. Situations that are not covered may be reviewed
with your manager, or as appropriate, senior management of the
Company.
Use of Company Funds and Assets
The assets of the Company are to be used solely for the benefit of the
Company and only for valid business purposes. The assets of Transgenomic are
much more than our physical plants, equipment, inventory, company funds, or
office supplies. They include technologies, concepts, business strategies and
plans, financial data, and other information about our business. These assets
may not be improperly used to provide personal gain for Associates or others.
Associates may not transfer any of the assets to other people, except in the
ordinary course of business. On occasion, some assets of the Company no longer
needed in the business may be sold to Associates. Such sales must be supported
by properly approved documentation signed by an appropriate authority other than
the Associate.
Confidential Information
As part of your job, you may have access to confidential information about
Transgenomic, its customers, suppliers and competitors. Until material
information has been made public, this information is not to be disclosed to
coworkers who do not have a business need-to-know, nor to non-Associates
(including former Associates) for any reason except in accordance with
established corporate procedures, which may include confidentiality agreements
when appropriate. Associates may not use confidential information obtained on
the job for personal financial gain through the trading of securities or other
personal financial transactions. "Confidential information" includes information
or data on products, business strategies, company manuals, material, processes,
systems, procedures, etc., as well as all financial data.
If there is any question as to whether information is confidential material
or whether it has been publicly disseminated, Associates should take the
initiative to consult with a Company officer or director prior to initiating any
securities trade, or discussing any significant information with anyone outside
the Company.
Conflicts of Interest (Personal Financial Interests & Outside Activities)
Associates should avoid any outside financial interest that might influence
their work, company decisions or actions. Associates should also avoid outside
employment or activities that materially decreases the performance,
impartiality, judgment, effectiveness, or productivity expected from such
Associate on his or her job. In other words, you should avoid situations in
which your private interests conflict or interfere with your duty to be loyal to
the Company. Conflicts can arise from situations that benefit you directly, or
from situations that have a negative impact on the Company. Examples of
conflicts include the following situations: 1) using your position in the
Company to hire family members or friends, including consultants; 2) making
significant use of Company time or resources for private personal interests such
as surfing the net or doing private mailings for your club; 3) making
significant use of Company time, labs, phones or computers to benefit your
private business interests such as doing private research to invent patents not
related to Company interests, running an outside business, or day trading in
stocks; 4) using your position in the Company to influence purchasing decisions
for businesses you own, or are owned by family members or friends, so that the
Company pays more than from other sources; 5) influencing purchasing decisions
to get event tickets, services or goods for personal consumption; 6) using
Company resources to achieve promotions in professional or other organizations
which are not work-related, 7) a personal or family interest in an enterprise
that has material business dealings (e.g., competitors, supplies, and customers)
with Transgenomic (this restriction does not apply to minimal holdings of the
stock or other securities of a corporation whose shares are publicly traded, and
which may incidentally do business with Transgenomic). These situations are
provided as illustrations, so this list is not complete.
If you are uncertain as to whether you may have a conflict of interest due to
your investments or outside activities, you should consult with your manager,
the Human Resource Department or senior management of the Company If you have a
conflict of interest, or are engaged in a transaction or relationship that could
reasonably be expected to give rise to such a conflict, you must promptly report
the conflict of interest to senior management of the Company. If you are a
member of senior management or the Board of Directors, you may not engage in any
activity giving rise to an actual or potential conflict of interest without the
prior approval of our Audit Committee.
Compliance with Laws
The business of the Company must be conducted in compliance with all
applicable laws, rules and regulations at all federal, state and local levels of
government in the United States and at all levels of government in any non-U.S.
jurisdiction in which we do business. In some cases, the interpretation of laws,
rules and regulations may be difficult, but we have access to legal advice and
will furnish such advice as necessary to enable you to comply with this
policy.
Trading in Company Stock
You may not buy or sell shares of the Company's stock if you are in
possession of material non-public information about the Company. Also, you may
not buy or sell shares of the Company's stock during blackout periods designated
by the Company. More specific information about trading in Company securities is
included in the Company's Policies and Guidelines on Trading, Reporting and
Disclosure.
Dealing With Suppliers and Customers
We obtain and keep our business because of the quality and value of our
products and services, and the respect and confidence we instill in our
customers. Conducting business with suppliers and customers can pose ethical or
even legal problems, especially in cross-border transactions where local laws
and practices may be different from those with which we are familiar. The
following guidelines are intended to help all Associates to make the "right"
decision in potentially difficult situations:
Kickbacks and Rebates
Purchases or sales of goods and services must not lead to Associates or their
families receiving personal kickbacks or rebates. "Kickbacks or rebates" can
take many forms and are not limited to direct cash payments or credits. In
general, if the Associate stands to gain personally through the transaction, it
is prohibited. Such practices are not only unethical, but in many cases, are
illegal.
Air travel miles and other travel award programs attributed to Associate
business travel are an acceptable personal reward for the inconvenience of
travel, as mentioned in the Transgenomic Travel
Policy.
Reciprocity
In many instances, Transgenomic purchases goods or services from a supplier
who also buys goods or services from us. This practice is normal and acceptable,
but any form of pressure for reciprocity with that supplier is not. Suppliers
must not be asked to buy our products or services in order to become or continue
to be a supplier to Transgenomic.
Gifts or Gratuities
Associates or any member of an Associate's immediate family may not accept
gifts of money under any circumstances, nor may they solicit non-monetary gifts,
gratuities, or any other personal benefit or favor of any kind from suppliers or
customers. Associates and members of their family may accept unsolicited,
non-monetary gifts from a business firm or individual doing or seeking to do
business with Transgenomic only if:
(1) the gift is of nominal value; or (2) the gift is primarily of an
advertising or promotional nature. Gifts of more than nominal value may be
accepted if protocol, courtesy or other special circumstances exist, as
sometimes happens with international transactions. However, all such gifts must
be reported to your manager, Controller or the Human Resource Department who
will determine if the Associate may keep the gift, return it, or whether it
should more appropriately become Company property.
Entertainment
From time to time, Associates may offer or accept entertainment, but only if
the entertainment is reasonable, occurs infrequently, and does not involve
lavish expenditures. Offering or accepting entertainment, that is not a
reasonable adjunct to a business relationship, but is primarily intended to gain
favor or influence, should be avoided.
Payments to Agents, Representatives or Consultants
Agreements with agents, sales representatives, or consultants must be in
writing in corporate standard format, and must clearly and accurately set forth
the services to be performed, the basis for earning the commission or fee
involved, and the applicable rate or fee. Any such payments must be reasonable
in amount, not excessive in light of the practice in the trade, and commensurate
with the value of the services rendered. The agent, sales representative or
consultant must be advised that the agreement may be publicly disclosed and must
agree to such public disclosure. In some countries, local laws may prohibit the
use of agents or limit the rate of commissions or fees.
Payments to Government Employees
Payments of money, gifts, services, entertainment or anything of value may
not be offered or made available, directly or indirectly, to any government
official or employee in any country where such payments are illegal or are not
customary. Such payments or offers are never legal in the United States. Such
payments should not be made in other countries, even if legal there, if they are
in violation of U.S. laws, regardless of the nationality of the
recipient.
Other Improper Payments
Payments or offer of benefit of any kind other than those included in
standard marketing policies of the Company may not be made to customers or
prospective customers as an inducement for them to buy our products. Only
inducements specified in Transgenomic's marketing policies and available to all
customers in similar circumstances on an equal basis may be offered by
Transgenomic's Associates. The use of Transgenomic's funds or assets for any
unlawful or unethical purpose is strictly prohibited. Any payment which is
improper when made by a Transgenomic Associate is likewise improper if made by a
commissioned agent, consultant, or other third party on behalf of Transgenomic,
where Transgenomic knows or has reason to know that the payment to a third party
is for any purpose other than that disclosed on the payment documentation.
Sales must not be billed at prices, which exceed Transgenomic's normal prices
for the product and level of distribution involved, to avoid questions of
overbilling and possible rebates.
Books and Records
Falsification of Records
No fraudulent, false or artificial entries shall be made in any of the books
or records of the Company nor in any public record for any reason, nor should
permanent entries in the Company's records be altered in any way. No payment or
receipt on behalf of Transgenomic may be approved or made with the intention or
understanding that any part of the payment or receipt is to be used for a
purpose other than that described in the documents supporting the transaction.
"Slush funds" or similar off-book accounts, where there is no accounting for
receipts or expenditures on corporate books, are strictly prohibited. (Reserves
for contingencies accounted for on the books are not considered slush funds.) In
some countries in which Transgenomic does business, certain discretionary funds
are permitted or even encouraged by local law and custom and are in accordance
with local practice. Such funds in those countries may be established only with
the prior approval of the CEO of Transgenomic.
Retention of Records
Disposal or destruction of the Company's records and files is not
discretionary with any Associate, including the originator of such records.
Legal and regulatory practice requires the retention of certain records for
various periods of time, particularly in the tax, personnel, health and safety,
environment, contract, and corporate structure areas. In addition, when
litigation or a government investigation or audit is pending or imminent,
relevant records must not be destroyed until the matter is closed. Destruction
of records to avoid disclosure in a legal proceeding may constitute a criminal
offense.
Disclosures in Reports and Documents
It is important that you provide your constituents with information that is
accurate, complete, objective, relevant, timely and understandable. In
particular, if you are the Company's Chief Executive Officer, Chief Financial
Officer, Controller, Chief Accounting Officer or a person performing similar
functions, you must do your best to ensure that reports and documents filed with
or submitted to the Securities and Exchange Commission and/or Nasdaq, or
otherwise publicly communicated by the Company, contain full, fair, accurate,
timely and understandable disclosure. If any Associate becomes aware that any
information contained in such reports or publicly communicated by the Company is
materially false or misleading or omits material information, you must promptly
disclose that fact to either the Chairman of the Audit Committee, the Chairman
of the Disclosure Committee or the Chairman of the Board of Directors in
accordance with the Company's procedures for the receipt, retention and
treatment of complaints and concerns regarding accounting, internal control or
auditing matters. Such reports may be made on an anonymous basis via the hotline
described below.
Competitive Practices
Communications With Competitors
It is not illegal and may be appropriate for representatives of Transgenomic
and its competitors to meet and talk from time to time. In such conversations,
you should scrupulously avoid comment on such topics as pricing, production
levels, marketing methods, inventories, product development, sales territories
and goals, non-public market studies, and any proprietary or confidential
information. Discussions regarding customers must be limited to the exchange of
credit information. If your job at Transgenomic brings you into contact with
customers, competitors, or suppliers on a regular basis, you should be familiar
with any antitrust issues that affect Transgenomic and consult with
Transgenomic's legal counsel whenever questions arise that may involve antitrust
implications.
Information About Competitors
As a business that competes in the marketplace, we seek economic knowledge
about our competitors. However, we will not engage in illegal or improper acts
to acquire a competitor's trade secrets, customer lists, and information about
company facilities, technical developments or operations. In addition, we will
not hire a competitor's employees for the purpose of obtaining confidential
information, or urge competitors' personnel, customers, or suppliers to disclose
confidential information, nor shall we seek such information from competitors'
employees subsequently hired by Transgenomic.
Political Activities and Contributions
Transgenomic encourages each of its Associates to be good citizens and to
fully participate in the political process, but Associates who participate in
partisan political activities must make every effort to ensure that they do not
create the impression that they speak or act on behalf of Transgenomic.
Associates in the United States are reminded that U.S. law and the statutes of
most states prohibit Transgenomic from contributing to political candidates,
political parties, or party officials, except through approved methods such as
Political Action Committees. Transgenomic Associates visiting or residing in a
country other than their home country should refrain from any political
activities associated with that country.
Safety, Health and Environment
Transgenomic is committed to providing a safe and healthy work place for our
Associates and for visitors to our premises. We are equally committed to
preventing deterioration of the environment and minimizing the impact of our
operations on the land, air and water. These commitments can only be met through
the awareness and cooperation of all Transgenomic Associates. We each have a
responsibility to abide by safe operating procedures, to guard our own and our
fellow Associate's health, to maintain and utilize pollution control systems,
and to follow safe and sanitary procedures for the disposition of industrial and
hazardous waste materials. Specific rules and instructions in each of these
areas are published and posted in various places throughout the Company's
facilities, and it is the responsibility of each Associate to become familiar
with them and to observe them.
In the U.S. and many other countries in which Transgenomic operates,
regulatory agencies exist under federal, state or local jurisdiction to ensure
compliance with safety, health and environmental protection laws and
regulations. It is Transgenomic's policy to comply with both the letter and the
spirit of the laws and regulations imposed by these agencies, and to attempt to
develop a cooperative attitude with inspection and enforcement personnel from
the agencies. In keeping with this spirit, Associates are encouraged to report
to their managers, conditions that they perceive to be unsafe, unhealthy or
hazardous to the environment.
Dealing With Each Other
Transgenomic is committed to maintaining a positive constructive working
environment where all Associates may pursue personal career satisfaction. We
will not tolerate harassment based on race, color, religion, sex, national
origin, age, physical or mental disability, status as a special disabled veteran
or veteran of the Vietnam era, or any other protected characteristic afforded
protection under United States, state, municipal or local law. These forms of
harassment not only violate Company policy but also are illegal. Regardless of
the existence of such laws in any country, discrimination or harassment against
any person by another will not be tolerated.
Drugs
The use of intoxicating, addictive or illegal drugs on the job or on
Transgenomic's premises is prohibited. Use of prohibited substances off the job
or off of Transgenomic's premises may also be the subject of corrective action
if such use impairs the job performance of an Associate, the reputation of the
Company, or endangers the health or safety of other
Associates.
Implementation
This Business Ethics Policy outlines the way we want to treat others, as well
as the way we want to be treated. All Associates receive a copy of this policy
and are expected to adhere to it. You are encouraged to consult with your
manager, or as appropriate, senior management of the Company prior to taking any
action whenever the proper course of conduct is in doubt. Any failure to adhere
to this policy may result in disciplinary action, up to and including
termination of employment.
Transgenomic Associates
All Associates are expected to report violations of this policy. Such
violations of this policy or any other inappropriate activity in the workplace
may be reported to any member of management, or via the anonymous and
confidential reporting system maintained by the Company. The specific procedures
for making such an anonymous and confidential report will be periodically
communicated to all employees, and will be continually posted for employee
access. The Company's Vice-President and General Counsel or the Corporate
Secretary shall be responsible for receiving and investigating the anonymous
reports. They, along with the Audit Committee as it deems appropriate, will
timely investigate the allegations, and document their findings and conclusions.
The executive officers of the Company will take action as directed by the Audit
Committee.
Failure to report any violations of this policy, failure to cooperate with
any investigation of any alleged violation of this policy or the submission of
information that is known to be false in response to an investigation of any
alleged violation of this policy is, in itself, a violation of this policy.
Reprisal action against any Associate or other person who in good faith
reports suspected violation of this policy is not permitted, and any such
reprisal actions will be deemed a violation of this policy.
Officers and Managers
All officers and managers are responsible for ensuring this policy is used to
guide the actions of Associates. They are also responsible for investigating any
alleged violations of the policy.
Board of Directors
The Board of Directors of Transgenomic believes management is conducting
business in accordance to this policy. The Board upon notification of willful
violations of the policy shall assure that violations will be addressed, that
the legal rights of individuals are protected, the Company's legal obligations
are fulfilled, and that proper corrective action is taken. The Board will
further see that measures are put into place to prevent recurrence of
violations.
Waivers of the Policy
Any waiver of the policies set forth herein for executive officers or
directors may be made only by the Board of Directors and must be promptly
disclosed to shareholders as required by law or Nasdaq listing standards.
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