SURNA : Web, Mobile and Social Games
Code of Ethics
TOPICS
1.Statement of Policy
2.Implementation and Enforcement
3.Relations with Competitors and Other Third Parties
4.Insider Trading, Securities Compliance and Public Statements
5.Financial Reporting
6.Human Resources
7.Environmental, Health and Safety
8.Conflicts of Interest
9.International Trade
10.Government Relations
11.Contractors, Consultants, and Temporary Workers
12. Conclusion
1. STATEMENT OF POLICY
The Company has adopted eight Corporate Values (Focus, Respect, Excellence, Accountability, Teamwork, Integrity, Very Open Communications and Enjoying Our Work) to provide a framework for all employees in conducting ourselves in our jobs. These policies are not intended to substitute for those Values, but will serve as guidelines in helping you to conduct the Company’s business in accordance with our Values. Compliance requires meeting the spirit, as well as the literal meaning, of the law, the policies and the Values. It is expected that you will use common sense, good judgment, high ethical standards and integrity in all your business dealings.
If you encounter a situation you are not able to resolve by reference to these policies, ask for help. Contact Richard Clarke, Chief Executive Officer, who has been identified as responsible for overseeing compliance with these policies.
Violations of the law or the Company’s policies will subject employees to disciplinary action, up to and including termination of employment. In addition, individuals involved may subject themselves and the Company to severe penalties including fines and possible imprisonment. Compliance with the law and high ethical standards in the conduct of Company business should be a top priority for each employee, officer and director.
2. IMPLEMENTATION AND ENFORCEMENT
Richard Clarke, our Chief Executive Officer, has been appointed as Compliance Officer of the Company, responsible for overseeing compliance with, and enforcement of, all Company policies.
Employees are expected to be familiar with these policies as they apply to their duties. They should consult with their managers if they need assistance in understanding or interpreting these policies. Each employee is required to follow these policies and to comply with their terms. A refusal by any employee to agree to be bound by these policies shall be grounds for discipline up to and including dismissal.
Any employee who, in good faith, has reason to believe a Company operation or activity is in violation of the law or of these policies must call the matter to the attention of Richard Clarke, our Chief Executive Officer. All reports will be reviewed and investigated and as necessary under the circumstances, and the reporting employee should provide sufficient information to enable a complete investigation to be undertaken.
Any employee who makes an allegation in good faith reasonably believing that a person has violated these policies or the law, will be protected against retaliation.
3. RELATIONS WITH COMPETITORS AND OTHER THIRD PARTIES
The Company’s policy is to comply fully with competition and antitrust laws throughout the world. These laws generally prohibit companies from using illegal means to maintain, obtain or attempt to obtain a monopoly in a market. They also prohibit companies from engaging in unfair trade practices. “Unfair trade practices” include fixing prices, dividing markets, agreeing with competitors not to compete, or agreeing to boycott certain customers. It is advised that you consult with the Richard Clarke before attending a meeting with a party who may be viewed as a competitor.
4. INSIDER TRADING, SECURITIES COMPLIANCE AND PUBLIC STATEMENTS
Securities laws prohibit anyone who is in possession of material, non-public information (“Insider Information”) about a company from purchasing or selling stock of that company, or communicating the information to others. Information is considered “material” if a reasonable investor would consider it to be important in making a decision to buy or sell that stock. Some examples include financial results and projections, new products, acquisitions, major new contracts or alliances prior to the time that they are publicly announced. Employees who become aware of such Inside Information about the Company must refrain from trading in the shares of the Company until the Inside Information is publicly announced.
Employees must also refrain from disclosing that information to persons who do not have a Company need to know, whether they are inside the Company or outside, such as spouses, relatives or friends.
The Company makes regular formal disclosures of its financial performance and results of operations to the investment community. We also regularly issue press releases. Other than those public statements, which go through official Company channels, employees are prohibited from communicating outside the Company about the Company’s business, financial performance or future prospects. Such communications include questions from securities analysts, reporters or other news media, but also include seemingly innocent discussions with family, friends, neighbors or acquaintances.
5. FINANCIAL REPORTING
The Company is required to maintain a variety of records for purposes of reporting to the government. The Company requires all employees to maintain full compliance with applicable laws and regulations requiring that its books of account and records be accurately maintained. Specifics of these requirements are available from Richard Clarke.
6. HUMAN RESOURCES
The Company is committed to providing a work environment that is free from unlawful harassment and discrimination, and respects the dignity of its employees. The Company has policies covering various aspects of its relationship with its employees, as well as employees’ relationships with each other. For more detailed information, you should consult Richard Clarke. Each employee is expected to be familiar with these policies and to abide by them.
7. ENVIRONMENTAL, HEALTH AND SAFETY
The Company is committed to protecting the health and safety of our employees, as well as the environment in general. The Company expects employees to obey all laws and regulations designed to protect the environment, and the health and safety of our employees, and to obtain and fully observe all permits necessary to do business.
At the very least, all employees should be familiar with and comply with safety regulations applicable to their work areas. The Company will make, to the extent possible, reasonable accommodations for the known physical or mental limitations of our employees. Employees who require an accommodation should contact Richard Clarke. The Company will then engage in an interactive process to determine what reasonable accommodations may exist.
8. CONFLICTS OF INTEREST
Each employee is expected to avoid any activity, investment or association that interferes with the independent exercise of his or her judgment in the Company’s best interests (“Conflicts of Interest”). Conflicts of Interest can arise in many situations. They occur most often in cases where the employee or the employee’s family obtains some personal benefit at the expense of the Company’s best interests.
No employee, or any member of employee’s immediate family, shall accept money, gifts of other than nominal value, unusual entertainment, loans, or any other preferential treatment from any customer or supplier of the Company where any obligation may be incurred or implied on the giver or the receiver or where the intent is to prejudice the recipient in favor of the provider. Likewise, no employee shall give money, gifts of other than nominal value, unusual entertainment or preferential treatment to any customer or supplier of the Company, or any employee or family members thereof, where any obligation might be incurred or implied, or where the intent is to prejudice the recipient in favor of the Company. No such persons shall solicit or accept kickbacks, whether in the form of money, goods, services or otherwise, as a means of influencing or rewarding any decision or action taken by a foreign or domestic vendor, customer, business partner, government employee or other person whose position may affect the Company’s business.
No employee shall use Company property, services, equipment or business for personal gain or benefit.
Employees may not: (1) act on behalf of, or own a substantial interest in, any company or firm that does business, or competes, with the Company; (2) conduct business on behalf of the Company with any company or firm in which the employee or a family member has a substantial interest or affiliation. Exceptions require advance written approval from the Legal Department.
Employees should not create the appearance that they are personally benefitting in any outside endeavor as a result of their employment by the Company, or that the Company is benefitting by reason of their outside interests. Any employee who is not sure whether a proposed action would present a conflict of interest or appear unethical should consult with Richard Clarke.
9. INTERNATIONAL TRADE
The Company must comply with a variety of laws around the world regarding its activities. In some cases, the law prohibits the disclosure of information, whether the disclosure occurs within the U.S. or elsewhere, and whether or not the disclosure is in writing.
Payments or gifts to non-U.S. government officials are prohibited by law and by Company policy. The Foreign Corrupt Practices Act precludes payments to non-U.S. government officials for the purpose of obtaining or retaining business, even if the payment is customary in that country. This law applies anywhere in the world to U.S. citizens, nationals, residents, businesses or employees of U.S. businesses. Because Surna Inc. is a U.S. company, this law applies to the Company and all of its subsidiaries. Any questions on this policy should be directed to Richard Clarke.
10. GOVERNMENT RELATIONS
The Company is prohibited by law from making any contributions or expenditures in connection with any U.S. national election. This includes virtually any activity that furnishes something of value to an election campaign for a federal office. Use of the Company’s name in supporting any political position or ballot measure, or in seeking the assistance of any elected representative, requires the specific approval of the Chairman and Chief Executive Officer of the Company. Political contributions or expenditures are not to be made out of Company funds in any foreign country, even if permitted by local law, without the consent of the Company’s Chairman and Chief Executive Officer.
U.S. law also prohibits giving, offering, or promising anything of value to any public official in the U.S. or any foreign country to influence any official act, or to cause an official to commit or omit any act in violation of his or her lawful duty. Company employees are expected to comply with these laws.
11. VENDORS, CONTRACTORS, CONSULTANTS AND TEMPORARY WORKERS
Vendors, contractors, consultants or temporary workers who are acting on the Company’s behalf, or on Company property, are expected to follow the law, Company policies and honor Company Values. Violations will subject the person or firm to sanctions up to and including loss of the contract, contracting or consulting agreement, or discharge from temporary assignment.
12. CONCLUSION
This Code of Ethics is not intended to cover every possible situation in which you may find yourself. It is meant to give you the boundaries within which the Company expects you to conduct yourself while representing Surna Inc. You may find yourself in a situation where there is no clear guidance given by this Code of Ethics. If that occurs, return to the foundations stated earlier: common sense, good judgment, high ethical standards and integrity. And refer to the Company’s Values. In addition, there are many resources upon which you may rely: your management chain, Human Resources, Legal or other Surna Inc. departments, and the CEO. Together we can continue to make Surna Inc. a company that sets a standard for managing real estate companies.
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Employee
VALUES
FOCUS We exist only because we are developing software products and associated websites (surna.com and surna.org).
RESPECT We value all people, treating them with dignity at all times.
EXCELLENCE We strive for “Best in Class” in everything we do.
ACCOUNTABILITY We do what we say we will do and expect the same from others.
TEAMWORK We believe that cooperative action produces superior results.
INTEGRITY We are honest with ourselves, each other, our customers, our partners and our shareholders
VERY OPEN COMMUNICATION We share information, ask for feedback, acknowledge good work, and encourage diverse ideas.
ENJOYING OUR WORK We work hard, are rewarded for it, and maintain a good sense of perspective, humor and enthusiasm.
Reportable Violations - Anonymous Reporting Program
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•Accounting Error
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•Accounting Omissions
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•Accounting Misrepresentations
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•Auditing Matters
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•Compliance/Regulation Violations
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•Corporate Scandal
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•Domestic Violence
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•Discrimination
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•Embezzlement
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•Environmental Damage
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•Ethics Violation
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•Fraud
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•Harassment
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•Industrial Accidents
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•Misconduct
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•Mistreatment
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•Poor Customer Service
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•Poor Housekeeping
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•Sabotage
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•Securities Violation
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•Sexual Harassment
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•Substance Abuse
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•Theft
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•Threat of Violence
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•Unfair Labor Practice
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•Unsafe Working Conditions
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•Vandalism
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•Waste
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•Waste of Time and Resources
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•Workplace Violence
Charter
AUDIT COMMITTEE
Committee Role
The committee's role is to act on behalf of the board of directors and oversee all material aspects of the company's reporting, control, and audit functions, except those specifically related to the responsibilities of another standing committee of the board. The audit committee's role includes a particular focus on the qualitative aspects of financial reporting to shareholders and on company processes for the management of business/financial risk and for compliance with significant applicable legal, ethical, and regulatory requirements.
In addition, the committee responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) establishing internal financial controls; (5) engaging outside advisors; and, (6) funding for the outside auditor and any outside advisors engagement by the audit committee.
The role also includes coordination with other board committees and maintenance of strong, positive working relationships with management, external and internal auditors, counsel, and other committee advisors.
Committee Membership
The committee shall consist of the entire board directors. The committee shall have access to its own counsel and other advisors at the committee's sole discretion.
Committee Operating Principles
The committee shall fulfill its responsibilities within the context of the following overriding principles:
(1) Communications - The chairperson and others on the committee shall, to the extent appropriate, have contact throughout the year with senior management, other committee chairpersons, and other key committee advisors, external and internal auditors, etc., as applicable, to strengthen the committee's knowledge of relevant current and prospective business issues.
(2) Committee Education/Orientation - The committee, with management, shall develop and participate in a process for review of important financial and operating topics that present potential significant risk to the company. Additionally, individual committee members are encouraged to participate in relevant and appropriate self-study education to assure understanding of the business and environment in which the company operates.
(3) Annual Plan - The committee, with input from management and other key committee advisors, shall develop an annual plan responsive to the "primary committee responsibilities" detailed herein. The annual plan shall be reviewed and approved by the full board.
(4) Meeting Agenda - Committee meeting agendas shall be the responsibility of the committee chairperson, with input from committee members. It is expected that the chairperson would also ask for management and key committee advisors, and perhaps others, to participate in this process.
(5) Committee Expectations and Information Needs - The committee shall communicate committee expectations and the nature, timing, and extent of committee information needs to management, internal audit, and external parties, including external auditors. Written materials, including key performance indicators and measures related to key business and financial risks, shall be received from management, auditors, and others at least one week in advance of meeting dates. Meeting conduct will assume board members have reviewed written materials in sufficient depth to participate in committee/board dialogue.
(6) External Resources -The committee shall be authorized to access internal and external resources, as the committee requires, to carry out its responsibilities.
(7) Committee Meeting Attendees - The committee shall request members of management, counsel, internal audit, and external auditors, as applicable, to participate in committee meetings, as necessary, to carry out the committee responsibilities. Periodically and at least annually, the committee shall meet in private session with only the committee members. It shall be understood that either internal or external auditors, or counsel, may, at any time, request a meeting with the audit committee or committee chairperson with or without management attendance. In any case, the committee shall meet in executive session separately with internal and external auditors, at least annually.
(8) Reporting to the Board of Directors - The committee, through the committee chairperson, shall report periodically, as deemed necessary, but at least semi-annually, to the full board. In addition, summarized minutes from committee meetings, separately identifying monitoring activities from approvals, shall be available to each board member at least one week prior to the subsequent board of directors meeting.
(9) Committee Self Assessment - The committee shall review, discuss, and assess its own performance as well as the committee role and responsibilities, seeking input from senior management, the full board, and others. Changes in role and/or responsibilities, if any, shall be recommended to the full board for approval.
Meeting Frequency
The committee shall meet at least three times quarterly. Additional meetings shall be scheduled as considered necessary by the committee or chairperson,
Reporting to Shareholders
The committee shall make available to shareholders a summary report on the scope of its activities. This may be identical to the report that appears in the company's annual report.
Committee's Relationship with External and Internal Auditors
(1) The external auditors, in their capacity as independent public accountants, shall be responsible to the board of directors and the audit committee as representatives of the shareholders.
(2) As the external auditors review financial reports, they will be reporting to the audit committee. They shall report all relevant issues to the committee responsive to agreed-on committee expectations. In executing its oversight role, the board or committee should review the work of external auditors.
(3) The committee shall annually review the performance (effectiveness, objectivity, and independence) of the external and internal auditors. The committee shall ensure receipt of a formal written statement from the external auditors consistent with standards set by the Independent Standards Board and the Securities and Exchange Commission. Additionally, the committee shall discuss with the auditor relationships or services that may affect auditor objectivity or independence. If the committee is not satisfied with the auditors' assurances of independence, it shall take or recommend to the full board appropriate action to ensure the independence of the external auditor.
(4) The internal audit function shall be responsible to the board of directors through the committee.
(5) If either the internal or the external auditors identify significant issues relative to the overall board responsibility that have been communicated to management but, in their judgment, have not been adequately addressed, they should communicate these issues to the committee chairperson.
(6) Changes in the directors of internal audit or corporate compliance shall be subject to committee approval.
Primary Committee Responsibilities
Monitor Financial Reporting and Risk Control Related Matters
The committee should review and assess:
(1) Risk Management - The company's business risk management process, including the adequacy of the company's overall control environment and controls in selected areas representing significant financial and business risk.
(2) Annual Reports and Other Major Regulatory Filings - All major financial reports in advance of filings or distribution.
(3) Internal Controls and Regulatory Compliance - The company's system of internal controls for detecting accounting and reporting financial errors, fraud and defalcations, legal violations, and noncompliance with the corporate code of conduct.
(4) Internal Audit Responsibilities - The annual audit plan and the process used to develop the plan. Status of activities, significant findings, recommendations, and management's response.
(5) Regulatory Examinations - SEC inquiries and the results of examinations by other regulatory authorities in terms of important findings, recommendations, and management's response.
(6) External Audit Responsibilities - Auditor independence and the overall scope and focus of the annual/interim audit, including the scope and level of involvement with unaudited quarterly or other interim-period information.
(7) Financial Reporting and Controls - Key financial statement issues and risks, their impact or potential effect on reported financial information, the processes used by management to address such matters, related auditor views, and the basis for audit conclusions. Important conclusions on interim and/or year-end audit work in advance of the public release of financials.
(8) Auditor Recommendations - Important internal and external auditor recommendations on financial reporting, controls, other matters, and management's response. The views of management and auditors on the overall quality of annual and interim financial reporting.
The committee should review, assess, and approve:
(1) The code of ethical conduct.
(2) Changes in important accounting principles and the application thereof in both interim in and annual financial reports.
(3) Significant conflicts of interest and related-party transactions.
(4) External auditor performance and changes in external audit firm (subject to ratification by the full board).
(5) Internal auditor performance and changes in internal audit leadership and/or key financial management.
(6) Procedures for whistle blowers.
(7) Pre-approve allowable services to be provided by the auditor.
(8) Retention of complaints.
Charter
DISCLOSURE COMMITTEE
Disclosure Policy
All financial disclosures made by the Corporation to its security holders or the investment community should (i) be accurate, complete and timely, (ii) fairly present, in all material respects, the Corporation’s financial condition, results of operations and cash flows, and (iii) meet any other legal, regulatory or stock exchange requirements.
Committee Purpose
The Corporation’s Disclosure Committee (the “Committee”) shall assist the Corporation’s officers and directors (collectively, the “Senior Officers”) fulfilling the Corporation’s and their responsibilities regarding (i) the identification and disclosure of material information about the Corporation and (ii) the accuracy, completeness and timeliness of the Corporation’s financial reports.
Responsibilities
Subject to the supervision and oversight of Senior Officers, the Committee shall be responsible for the following tasks:
- Review and, as necessary, help revise the Corporation’s controls and other procedures (“Disclosure Controls and Procedures”) to ensure that (i) information required by the Corporation to be disclosed to the Securities and Exchange Commission (the “SEC”), and other written information that the Corporation will disclose to the public is recorded, processed, summarized and reported accurately and on a timely basis, and (ii) such information is accumulated and communicated to management, including the Senior Officers, as appropriate to allow timely decisions regarding required disclosure.
- Assist in documenting, and monitoring the integrity and evaluating the effectiveness of, the Disclosure Controls and Procedures.
- Review the Corporation’s (i) Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, proxy statement, material registration statements, and any other information filed with the SEC (collectively, the “Reports”), (ii) press releases containing financial information, earnings guidance, forward-looking statements, information about material transactions, or other information material to the Corporation’s security holders, (iii) correspondence broadly disseminated to shareholders, and (iv) other relevant communications or presentations (collectively, the “Disclosure Statements”).
- Discuss information relative to the Committee’s responsibilities and proceedings, including (i) the preparation of the Disclosure Statements and (ii) the evaluation of the effectiveness of the Disclosure Controls and Procedures.
Other Responsibilities
The Committee shall have such other responsibilities, consistent with the Committee’s purpose, as any Senior Officer may assign to it from time to time.
Disclosure Control Considerations
The Committee shall base the review and revision of the Disclosure Controls and Procedures on the following factors:
- Control Environment: The directives of the Board and Audit Committee; the integrity and ethical values of the Corporation’s officers and employees, including the “tone at the top”; the Corporation’s Code of Conduct; and the philosophy and operating style of management, including how employees are organized and how authority is delegated.
- Risk Assessment: The identification and analysis of relevant risks to achieving the goal of accurate and timely disclosure, forming a basis for determining how the risks should be managed.
- Control Activities: The procedures to ensure that necessary actions are taken to address and handle risks to achievement of objectives.
- Information and Communication: The accumulation, delivery and communication of financial information throughout (i.e., up, down and across) the organization.
- Monitoring: The assessment of the quality of the financial reporting systems over time through ongoing monitoring and separate evaluations, including through regular management supervision and reporting of deficiencies upstream.
Organization
The members of the Committee will be comprised of the Corporation’s officers and directors.
The Committee may designate two or more individuals, at least one of whom shall be knowledgeable about financial reporting and another about law, who can, acting together, review Disclosure Statements when time does not permit full Committee review.
The Senior Officers at their option may, at any time and from time to time, assume any or all of the responsibilities of the Disclosure Committee identified in this Charter, including, for example, approving Disclosure Statements when time does not permit the full Committee (or the designated individuals) to meet or act.
Chair
The Chief Financial Officer of the Corporation shall act as the Chair of the Committee (unless and until another member of the Committee shall be so appointed by any Senior Officer).
Meetings and Procedures
The Committee shall meet or act as frequently and as formally or informally as circumstances dictate to (i) ensure the accuracy, completeness and timeliness of the Disclosure Statements and (ii) evaluate the Disclosure Controls and Procedures and determine whether any changes to the Disclosure Controls and Procedures are necessary or advisable in connection with the preparation of the Reports or other Disclosure Statements, taking into account developments since the most recent evaluation, including material changes in the Corporation’s organization and business lines and any material change in economic or industry conditions.
The Committee shall adopt, whether formally or informally, such procedures as it deems necessary to facilitate the fulfillment of its responsibilities.
Full Access
The Committee shall have full access to all of Corporation’s books, records, assets, facilities and personnel, including the internal auditors, in connection with fulfilling its responsibilities.
Charter Review
The Committee shall review and assess this Charter annually, and recommend any proposed changes to the Senior Officers for approval.
Interpretation
Any questions of interpretation regarding this Charter, or the Committee’s responsibilities or procedures, shall be determined initially by the Chair and, to the extent necessary, ultimately by the Senior Officers.