Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report HTML 701K
2: EX-10.19 Amendment No. 7 to Loan Agreement 4 15K
3: EX-10.27 Employment Agreement 6 28K
4: EX-14.1 Code of Conduct 6 29K
5: EX-21.1 Subsidiaries 1 7K
6: EX-23.1 Consent 1 8K
7: EX-24.1 Power of Attorney 1 9K
8: EX-24.2 Power of Attorney 1 9K
9: EX-24.3 Power of Attorney 1 9K
10: EX-24.4 Power of Attorney 1 9K
11: EX-24.5 Power of Attorney 1 9K
12: EX-31.1 Certification per Sarbanes-Oxley Act (Section 302) 2± 12K
13: EX-31.2 Certification per Sarbanes-Oxley Act (Section 302) 2± 12K
14: EX-32.1 Certification per Sarbanes-Oxley Act (Section 906) 1 10K
EX-14.1 — Code of Conduct
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EXHIBIT 14.1
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CODE OF ETHICAL BUSINESS CONDUCT
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Honesty and integrity are the backbone upon which eLoyalty builds and maintains
its relationships with clients, vendors and employees. eLoyalty expects its
directors, officers and other employees to observe high ethical standards in the
performance of their duties and to observe all laws and regulations governing
their business transactions and practices. Furthermore, eLoyalty requires every
director, officer and other employee to take no action, and to not engage in any
conduct, that would cause eLoyalty or any of its clients, vendors or employees
embarrassment or humiliation, that creates the appearance of impropriety, or
otherwise causes or contributes to eLoyalty being held in disrepute by the
general public or by eLoyalty's clients, vendors or employees.
The standards presented in this policy are intended as guidelines and obviously
cannot cover every situation in our business environment. We expect directors,
officers and other employees to carefully consider their actions and apply sound
common sense and good judgment to decision making. If you have a question or are
doubtful about a particular action, you (if you are an employee) should talk
with your Employee Manager, Skill Group Leader, or Department Head, as
appropriate, or the Legal Department. In all cases, we expect a good faith
effort to follow the spirit and intent of this policy and applicable laws.
COMPLYING WITH LAW
All directors and employees of the company should respect and comply with all of
the laws, rules and regulations of the U.S. and other countries, and the states,
counties, cities and other jurisdictions, in which the company conducts its
business or the laws, rules and regulations of which are applicable to the
company.
Such legal compliance should include, without limitation, compliance with the
"insider trading" prohibitions applicable to the company and its employees,
officers and directors. Generally, employees, officers and directors who have
access to or knowledge of confidential or non-public information from or about
the company are not permitted to buy, sell or otherwise trade in the company's
securities, whether or not they are using or relying upon that information. This
restriction extends to sharing or tipping others about such information,
especially since the individuals receiving such information might utilize such
information to trade in the company's securities. In addition, the company has
implemented trading restrictions to reduce the risk, or appearance, of insider
trading. Company employees, officers and directors are directed to the company's
Insider Trading Policy, to the company's Legal Department or to the company's
Chief Financial Officer if they have questions regarding the applicability of
such insider trading prohibitions.
This Code of Ethical Business Conduct does not summarize all laws, rules and
regulations applicable to the company and its employees, officers and directors.
Please consult the company's Legal Department and the various guidelines that
the company has prepared on specific laws, rules
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and regulations.
CONFLICTS OF INTEREST
A fundamental principle behind our Code of Ethical Business Conduct is that
directors or employees should not use their position or association with
eLoyalty for their own gain or for the personal benefit of their family, friends
or associates. A "conflict of interest" exists whenever an individual's private
interests interfere or conflict in any way (or even appear to interfere or
conflict) with the interests of the company. A conflict situation can arise when
a director or employee takes actions or has interests that may make it difficult
to perform his or her company work objectively and effectively. Conflicts of
interest may also arise when a director or employee, or members of his or her
family, receives improper personal benefits as a result of his or her position
in the company, whether received from the company or a third party. Loans to, or
guarantees of obligations of, directors or employees and their respective family
members may create conflicts of interest. Federal law prohibits loans to
directors and executive officers.
Conflicts of interest are prohibited as a matter of company policy, except under
guidelines approved by the Board of Directors or committees of the Board.
Conflicts of interest may not always be clear-cut, so if you have a question,
you should consult with higher levels of management or the company's Legal
Department. Any employee, officer or director who becomes aware of a conflict or
potential conflict should bring it to the attention of a supervisor, manager or
other appropriate personnel or consult the procedures described in this Code.
See below and also the sections of this Handbook entitled "Employment of
Relatives" and "Social Relationships Among Employees, Clients, Vendors and Third
Parties" for additional information regarding specific types of potential
conflicts.
- BUSINESS TRANSACTIONS
In general, directors and employees may not receive money or any other
thing of value, either directly or indirectly, because of participating in
business transactions conducted on behalf of the company.
In addition, directors and employees may not have a substantial interest,
whether financial or personal, in any such business transaction. For
purposes of this policy, a substantial financial interest will be
determined on a case by case basis, taking into account all facts and
circumstances. However, in all cases, having (individually, or together
with member(s) of your family or household) a 5% or greater ownership
interest in the other company will be deemed having a substantial financial
interest. For example, when asked or authorized to negotiate a contract or
purchase on eLoyalty's behalf, employees should not be personally involved
in negotiations with the other company if they or their families possess an
ownership interest of 5% or greater. This does not mean that such companies
cannot do business with eLoyalty. Rather, the goal is to ensure that
negotiations with all companies are based strictly on terms of quality,
suitability, service, price and efficiency. A director or employee should
advise eLoyalty if such a conflict exists.
- OUTSIDE EMPLOYMENT/BUSINESS ACTIVITY (EMPLOYEES ONLY)
Employees must obtain prior written approval from eLoyalty's management
with respect to any
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outside employment or business activities, regardless of whether any
compensation is received for the activities or employment. Outside
employment, self-employment and other activities prohibited by law or
regulation or that may result in a conflict of interest with eLoyalty are
not permitted.
Examples of activities requiring prior written approval from eLoyalty's
management include full or part-time services as an officer, director,
general or limited partner, consultant or employee of another business
organization; and, agreements to be employed or compensated by a person or
entity other than eLoyalty and its subsidiaries. This requirement would
apply to compensation of any type, if compensation were received (e.g.,
commission, salary, fee, bonus, contingent compensation, etc.), whether in
cash or non-cash form.
eLoyalty may, at its discretion, ask that an employee discontinue any
outside business activity or employment at any time if a conflict develops
with eLoyalty's business or its work for its clients, or if attendance or
performance of the employee's duties for eLoyalty are adversely affected.
- GIFTS AND ENTERTAINMENT
PERMISSIBLE GIFTS AND ENTERTAINMENT
Directors and employees may give or receive gifts related to eLoyalty's
business of nominal value when such gifts are customary in the industry,
will not violate any laws, will not influence or appear to influence the
director's or employee's judgment or conduct of business for eLoyalty and
will not violate the policies of the recipient's employer. Business-related
gifts include business courtesies such as dinners, theatre tickets,
sporting events, golf outings, or transportation, food, or lodging in
connection with client or vendor-sponsored education or executive
briefings, etc., provided the frequency and cost of such courtesies are
within reason.
IMPERMISSIBLE GIFTS AND ENTERTAINMENT
Directors and employees may not receive or furnish improper gifts or
entertainment to or from individuals or organizations with which eLoyalty
has a current or potential business or other relationship. Such conduct
violates company policy and can result in a violation of national, state or
local laws and regulations of various jurisdictions in which we operate. An
example of improper entertainment would be taking a client (or being taken
by a client) to an adult entertainment facility.
Improper or unacceptable gifts and gratuities include, money, favors,
bribes, kickbacks, secret commissions, entertainment inappropriate to a
professional organization, payment of personal or business expenses, loans,
future employment, or any other tangible or intangible item of excessive
value. Whether an item is of excessive value depends on the facts and
circumstances surrounding the item and the giving of it. If you have any
concerns about the appropriateness of a gift or gratuity, you should err on
the side of caution and bring it to the attention of a member of the
Executive Team, directly or through your manger, for evaluation. Directors
or employees who receive gifts or gratuities in violation of this policy
must return the gift or gratuity, accompanied by a letter from management
outlining eLoyalty's policy.
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CORPORATE OPPORTUNITY
Directors and employees are prohibited from (a) taking for themselves personally
opportunities that properly belong to the company or are discovered through the
use of corporate property, information or position; (b) using corporate
property, information or position for personal gain; and (c) competing with the
company. Directors and employees owe a duty to the company to advance its
legitimate interests when the opportunity to do so arises.
CONFIDENTIALITY
Directors and employees of the company must maintain the confidentiality of
confidential information entrusted to them by the company or its suppliers or
customers, except when disclosure is authorized by the Legal Department or
required by laws, regulations or legal proceedings. Whenever feasible, directors
and employees should consult the Legal Department if they believe they have a
legal obligation to disclose any such confidential information. Confidential
information includes all non-public information that might be of use to
competitors of the company, or harmful to the company or its customers if
disclosed. See the section of this Handbook entitled "Non-Disclosure,
Confidentiality and Protection of Proprietary Information" for additional
information on the company's expectations regarding confidentiality.
FAIR DEALING
Each director and employee should endeavor to deal fairly with the company's
customers, suppliers, competitors, officers, directors and employees when
engaging in business for eLoyalty. None should take unfair advantage of anyone
in such a circumstance through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts or any other unfair dealing
practice.
PROTECTION AND PROPER USE OF COMPANY ASSETS
All employees, officers and directors should protect the company's assets and
ensure their efficient use. Theft, carelessness, and waste have a direct impact
on the company's profitability. All company assets should be used for legitimate
business purposes.
RECORD-KEEPING
The company requires honest and accurate recording and reporting of information
in order to make responsible business decisions. For example, only the true and
actual number of hours worked should be reported.
Many employees regularly use business expense accounts, which must be documented
and recorded accurately. If you are not sure whether a certain expense is
legitimate, ask your supervisor or manager.
All of the company's books, records, accounts and financial statements must be
maintained in reasonable detail, must appropriately reflect the company's
transactions and must conform both to applicable legal requirements and to the
company's system of internal controls. Unrecorded or "off the books" funds or
assets should not be maintained unless permitted by applicable law or
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regulation.
Business records and communications often become public, and we should avoid
exaggeration, derogatory remarks, guesswork, or inappropriate characterizations
of people and companies that can be misunderstood. This applies equally to
e-mail, internal memos and formal reports. Records should always be retained or
destroyed according to the company's record retention policies. In accordance
with those policies, in the event of litigation or governmental investigation
please consult the company's Legal Department.
ACCOUNTING COMPLAINTS
The company's policy is to comply with all financial reporting and accounting
regulations applicable to the company. If any employee of the company has
concerns or complaints regarding questionable accounting or auditing matters of
the company, then he or she is encouraged to submit those concerns or complaints
(anonymously, confidentially or otherwise) to the Audit Committee of the Board
of Directors (which will, subject to its duties arising under applicable law,
regulations and legal proceedings, treat such submissions confidentially). For a
copy of eLoyalty's full policy regarding the receipt and handling of these types
of complaints, please contact the Legal Department.
PUBLIC COMPANY REPORTING
As a public company, it is of critical importance that the company's filings
with the Securities and Exchange Commission be accurate and timely. Depending on
their position with the company, an employee or director may be called upon to
provide necessary information to assure that the company's public reports are
complete, fair and understandable. The company expects employees and directors
to take this responsibility very seriously and to provide prompt accurate
answers to inquiries related to the company's public disclosure requirements.
REPORTING ISSUES REGARDING ETHICAL BUSINESS CONDUCT
Directors and employees must talk to supervisors, managers or other appropriate
personnel about observed illegal or unethical behavior and, when in doubt, about
the best course of action in a particular situation. Employees who are concerned
that violations of this Code or that other illegal or unethical conduct by
employees or directors of the company have occurred or may occur should either
contact their supervisor or superiors. Directors and employees that do not
believe it appropriate or are not comfortable approaching their supervisors or
superiors about their concerns or complaints, may contact either the company's
Legal Department or the company's Human Resources Department. If their concerns
or complaints require confidentiality, including keeping their identity
anonymous, then this confidentiality will be protected, subject to applicable
law, regulation or legal proceedings.
Employee Managers, Skill Group Leaders, Department Heads and Project Managers
are responsible for implementing measures to detect and immediately report to
Human Resources any conduct that might violate this Code. eLoyalty's Human
Resources team will review the issue and either take action directly or forward
it to the appropriate party for investigation and ultimate resolution.
Non-compliance with this Code will be reviewed and evaluated to determine the
circumstances and
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severity of the problem. Employees and directors who have violated this Code
will be subject to disciplinary/corrective action (up to and including, in the
case of employees, termination of employment), legal action and/or other
measures as may be appropriate.
NON RETALIATION
eLoyalty strives to protect innocent parties in their reporting of policy
violations. eLoyalty strictly prohibits retaliation against any employee who, in
good faith, reports a suspected violation of this Code. The Human Resources team
will act promptly to assure compliance with this policy against retaliation.
If you have questions about this Code, please contact eLoyalty's Human Resources
team.
AMENDMENT, MODIFICATION AND WAIVER
This Code may be amended or modified by the Board of Directors. Waivers of this
Code for any director or member of the Executive Team may be granted only by the
Board of Directors. Waivers of this Code for any other employee may be granted
only by either (i) the Board of Directors or (ii) the President and Chief
Executive Officer or the Vice President and Chief Financial Officer. The
foregoing requirements are in all respects subject to the disclosure and other
provisions of the Securities Exchange Act of 1934, and the rules thereunder and
the applicable rules of the Nasdaq National Market.
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