ADS CODE OF CONDUCT
This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we adhere to these higher standards. Employees and directors are required to familiarize themselves with Company policies that relate to their work.
This Code applies to all of our directors, officers and employees. We refer to all persons covered by this Code as “Company employees” or simply “employees.” We also refer to our chief financial officer and our president as our “principal financial officers.”
The Company has a simple and straightforward policy on the rules of conduct and behavior that are expected from employees and agents when they are conducting Company business. It is a commitment to do what is right, obey all laws, behave with integrity and honesty, treat people fairly, respect diversity, accept accountability, communicate openly and always behave in a way that is above reproach. Generally, these requirements are referred to as ethics. Each employee is required to maintain these high ethical standards at all times even though doing so may result in the loss of business to the Company. No employee of the Company should feel that a compromising or unethical situation is justified by any possible business result. Anyone who violates these rules of conduct and behavior could be subject to criminal or civil penalties and/or be subject to corrective action up to and including discharge from the Company.
All employees and agents are expected to apply the highest ethical standards and observe all laws and regulations applicable to the Company’s business. No employee or agent has the authority to require or approve any action that would break the law or violate ethical standards. Employees or agents should avoid situations where anyone engages in activities that would accomplish indirectly for the Company what the Company could not legally or ethically do directly.
This Code of Business Conduct and Ethics, as applied to the Company’s principal financial officers, shall be our “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
This Code and the matters contained herein are neither a contract of employment nor a guarantee of continuing Company policy. We reserve the right to amend, supplement or discontinue this Code and the matters addressed herein, without prior notice, at any time.
SEEKING HELP AND INFORMATION
This Code is not intended to be a comprehensive rulebook and cannot address every situation that our employees may face. There is no substitute for personal integrity and good judgment. In the event any employee feels uncomfortable about a situation or has any doubts about whether it is consistent with the Company’s ethical standards, he or she should seek help. We encourage our employees to contact their supervisors for help first. If a supervisor cannot answer a particular question or if an employee does not feel comfortable contacting his or her supervisor, such employee should contact the General Counsel or the Human Resources Department.
REPORTING VIOLATIONS OF THE CODE
All employees have a duty to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company. If an employee knows of or suspects a violation of this Code, he or she should immediately report the conduct to his or her supervisor. The supervisor will contact the Human Resources Department, which will work with the employee and the supervisor to investigate the matter. If the employee does not feel comfortable reporting the conduct to a supervisor or does not get a satisfactory response, the employee may contact the Human Resources Department directly.
All reports of known or suspected violations involving the accuracy of the Company’s financial reports and related matters should be reported either directly to the Audit Committee or any anonymous hotline established by the Company to specifically address such matters.
We also have a website, www.ads.silentwhistle.com, and a dedicated toll-free number, 1-800-792-8125, available 24 hours a day, seven days a week to provide employees, customers and vendors a way to anonymously and confidentially report activities that potentially may involve criminal, unethical or otherwise inappropriate behavior in violation of the Company’s established policies, including this Code. International toll-free numbers and specific reporting instructions and limitations for those reporting from outside the United States may be found on the website at www.adsinc.com. All reports of known or suspected violations of the law or this Code will be handled sensitively and with discretion. Each supervisor, the Human Resources Department, the Audit Committee and the Company will protect each employee’s confidentiality to the extent possible, consistent with law and the Company’s need to investigate the matter.
It is Company policy that any employee who violates this Code will be subject to appropriate discipline, which may include termination of employment. This determination will be based upon the facts and circumstances of each particular situation. An employee accused of violating this Code will be given an opportunity to present his or her version of the events at issue prior to any determination of appropriate discipline. Employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms. The Company may also face substantial fines and penalties and may incur damage to its reputation and standing in the community. The conduct of each employee, as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both the employee and the Company.
POLICY AGAINST RETALIATION
The Company strictly prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. Any reprisal or retaliation against an employee because the employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.
The Company will not tolerate discrimination in employment, discipline, or opportunity on the basis of race, color, age, sex, religion, disability, national origin, veteran status, sexual orientation, gender identity, transgender status, genetic information or any status protected by applicable law. We further comply with all Affirmative Action requirements and proactively seek to achieve diversity in our workforce. We unequivocally prohibit all forms of harassment in the workplace. The Company’s harassment policy applies to all employees, as well as to employees and representatives of ADS’ customers and vendors. If an Employee believes he/she or a co-worker have been discriminated against or harassed in any way it should be immediately reported to Human Resources or management.
Employees and prospective employees must report to the company if they have been indicted or convicted by the government for an offense committed in connection with government contracts, or an offense involving theft, bribery, making false statements or receiving stolen property. The Company is required to report to the government whether the company or any of its employees have been convicted of or charged with an offense connected to government contracting or a violation of law relating to theft, bribery, making false statements or receiving stolen property. If you have any question as to whether this applies to you, report it immediately to Human Resources.
DRUG FREE WORKPLACE
In accordance with federal law, the Company maintains a Drug Free Workplace and prohibits the use of illegal drugs at its worksites and by its employees.
CONFLICTS OF INTEREST
Identifying Potential Conflicts of Interest
A conflict of interest can occur when an employee’s private interest interferes, or appears to interfere, with the interests of the Company as a whole. Employees should avoid any private interest that influences their ability to act in the interests of the Company or that makes it difficult to perform their work objectively and effectively.
Identifying potential conflicts of interest may not always be clear-cut. The following situations are examples of conflicts of interest:
- Improper Personal Benefits. No employee should obtain any improper personal benefits or favors because of his or her position with the Company.
- Financial Interests. No employee should have a significant direct financial interest (ownership or otherwise) in any company that is a material customer, vendor or competitor of the Company. A “significant financial interest” means (i) ownership of greater than 1% of the equity of a material customer, vendor or competitor or (ii) an investment in a material customer, vendor or competitor that represents more than 5% of the total assets of the employee.
- Loans or Other Financial Transactions. No employee should obtain loans or guarantees of personal obligations from, or enter into any other personal financial transaction with, any company that is a material customer, vendor or competitor of the Company. This guideline does not prohibit arms-length transactions in the ordinary course of business for such entity.
- Actions of Family Members. The actions of family members outside the workplace may also give rise to the conflicts of interest described above because they may influence an employee’s objectivity in making decisions on behalf of the Company. For purposes of this Code, “family members” include an employee’s spouse, brothers, sisters and parents, in-laws and children whether such relationships are by blood or adoption.
DISCLOSURE OF CONFLICTS OF INTEREST
The Company requires that employees disclose any situations that reasonably would be expected to give rise to the appearance of a conflict of interest. If an employee suspects that they have a conflict of interest, or something that others could reasonably be perceived as a conflict of interest, the employee must report it to his or her supervisor or the Human Resources Department. The supervisor and the Human Resources Department will work with the employee to determine whether they have a conflict of interest and, if so, how best to address it. Although conflicts of interest are not automatically prohibited, they are not desirable and may only be waived as described in “Waivers of the Code” above.
As an employee of the Company, you have an obligation to put the interests of the Company ahead of your personal interests and to advance the Company’s interests when the opportunity to do so arises. If you discover a business opportunity through the use of corporate property or information or because of your position with the Company, you must first present the business opportunity to the Company before pursuing the opportunity in your individual capacity. No employee may use corporate property, information or his or her position with the Company for personal gain, and no employee may compete with the Company either directly or indirectly without the approval of the Board of Directors.
Employees have access to a variety of confidential business information while employed at the Company. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed, such as client lists. If you have any doubts whether any information or data concerning the Company is confidential, you must refrain from disclosure and check with the Vice President—Human Resources. Employees have a duty to safeguard all confidential information, except when disclosure is authorized or legally mandated. An employee’s obligation to protect confidential information continues after an employee leaves the Company. Unauthorized disclosure of confidential information could cause competitive harm to the Company and could result in legal liability to you and the Company.
As a result of the Company’s business relationships with customers, vendors and others, employees may also have access to and be entrusted with confidential information of other parties. In these cases, other parties’ confidential information must be afforded the same protection as the Company’s confidential information.
Employees who improperly use or disclose trade secrets or confidential information will be subject to disciplinary action, up to and including termination or employment as well as possible legal action, even if they do not directly benefit from the disclosed information. This policy is in no way intended to restrict employees from collectively bargaining or participating in concerted activities to improve working conditions.
The Company competes vigorously but fairly. All employees are obligated to deal fairly with the Company’s customers, vendors, competitors and employees. Employees will not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.
The Company requires that pricing is developed independently and without any discussion or agreement with our competitors. Employees, as well as the Company, could be liable for criminal and/or civil penalties if you collaborate with our competition on pricing or performance issues.
GIFTS AND ENTERTAINMENT
The giving and receiving of gifts is a common business practice. In other industries, appropriate business gifts and entertainment are welcome courtesies designed to build relationships and understanding among business partners. However, the law requires that contractors and governmental personnel remain independent and objective. If you offer employment, money or gifts to government contracting officials or inspectors, you are probably violating the law. As a rule, you should never provide gratuities, gifts, favors, entertainment, loans, or anything of monetary value to any government employee in the agency with whom you conduct business. You are not authorized to offer employment to government personnel in exchange for favorable treatment on a contract.
Some exceptions apply. The following are a few examples of allowable items which are either not considered “gifts” or are considered “gift exceptions”:
- Modest items of food and refreshments offered other than as part of a meal
- Greeting cards and items of little intrinsic value which are intended solely for presentation
- Opportunities and benefits, including favorable rates and commercial discounts, available to the public or to a class consisting of all government employees or all uniformed military personnel
- Rewards and prizes given to competitors in contests or events, including random drawings, open to the public unless the employee’s entry into the contest or event is required as part of his official duties
- Anything for which market value is paid by the employee
- De minimus gifts valued up to $20 (up to a maximum of $50 from the same source in one calendar year)
- Gifts based on a personal relationship
- Gifts associated with public service awards and honorary degrees
- Gifts based on outside business/employment relations
- Widely attended gatherings and other events
- Social invitations (from other than prohibited sources)
If you conduct business in other countries, you must be particularly careful that gifts and entertainment are not construed as bribes, kickbacks or other improper payments. If you have any questions about whether it is permissible to accept a gift or something else of value, contact the Vice President—Human Resources for additional guidance.
PROTECTION AND USE OF COMPANY ASSETS
All employees should protect the Company’s assets and ensure their efficient use for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company’s profitability, business continuity and reputation. The use of the funds, services or assets of the Company, whether for personal gain or not, for any unlawful, unethical or improper purpose is strictly prohibited.
PROHIBITION AGAINST USING CORPORATE ASSETS FOR POLITICAL PURPOSES
The Company encourages you to participate in the political process as an individual and on your own time. However, you are prohibited from using the funds, assets, services, properties or facilities of the Company, directly or indirectly, for the purpose of aiding, supporting or opposing any political party, association, organization or candidate where such use is illegal or improper under the laws or regulations of the relevant jurisdiction. Please contact the General Counsel or any member of the Company’s Legal Department if you have any questions about this policy.
Accurate and reliable records are crucial to our business. Our records are the basis of our earnings statements, financial reports and other disclosures to the public and guide our business decision-making and strategic planning. Company records include booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.
All Company records must be complete, accurate and reliable in all material respects. Undisclosed or unrecorded funds, payments or receipts are inconsistent with our business practices and are prohibited. Our employees are responsible for understanding and complying with our record keeping policy. Each employee should ask his or her supervisor if they have any questions.
ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS
Accurate and reliable records are crucial to our business. Our records are the basis of our earnings statements, financial reports, public filings and other disclosures to third parties and guide our business decision-making and strategic planning. Our records include customer and vendor information, including pricing information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.
All of our records must be complete, accurate and reliable in all material respects. Undisclosed or unrecorded funds, payments or receipts are inconsistent with our business practices and are prohibited. You are expected to act in good faith, responsibly, with due care, competence and with common sense in a timely manner. You may not misrepresent material facts or allow your independent judgment or decisions to be improperly influenced or biased by others or by other factors such as operating unit or individual performance or objectives, plans, forecasts or financial commitments. If you believe someone is asking or directing you to violate these obligations, report the situation promptly. You are responsible for understanding and complying with our record-keeping policy. Ask your supervisor if you have any questions.
The Company’s principal financial officers and other employees serving in a finance, accounting, corporate treasury, tax or investor relations role (the “Finance Team”) have a special responsibility to ensure that all of our financial disclosures with respect to the Company are prepared and reported in a full, fair, accurate, timely and understandable manner. These employees must understand and strictly comply with the Company’s accounting policies and U.S. generally accepted accounting principles and all standards, laws and regulations for accounting and financial reporting of transactions, estimates and forecasts. You are expected to comply with the internal controls, disclosure controls and procedures and other policies and procedures established by the Company from time to time.
Any action (direct or indirect) to force, manipulate, mislead or fraudulently influence any
person, including a principal financial officer or other member of the Finance Team in the performance of their duties with respect to the financial books and records is a violation of this Code. This includes situations involving the recording or authorization of any financial transactions that are incorrect or improper or not adequately supported. Any action (direct or indirect) to force, manipulate, mislead or fraudulently influence the Company’s independent auditors in the performance of their audit or review of the Company’s financial statements is prohibited. Any violation of this Section should be reported directly to the General Counsel.
COMPLIANCE WITH LAWS AND REGULATIONS
Each employee has an obligation to comply with all laws, rules and regulations applicable to the Company’s operations. These include, without limitation, laws covering procurement integrity, fraud, bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets. Without limitation of the foregoing, each employee is prohibited from engaging in any form of bribery or kickbacks and from using the funds, assets, services or facilities of the Company to improperly influence or corrupt the action of any government official, agent or employee or of any private customer, vendor or other person. Each employee is expected to understand and comply with all laws, rules and regulations that apply to his or her job position. You are not authorized to offer employment, money, gifts or any other item of value to government personnel in exchange for favorable treatment on a contract. If any doubt exists about whether a course of action is lawful, each employee should seek advice from his or her supervisor, the General Counsel or the Human Resources Department.
As part of this obligation, employees must comply with U.S. federal regulations that require a federal contractor, such as the Company, to timely disclose in writing to the appropriate Office of Inspector General, with a copy to the Contracting Officer, whenever the contractor has credible evidence that a principal, employee, agent or subcontractor has committed (1) a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violation or (2) a violation of the Civil False Claims Act in connection with the government contract. If the violation is related to more than one government contract, the Company will make the disclosure to the Contracting Officer and Office of Inspector General of the agency responsible for the largest dollar value government contract impacted by the violation. It is imperative that any employee who suspects that there has been a violation described in this paragraph report it to the General Counsel so that the Company can examine the evidence to determine its credibility before deciding whether to make disclosure to the appropriate Inspector General. Knowing failure to timely disclose to the Inspector General is a ground for suspension or debarment of the contractor.
This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If any employee has any questions about these guidelines, they should please contact their supervisor, the General Counsel or the Human Resources Department. We expect all Company employees to adhere to these standards and those outlined in any of our other Company policies.