Code of Business Conduct and Ethics

This Code of Business Conduct and Ethics (the “Code”) applies to all directors, officers and employees of Baylin Technologies Inc. and its subsidiaries (collectively, the “Company”) and all persons under contract with the Company (“service providers”).

It is the policy of the Company that all of its activities should be conducted in accordance with the highest standards of fairness, honesty and integrity and in compliance with all legal and regulatory requirements. The Company expects each of you as directors, officers, employees and, where applicable, service providers to conduct your dealings on behalf of the Company in accordance with this Code.

So that there can be no doubt as to what is expected of each of you in this regard, the Board of Directors of the Company (the “Board”) has endorsed this Code and the Chair of the Audit Committee will ensure that a copy of this Code is delivered to each director, officer and employee of the Company. The Chair of the Audit Committee will also take steps to cause this Code to be called to the attention of service providers and to ensure they understand the need to comply with it, as appropriate. Each director, officer, employee and, where applicable, service provider of the Company is required to sign an acknowledgement in the form attached as Schedule A on an annual basis or as otherwise determined by the Chair of the Audit Committee and the Chief Executive Officer (“CEO”).

 

SUMMARY OF CODE OF BUSINESS CONDUCT AND ETHICS

The following list summarizes your obligations under the Code. Each of these items is described in greater detail below.

  1. Protect the Company’s assets, and use them properly and with care for the benefit of the Company, and not for personal use.
  1. Comply with the Company’s Confidentiality and Insider Trading Policy and Corporate Disclosure Policy.
  1. Use e-mail, the Internet, telephone and other forms of communication provided by the Company appropriately, which means primarily for business-related purposes.
  1. Do not speak on behalf of the Company unless authorized to do so.
  1. Avoid situations in which your personal interests conflict, might conflict or might appear to conflict with the interests of the Company.
  1. Do not offer excessive or inappropriate gifts, entertainment or other benefits to persons, including public officials and political parties, that might influence or be perceived as influencing or attempting to influence a business decision.
  1. Do not accept any gifts, entertainment or other benefits from persons that may compromise or appear to compromise your objectivity when carrying out your responsibilities.
  1. Do not participate or allow others to participate in any activity that might be characterized as a bribe.
  1. On or before joining the board of another entity (including charitable entities), consider whether you have a conflict of interest, advise the Chairman of the Board or Vice-Chairman, and complete the form found at Schedule B to this Code.
  1. Do not take personal opportunities discovered through the use of property or information of the Company or through your role with the Company.
  1. Be committed to the prevention of workplace discrimination and harassment.
  1. Be committed to ensuring the health and safety of fellow directors, officers, employees and service providers.
  1. Know and comply with all laws, rules and regulations applicable to your position.
  1. Deal fairly with the Company’s shareholders, customers, suppliers, competitors, employees or service providers.
  1. Report illegal, unethical or dishonest conduct of directors, officers, employees or service providers of the Company.

 

EXPLANATION OF THE CODE

The Code prescribes the minimum moral and ethical standards of conduct required of all employees, officers and directors. Because any illegal or unethical action, or the appearance of misconduct or impropriety by anyone acting on the Company’s behalf is unacceptable, the Code should also be followed by the Company’s agents and representatives, including service providers.

An explanation of each of the rules is set out below. If employees, officers or service providers have questions regarding the application of any rule or about the best course of action in a particular situation, you should seek guidance from the Chairman or the CEO. The Chairman, CEO and directors should, as required, seek guidance from the Chair of the Company’s Corporate Governance and Compensation Committee (the “Governance Committee”) who will consult with the Governance Committee and, as appropriate, with outside legal counsel and other expert advisors as deemed necessary. Violations of the Code can have severe consequences and will result in the appropriate discipline being taken, up to and including dismissal or required resignation where warranted by the circumstances. You must report violations of laws, rules, regulations or the Code. Inappropriate delay in reporting a suspected or discovered violation is itself a violation of this Code.

 

1) BUSINESS ETHICS AND PRACTICES

PROTECTING THE COMPANY’S ASSETS AND RESOURCES

We all have a responsibility to protect and safeguard the Company’s assets from loss, theft, misuse and waste. All assets of the Company should be used for legitimate business purposes only. The Company’s property should never be used for personal gain, and you should not allow the Company’s property to be used for illegal activities. The Company’s property should not be taken out of the Company’s facilities unless necessary and authorized in connection with work for the Company.

The Company’s assets include all proprietary information, including intellectual property such as trade secrets, trademarks, and copyrights, as well as business, marketing and service plans, designs, databases, records, salary information, pricing, acquisition and divestiture opportunities, innovations, research and development information, supplier information, any unpublished financial or sales data and reports, as well as any information that suppliers or customers have entrusted to us.

Misappropriation of Company assets and the taking of Company property without permission are both breaches of your duty to the Company and may be an act of fraud against the Company, which could result in dismissal as well as civil or even criminal penalties. In addition, carelessness or waste of the Company’s assets may also be a breach of your duty to the Company and could result in dismissal. All proprietary information is to be returned to the Company promptly after your employment or appointment ceases, or at any time that the Company requests.

 

CONFIDENTIAL INFORMATION

“Undisclosed information” is information that has not been made generally available to the investing public, either through a press release, disclosure to shareholders or widely reported media coverage. Information is considered to be generally disclosed if it has been disclosed in an annual report, annual information form, management information circular, press release or media coverage, or interim reports. The circulation of rumours, even if accurate, is not considered general disclosure to the public.

Undisclosed information might be of use to competitors, or harmful to the Company, if disclosed. All information, including any customer, supplier, business partner and employee data, in any form, including electronic information, that is created or used in support of Company business activities is the property of the Company. This information is a valuable asset and employees, officers, directors and service providers are expected to protect it from unauthorized disclosure. We also respect the confidentiality of information regarding other businesses.

Confidential information, including information pertaining to the Company’s competitive position or business strategies, and information relating to negotiations with employees or third parties, should be protected and shared only with employees having a need to know that information in order to perform their job responsibilities.

Employees, officers, directors and service providers must maintain the confidentiality of information entrusted to them by the Company or its customers, suppliers or consultants except when disclosure is properly authorized by the Company or legally mandated. Employees, officers, directors and service providers must ensure they take all reasonable efforts to safeguard the confidential information that is in their possession against inadvertent disclosure and they must comply with any non-disclosure obligations imposed on the Company in its agreements with third parties.

Data protection and privacy laws also affect the collection, use and disclosure of personal information. You should consult with the CEO if you have any questions regarding the collection, use or disclosure of personal information.

The obligation to keep certain information confidential applies both during employment with the Company and after termination of employment, including on retirement.

 

POLICY REGARDING E-MAIL, THE INTERNET, TELEPHONES AND OTHER FORMS OF COMMUNICATION

The Company provides employees with access to e-mail, the Internet, telephones and other forms of communication for business purposes, and while we understand the need for limited and occasional use of these tools for personal purposes, this use should not be excessive or be detrimental to the Company. The Company’s e-mail system, including e-mail accounts and addresses, are the property of the Company. The Company has the right to access, monitor and review communications conducted using the Company’s resources and employees should have no expectation of privacy when using these resources. Internet use must be conducted in a reasonable professional manner and must not impede on employee’s ability to perform his or her duties. For example, accessing Internet sites containing obscene or offensive material, or sending e-mails that are derogatory or harassing to another person or group of people or chain emails, is prohibited. Employees must be also vigilant to ensure that the network security is maintained.

The Company’s policies against workplace discrimination and harassment apply fully to employee use of e-mail, the Internet, telephone and other forms of communication.

 

SOCIAL MEDIA USE

Unless specifically authorized by the Company, employees, officers, directors and, where applicable, service providers are strictly prohibited from commenting on or discussing the Company and its business, including information pertaining to its employees, customers, products and services, suppliers, competitors, performance or financial results on any social media sites (including Facebook, Twitter and Youtube) or Internet chat room, blog, newsgroup or other online fora.

 

MEDIA, PUBLIC AND GOVERNMENTAL INQUIRIES

Only the Chairman, Vice-Chairman, CEO and Chief Financial Officer (“CFO”) are trained and authorized as spokespersons to release information to the public. When members of the media, financial analysts or government authorities contact the Company to request information, the response can have far-reaching implications, including effects on the price of the Company’s securities and its ability to compete. In addition, we must comply with the requirements of securities regulators and, when applicable, stock exchanges about how and when we disclose information, and understand that there are strict consequences for doing so improperly.

If you receive a request for information from outside the Company, you must forward it to the Vice-Chairman or, to the CEO if the Vice-Chairman is unavailable, if you have not been specifically authorized to speak on behalf of the Company.

 

CONFLICTS OF INTEREST

As an employee, officer, director or service provider, we expect that you will act honestly, ethically, in good faith and in the best interests of the Company and its shareholders by avoiding conflicts of interest in your personal and professional relationships.

A conflict situation can arise when an employee, officer, director or service provider takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. A conflict situation also arises when an employee, officer, director or service provider receives, or may receive, personal benefits as a result of the person’s position.

Examples of material transactions or relationships include:

  • any ownership interest in any privately held supplier or competitor, or a significant ownership interest of a supplier or competitor that is a publicly traded firm;
  • any outside business activity that detracts from an individual’s ability to devote appropriate time and attention to his or her responsibilities with the Company;
  • any consulting or employment relationship with any supplier or competitor, or any service on a board or committee of such an entity;
  • the receipt of any money, non-nominal gifts or excessive entertainment from any entity with which the Company has current or prospective business dealings;
  • selling anything to or buying anything from the Company, except on terms and conditions comparable to those upon which other employees, officers, directors or service providers are permitted to purchase or sell; and
  • being in the position of supervising, reviewing, or having any influence on the job evaluation, pay or benefit of any family member (or equivalent).

Each employee, officer, director and service provider or a member of his or her family (or equivalent) must disclose, without delay, any personal interest in transactions or proposed transactions of the Company, relationships that could give rise to a conflict, and any other conflict of interest, including the underlying facts, arising in connection with their position in relation to the Company. Employees and service providers (and members of their families) must report any such interest to the CEO. The CEO and CFO will make any required personal disclosures directly to the Chair of the Governance Committee. Officers and directors must follow the reporting procedures set out in the Company’s Conflict of Interest Policy.

 

GIFTS, ENTERTAINMENT AND OTHER BENEFITS

You must use your best judgment to avoid situations of real or perceived conflicts when giving or receiving gifts, entertainment and other benefits.

To Persons

Do not offer excessive or inappropriate gifts, entertainment or other benefits to persons, including public officials and political parties, that might influence or be perceived as influencing or attempting to influence a business decision.

Some business situations call for giving gifts. Employees whose duties permit them to do so may offer modest gifts, entertainment or other benefits. Gifts may never be in the form of cash, bonds or negotiable securities. The benefits must be given in accordance with generally accepted ethical business practices. Employees may never pay bribes or give gifts of cash or cash equivalents, or any gift if it is prohibited by law or the policy of the recipient’s organization.

From Persons

Do not accept any gifts, entertainment or other benefits from persons that may compromise or appear to compromise your objectivity in carrying out your responsibilities.

As an employee, officer, director or service provider, you cannot solicit, encourage or receive a bribe or other payment, contribution, gift or favor that could influence your or another’s decision. It is possible to accept unsolicited gifts, entertainment or other benefits from persons doing or seeking to do business with the Company, provided the benefits are given in accordance with generally accepted business practices and are modest, infrequent, and to the extent possible, on a reciprocal basis.

Where it is impossible to decline a gift that does not meet the guidelines set out above, you should seek guidance from the CEO. The CEO will advise you whether the gift will be retained by the Company, donated to charity or disposed of.

If you are in doubt about the appropriateness of a gift, you should consult with the CEO.

 

BOARD AND COMMITTEE MEMBERS FOR OTHER ENTITIES

Serving as a director or a similar position for a government agency or an outside entity, even one in which the Company has an interest, may create a conflict of interest. Being a director or serving on a standing or advisory committee of some organizations, including government or non-governmental agencies, charities and non-profit organizations, may also create a conflict. On or before accepting an appointment to the board or a committee of any entity, you should consider whether it creates a conflict of interest with reference to the “Conflicts of Interest” section of this Code, including whether the appointment would detract from your ability to devote appropriate time and attention to your responsibilities with the Company. In addition, employees should advise the Chairman before accepting an appointment. Directors of the Company should obtain consent from the Chairman before accepting an appointment. Consent will normally be given to a director provided that the entity does not compete with the Company and the appointment is unlikely to detract from the director’s ability to serve the Company or impact the public’s perception of the directors’ commitment to the Company.

Employees, officers and directors are required to disclose all positions they hold on the board of directors or other governing body or a committee of any other organizations in their Conflict of Interest Disclosure Statement in the form attached as Schedule B to this Code.

 

CORPORATE OPPORTUNITIES

As an employee, officer, director or service provider, you are prohibited from taking business opportunities for yourself that are discovered or developed through the use of Company property, information or position. No employee, officer, director or service provider may use Company property, information, or position for improper personal gain. Any use by an employee or service provider of Company property or information that is not solely for the benefit of the Company must be approved in advance by an individual senior to that person and having the appropriate authority to approve such use. Officers and directors must seek prior approval of the Governance Committee.

 

ACCURACY OF BOOKS AND RECORDS

All of the Company’s books, records, accounts and financial statements must be maintained in detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal and accounting requirements and the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained under any circumstances. All business transactions must be properly authorized and must be supported by accurate documentation in sufficient detail and recorded properly.

No information may be concealed from the auditors, the Audit Committee or the Board. In addition, it is unlawful to fraudulently influence, coerce, manipulate or mislead any independent public or certified accountant who is auditing the Company’s financial statements. The Company must comply with applicable legal and regulatory requirements that relate to document and record retention and disposition.

 

2) WORK ENVIRONMENT

DISCRIMINATION AND HARASSMENT FREE ENVIRONMENT

The Company has zero tolerance for workplace discrimination and harassment. All directors, officers, employees and service providers must ensure that the Company remains safe and respectful environments, free of discrimination and harassment where high value is placed on equity, fairness and dignity. Harassment on the basis of race, gender, sexual orientation, color, national or ethnic origin, religion, marital status, family status, citizenship status, veteran status, age, disability or any other status protected by law is prohibited. Harassment generally means offensive verbal or physical conduct that singles out a person to the detriment or objection of that person. Harassment covers a wide range of conduct, from direct requests of a sexual nature to insults, offensive jokes or slurs, which results in an inhospitable work environment. Harassment may occur in a variety of ways and may, in some circumstances, be unintentional. Regardless of intent, such conduct is not acceptable and may also constitute a violation of human rights legislation.

No one may harass another employee, officer, director, service provider, customer, supplier, or any other person while doing business, whether on the Company’s premises or elsewhere.

 

SAFE WORKING CONDITIONS

We all have the right to work in an environment that is safe and healthy. In this regard, we must:

(a)     comply strictly with the letter and spirit of applicable occupational, health and safety laws and the public policies they represent;

(b)      follow work instructions or procedures on health and safety laws;

(c)       not engage in illegal or dangerous behaviours; and

(d)      not possess or use weapons or firearms or any type of combustible materials in the Company ‘s facilities or at Company-sponsored functions unless you are authorized by the Company or the law to do so.

The Company has zero tolerance for acts of violence, threats of violence, acts of intimidation and hostility towards another person or group of persons. Promptly report to your supervisor or the Chair of the Governance Committee any accident, injury or unsafe equipment, practices, conditions, violent behaviour or weapons possession.

 

3) LEGAL AND REGULATORY COMPLIANCE, COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Know and comply with all applicable laws, rules and regulations, whether or not specifically addressed in these policies. For additional information concerning laws, rules and regulations applicable to directors, officers, employees and service providers or if you have any doubts as to the applicability of any law, you should refer the matter to the CEO, the Vice-Chairman or the Chair of the Governance Committee. No employee, officer, director or service provider may enter into any arrangement contrary to applicable requirements or laws.

If a law conflicts with a policy in this Code, you must comply with the law; however, if a local custom or practice conflicts with this Code, you must comply with this Code. Compliance with the law does not comprise our entire ethical responsibility; rather, it is a minimum, absolutely essential condition for performance of our duties. Perceived pressure from managers/supervisors or others, or demands due to business conditions are not excuses for violating the law or this Code. Any questions or concerns about the legality of an action or a conflict between the law and the Code should be addressed to the CEO, the Vice-Chairman or the Chair of the Governance Committee.

 

FAIR DEALING

All dealings undertaken on the Company’s behalf should be conducted in a manner that preserves the Company’s integrity and reputation. It is the Company’s policy to deal fairly with the Company’s shareholders, customers, suppliers, competitors and employees. No employee, officer, director or service provider should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

 

4) COMPLIANCE WITH CODE

REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOUR OR CODE VIOLATIONS

The Company promotes ethical behaviour and encourages each employee, officer, director and service provider to talk to the CEO, the Vice-Chairman or the Chair of the Governance Committee when in doubt about the best course of action in a particular situation.

You must alert the CEO, the Vice-Chairman or the Chair of the Governance Committee whenever an illegal, dishonest or unethical act, including a possible violation of the Code or any other Company policy or legal requirement of another employee, officer, director or service provider is discovered or suspected. You must also report violations of laws, rules, regulations or the Code to the Vice-Chairman, CEO or the Chair of the Governance Committee. In order to facilitate the reporting of complaints on a confidential and/or anonymous basis, the Company has established a Whistleblower Policy with procedures for the receipt, retention and treatment of complaints regarding actual or apparent violations of this Code, the Company’s Corporate Disclosure Policy and/or the Company’s Confidentiality and Insider Trading Policy and regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. Inappropriate delay in reporting a suspected or discovered violation is itself a violation of this Code.

The Company will not allow retaliation for reports or complaints regarding suspected violations made in good faith. Open communication of issues and concerns without fear of retribution or retaliation is vital to the successful implementation of this Code and the Whistleblower Policy. Act or threats of retaliation should be reported immediately.

The Company will take such disciplinary or preventative action as it deems appropriate to address any violations of this Code that are brought to its attention.

 

COMPLIANCE STANDARDS AND PROCEDURES

The Board is responsible for monitoring compliance with the Code.

Employees, officers, directors and, where applicable, service providers who violate the Code will be subject to disciplinary action, including potential dismissal, required resignation or contract termination depending upon the particular circumstances. Information regarding possible breaches of the Code by directors will be referred to the Chairman or the Chair of Governance Committee, as appropriate in the circumstances.

The Company will not excuse any violation of this Code by an employee, officer, director or, where applicable, service provider even if the violation was specifically requested or directed by another employee, officer, director or service provider.

The Governance Committee will periodically review this Code. As it deems necessary, the Governance Committee will make recommendations to the Board to ensure that (i) this Code conforms to applicable law, (ii) this Code meets or exceeds industry standards, and (iii) any weakness in this Code or any other policy of the Company revealed through monitoring, auditing, and reporting systems is eliminated or corrected.

 

WAIVERS AND AMENDMENTS

The Governance Committee may grant a specific, limited waiver of any provision of this Code to directors, officers and employees if the Governance Committee determines, based on information that it deems credible and persuasive, that a limited waiver is appropriate under the specific circumstances. Each fact situation will be a separate case. Employees, other than executives, may seek waivers from the Vice-Chairman or Chair of the Governance Committee who is each entitled to grant them. Service providers may seek waivers from the CEO who is entitled to grant them to them. The Vice-Chairman and Chair of the Governance Committee will provide the Governance Committee with a quarterly report outlining all waivers that have been granted. The CEO will report to the Governance Committee at each Governance Committee meeting on all waivers granted by him or her since the last meeting. Each employee, officer, director and service provider should note that it is generally the Company’s intention not to grant or permit waivers from the requirements of this Code.

Conduct of a director, officer, employee or, where applicable, service provider of the Company that materially departs from the Code may be required to be publicly disclosed and reported to regulatory and law enforcement officials.

 

5) LEGAL NOTICE

This Code serves as a reference to you. The Company is committed to continuously reviewing and updating its policies and procedures. The Company reserves the right to modify, suspend or revoke this Code and any and all policies, procedures, and programs in whole or in part, at any time. The Company also reserves the right to interpret and amend this Code and these policies in its sole discretion as it deems appropriate.

Neither this Code, these policies, nor any statements made by any employee of the Company, whether oral or written, confer any rights, privileges or benefits on any employee, create an entitlement to continued employment at the Company, establish conditions of employment, or create an express or implied employment contract of any kind between employees and the Company. In addition, all employees should understand that this Code does not modify their employment relationship, whether or not governed by a written contract.

 

SCHEDULE “A”

BAYLIN TECHNOLOGIES INC. (the “Company”)

 

CODE OF BUSINESS CONDUCT AND ETHICS – STATEMENT OF COMPLIANCE

I have read and understand the Company’s Code of Business Conduct and Ethics (the “Code”) for employees, officers, directors and service providers.

I agree to comply with the terms, policies and guidelines contained and referenced in the Code, both during and after appointment or employment.

To the best of my knowledge, I am not involved in any situation that conflicts or might appear to conflict with the Code, except as disclosed in the Company’s most recently filed prospectus or other publicly filed continuous disclosure document.

I also agree to notify the Chair of the Corporate Governance, Nominating and Human Resources Committee immediately of any change that might adversely affect my compliance with the Code.

 
_______________________________________________
Name (Please print):

 

_______________________________________________
Position Title:

 

_______________________________________________
Date (mm/dd/yy):

 

_______________________________________________
Signature:

 

Note: All directors, officers, employees and, where applicable, service providers of the Company must complete this Statement of Compliance or otherwise be bound by the Code as determined by the Company.

Directors, officers and employees, please detach, complete and sign this form, and forward it to the Chief Financial Officer promptly upon receiving a copy of the Code and on an annual basis thereafter.

 

SCHEDULE “B” BAYLIN TECHNOLOGIES INC.

CONFLICT OF INTEREST DISCLOSURE STATEMENT

 

I serve as a member of the board of directors or other governing body of the following entities:

 

Entity_______________________________________________Title_______________________________________________

 

 

 

 

 

 

 

 

 

 

Date_______________________________________________Print Name_______________________________________________

 

 

Signature_______________________________________________

 

Note: All directors, officers and employees must complete this Conflict of Interest Disclosure Statement.

Please detach, complete and sign this form, and forward it to the Chief Financial Officer promptly upon receiving a copy of the Code and on an annual basis thereafter or earlier if an update is required.

 

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