DYNTEK CODE OF BUSINESS ETHICS
(Adopted March 3, 2004)
DynTek is committed to the highest standards of ethical behavior and integrity. Given the nature of our businesses, it is imperative that our behavior not give rise to even an appearance of misconduct or impropriety.
The potential for conflict between personal and business interests is ever present; laws that regulate business conduct are pervasive. Of course, no set of rules can cover all possible situations. Just as DynTek's continued success depends upon the collective efforts of its employees, so the Company must rely upon employees’ good faith, good judgment and high moral standards as the principal guide to ethical conduct. It is helpful to lay out guidelines for areas that are susceptible to controversy.
The Code of Ethics applies to all DynTek employees. It also should guide the behavior of family, business associates and others with whom covered employees share close relationships to the extent the employee is in a position to influence that behavior and it may reflect on the employee or DynTek.
This Code is intended to be our Code of Ethics for Senior Financial Officers pursuant to the provisions of Section 406 of the Sarbanes-Oxley Act of 2002 and related rules of the U.S. Securities and Exchange Commission.
CONFLICT OF INTEREST AND SELF-DEALING
DynTek requires that employees act in good faith and in the best interests of the Company. No DynTek employee should become involved in any situation where he or she might profit or benefit as a result of any relationship or act in a manner that is not in the best interests of DynTek. An employee should never represent the Company in any transaction in which he or she has any interest - direct or indirect - or from which he or she may benefit personally, unless such interest has first been disclosed, in writing, to and approved, in writing, by the Company.
An employee’s position with DynTek should not be used to influence or gain favor from public officials or others - including suppliers and advertisers - or otherwise for personal benefit. Similarly, DynTek employees may not use their employment with the Company as leverage to gain favors from employees, customers, suppliers or advertisers.
In short, every employee should take care at all times to avoid placing himself or herself in a position where even the appearance of a conflict of interest might exist. Employees’ conduct must consistently reflect DynTek’s commitment to impartiality and fairness in every aspect of its operations.
The following examples illustrate conduct that would constitute a violation of Company policy:
- performing work or services of a substantial nature outside of your employment for employees for a fee or having employees perform work or services outside of their employment for you for a fee;
- accepting a personal reward from a supplier or provider of services in exchange for the award of Company business;
- having a direct or indirect financial interest (other than ownership of stock in broadly owned, publicly traded companies) in a company that supplies goods and services to DynTek;
- using the employee’s connection with the Company to receive special consideration from authorities;
- writing a personal letter of complaint on Company stationery;
- using the employee’s position with the Company to obtain, for personal purposes, information that is not available to the general public;
- taking Company property or facilities for personal use;
- creating, starting, or participating in any way in an outside business that would have a detrimental impact on the ethics, impartiality or credibility of our business.
DynTek employees are expected to avoid any outside interest that might conflict with their loyalty to DynTek or their commitment to its values. They should neither invest in competitors’ businesses nor act on behalf of competitors. Investments in stocks of broadly owned, publicly traded companies that compete with the Company are permissible if they are not so significant as to affect the employee’s efforts on behalf of and loyalty to the Company.
Business-related gifts or free services beyond ordinary business practice may not be accepted. Gifts or sample products that are of token or insignificant value may be accepted if returning them would be awkward. Gifts beyond this level should be promptly returned with a courteous note explaining the Company’s policy.
Outside Employment and Business Directorships
DynTek employees are generally discouraged or prohibited from accepting outside employment, part-time or otherwise. While it is acknowledged that occasional part-time work may be acceptable, depending on an employee's position with the company, care and good judgment must be used in accepting outside employment to assure that the employment does not conflict with, or affect the performance of, an employee’s responsibilities at DynTek. If an employee has any question about the propriety of outside employment, the employee should discuss the matter with his or her supervisor.
DynTek employees may not make use of Company information while employed outside of the Company. Outside employment also may not appear to be an endorsement by DynTek of the product, service or company in question, nor should the nature of the outside employment reflect discredit upon DynTek.
It is the Company’s long-standing policy that none of its employees may serve on corporate boards or committees except for appropriate civic, educational and cultural organizations. The goal of this policy is to avoid not only actual conflicts of interest, but also situations that might raise questions about our credibility, impartiality or integrity. However, subject to the advance approval of the Company’s Chief Executive Officer, senior executives of DynTek may serve as directors of (a) companies in which the Company has a significant financial investment, and/or (b) no more than one outside company in which the Company does not have a financial interest. In addition, the Company’s Chief Executive Officer may serve as a director of (i) companies in which the Company has a significant financial investment and (ii) subject to the advance approval of the Compensation Committee, no more than one outside company in which the Company does not have a financial interest.
DynTek employees, as private individuals, are free to contribute to and work for political parties, causes or candidates and to participate in debate on issues of the day. But it is very important to avoid situations that might raise a perception of Company bias in the context of newspapers’ or other news-gathering units’ responsibilities to report and comment upon such activities.
Political contributions by corporations are regulated by state and federal laws, and in some cases are prohibited. In no case may an employee’s personal contribution be represented as a Company endorsement.
Any contribution to political parties or candidates by DynTek, where allowed by law, requires the advance approval by the DynTek Board of Directors. Financial support by DynTek for ballot issues - to adopt or amend laws and regulations - requires the approval in advance of the DynTek Board of Directors.
CONFIDENTIAL INFORMATION/TRANSACTIONS IN DYNTEK SECURITIES
Employees are encouraged to invest in DynTek stock. From time to time, however, employees may have important information about the Company that has not been disclosed to the public. All such information must be treated as confidential, may not be used in an attempt to profit personally and may not be disclosed to family members, friends or others outside of the Company. In particular, neither employees nor their family members or friends may use such confidential information as a basis for trading in Company stock. Should an employee have any doubt as to the propriety of buying or selling Company shares, he or she must not hesitate to ask a supervisor or a member of senior management for guidance.
Similarly, non-public information concerning other businesses, to which an employee may have access as a result of his or her connection with DynTek, must also be treated as confidential and may not be used for personal gain.
DynTek officers and employees who are “insiders” under the securities laws are subject to more stringent rules in connection with trading in DynTek securities. These rules are dealt with in a separate memorandum on insider trading.
It is important to keep in mind that unauthorized disclosure of sensitive non-public information to third parties - even to family and friends - could be harmful to DynTek and subject the employee who made the disclosure to personal liability if the third party were to act on the information or pass it on.
COMPLIANCE WITH LAWS
The activities of the Company must always be in full compliance with all laws, rules and regulations of the jurisdictions in which the Company conducts its business. The Company expects all employees to follow the spirit as well as the letter of the law.
CORPORATE ASSETS AND RECORDS
Strict propriety must be observed in any transaction involving the use, handling or accounting of Company funds. It is imperative that:
- accounting records be maintained and reports be prepared in accordance with generally accepted accounting principles;
- an adequate system of internal controls be maintained;
- accounting entries truly reflect the transactions that they record;
- all assets of the Company, including bank accounts in which Company cash is on deposit, be recorded on the regular books of the Company;
- all assets of the Company be treated with the same respect and diligence as personal assets and that employees be alert to opportunities for cost effective use of our assets;
- full cooperation be given to internal and external auditors;
- senior management be immediately advised of any matters that might be considered sensitive to preserving the Company’s reputation.
PUBLIC FILINGS AND COMMUNICATIONS
The Company's Chief Executive Officer and Chief Financial Officer are ultimately responsible for promoting full, fair, accurate, timely and understandable disclosure in the reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company (“Reports”). However, to the extent requested to provide information to be included in, or to participate in the preparation of, Reports, other employees, including the Company’s Controller, are responsible for providing such information and in preparing such Reports in a manner that will help to ensure the full, fair, accurate, timely and understandable disclosure of such information in the Reports. Employees are expected to report concerns regarding questionable accounting or auditing matters.
The Company is committed to supporting employees in meeting the ethical standards of conduct set forth in this Code and expects all employees to uphold these standards. Employees are encouraged to talk to supervisors, managers or the senior management when in doubt about the best course of action in a particular situation. If an employee becomes aware of anything that occurs which could in any way be construed as a fraudulent or illegal act or otherwise in violation of this Code, the employee is responsible for reporting such occurrence. Stakeholders, including but not limited to, employees, Directors of the Company, contractors, customers, vendors, and investors may report suspected unethical practices, illegal activities, or violations of any Company policy. Reports may be brought to the attention of the Executive Committee via firstname.lastname@example.org or made anonymously through the toll-free Whistleblower phone number (855) 411-2851.
Employees are expected to cooperate in internal investigations of actual or apparent violations of this Code. To the fullest extent possible, efforts will be made to keep confidential the identity of any employee that participates in such an investigation.
This Code necessarily is general. If you have any question about its applicability to a particular situation, please consult with your supervisor or, in appropriate circumstances, with the DynTek Executive Committee. You also should consult with one of these people if you believe that there are violations of the Code which are not being addressed by management. Any such discussions will be held in confidence.