Code of Ethics
magicJack VocalTec Ltd. and its subsidiaries (collectively the "Company") are committed to the highest level of ethical conduct. The Company aspires to the highest ethical standards not only because of legal exposure, at both corporate and personal levels, but because a high level of standards is consistent with our corporate culture. The following Code of Business Conduct and Ethics for Directors, Officers and Employees (the "Code") is intended as an overview of our guiding principles.
Except where specifically provided, the provisions of this Code apply to all Directors, Officers and Employees of the Company and its direct and indirect subsidiaries. This Code cannot and is not intended to cover every applicable law or provide answers to all questions that might arise; for that we must ultimately rely on each person's good sense of what is right, including a sense of when it is proper to seek guidance from others on the appropriate course of conduct. Our business depends upon the reputation of the Company and its directors, officers and employees for integrity and principled business conduct.
Conflicts of interest arise whenever actions are based on interests other than those of the Company. You must avoid any personal activity, investment or association that may interfere with using good judgment concerning the Company's best interests. You may not exploit your position or relationship with the Company for personal gain. You should avoid even the appearance of such a conflict. For example, a conflict of interest may arise if you:
- Cause the Company to engage in business transactions with relatives or friends;
- Use information of the Company, a customer or supplier for your own personal gain, or the personal gain of relatives or friends;
- Have a financial interest in the Company's customers, suppliers or competitors;
- Receive a loan or guarantee of obligations, from the Company or from a third party, as a result of your position at the Company; or
- Compete, or prepare to compete, with the Company while still employed by the Company.
If you are involved in or are aware of a transaction involving any of the relationships described above, you must report the transaction to the Chief Financial Officer. All transactions between the Company and you or a member of your immediate family, or any entity in which you or a member of your immediate family has a significant financial interest, must be approved by the Chief Financial Officer. There may be other situations in which a conflict of interest may arise. If you have any questions or concerns about any situation, follow the guidance outlined in the section below on Reporting Ethical Violations.
The Company is a publicly-held company and thus, subject to the Securities Act of 1933, the Securities Exchange Act of 1934 and numerous other laws, rules and regulations promulgated thereunder (the "Securities Laws"). The Securities and Exchange Commission (the "SEC") requires companies to maintain disclosure controls and procedures designed to ensure that information required by the Securities Laws to be disclosed by publicly-held companies is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. It is, therefore, imperative that all disclosures contained in the Company's public filings and other public communications are complete, fair, accurate, timely and understandable.
Every person who participates in the information gathering process for the Company's public filings and other public communications is responsible for the timeliness and accuracy of the information contained therein. Those persons having responsibility for particular areas of the Company's periodic reports such as the Form 10-K and the Form 10-Q must report to [Audit Committee] on an ongoing basis the following matters which come to their attention:
- Deviations from or changes to the current public information available for the Company;
- Changes in risks, or new risks, to the Company as they are identified; and
- Changes that may affect the Company's financial results.
Financial managers hold an important and elevated role in corporate governance. They are empowered to ensure that shareholder interests are appropriately balanced, protected and preserved. Accordingly, all financial managers are expected to uphold the following standards:
- To provide information that is accurate, complete, objective, relevant, timely and understandable;
- To comply with laws, rules and regulations of federal, state, and local governments and appropriate regulatory agencies;
- To act in good faith, responsibly, with due care, competence and diligence, without misrepresenting facts or allowing their independent judgment to be subordinated;
- To respect the confidentiality of information acquired in connection with their activities for the Company, except when authorized or otherwise legally obligated to disclose;
- To share knowledge and to maintain skills needed to perform their jobs;
- To promote ethical behavior as a responsible partner among peers in the workplace and community; and
- To achieve responsible use of and control over all assets and resources employed by or entrusted to them.
Compliance with all governmental laws, rules and regulations applicable to the Company is mandatory and any violations thereof are considered violations of this Code of Ethics. Mistakes should never be covered up, but should be immediately fully disclosed and corrected, if possible. Remember, misconduct cannot be excused because it was directed or requested by another. Deliberate falsification of any Company customer, supplier or other third party record is prohibited.
If you have any questions about your duties with regard to public reporting, please ask the Chief Financial Officer.
No person may: (a) take for himself or herself personal opportunities that are discovered through the use of Company property, information or position; (b) use Company property, information or position for personal gain; or (c) compete with the Company. Accordingly, you should promptly inform the Chief Financial Officer of any business opportunity, prospect, proposed investment or other potential transaction that (1) becomes known by virtue of or as a result of your position with the Company and (2) is of a type or nature that might reasonably be of interest to the Company. No person may pursue any opportunity, prospect, investment or other transaction for his or her personal account or to benefit any other business interest, without first offering the same to the Company and receiving the written approval of the Chief Financial Officer. Directors, officers and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.
Engaging in substantial personal transactions with the Company's vendors, subcontractors or customers creates opportunities for serious conflicts of interest and may constitute a violation of a number of the principles outlined in this Code. Entering into such transactions on anything other than arms' length price and terms can compromise your independent judgment. In addition, such transactions may improperly divert the efforts and resources of the vendor, subcontractor, customer or employee away from serving the Company's interests. Furthermore, it is always improper for an individual to exploit the Company's influence and business relationship with a vendor, subcontractor or customer for personal, individual gain that is not available to all employees, officers and directors equally.
You may not use the Company's relationship or influence with any vendor, subcontractor, customer or employee to achieve a personal, individual gain or advantage that is not available generally to employees of the Company. Accordingly, any such transaction should generally be on arms' length price and terms. You may take advantage of a vendor discount offered to all employees of the Company, but you may not use your position with the Company to obtain an individual concession or discount that is not generally offered to employees.
If you engage or hire another Company employee to provide services for a personal transaction, (a) the engagement may not interfere with the duties, performance or loyalty owed by the employee to the Company; (b) no Company equipment, supplies, facilities or other property may be used in performing the services; (c) the services must be performed on the hired employee's personal time; (d) no undue influence may be exerted on the hired employee nor may he or she be required to perform or discount the charges for such services.
Other than for modest gifts given or received in the normal course of business (e.g., coffee mugs, pens, and other logoed promotional materials or business lunches), neither you nor your relatives may give gifts to, or receive gifts from, the Company's vendors, customers and suppliers. Other gifts may be given or accepted only with prior approval of the Chief Financial Officer. In no event should you put the Company or yourself in a position that would be uncomfortable if knowledge of the gift was made public.
Dealing with government employees is often different than dealing with private persons. Many governmental bodies strictly prohibit the receipt of any gratuities by their employees, including meals and entertainment. You must be aware of and strictly follow these prohibitions.
A kickback or bribe includes any item intended to improperly obtain favorable treatment. Any employee who pays or receives bribes or kickbacks will be immediately terminated and reported, as warranted, to the appropriate authorities.
It is usually illegal to buy or sell securities using material information not available to the public. Persons who give such nonpublic "inside" information to others may be as liable as persons who trade securities while possessing such information. Securities laws may be violated if you, or any relatives or friends trade in the securities of the Company', its customers or suppliers, while possessing "inside" information.
The Company has an international presence and thus, certain persons may find it necessary to interact with foreign governments or officials in the furtherance of the Company's business activities. In any dealings with foreign officials, candidates, or political parties, the Company and its directors, officers, employees, consultants, agents, subsidiaries, distributors, resellers, and representatives, must comply with the following policy.
Generally, the Company's Corporate Policies, the United States Foreign Corrupt Practices Act ("FCPA"), and applicable foreign laws prohibit payments to, and business relationships with, government officials ("government officials" may include employees of entities that are state-owned, in whole or part) that could be construed as bribes or attempts to influence government behavior. You may not give, offer, promise, or authorize direct or indirect payments to foreign officials for the purpose of obtaining or retaining business for the Company. Payments include money, gifts, or anything of value, and need not actually be delivered, but merely have been intended for a corrupt purpose, to violate the FCPA. It is therefore illegal and against the Company policy for any Director, Officers, Employee or other representative to offer or give anything of value that is intended to:
- influence any act or decision of a foreign official in his or her official capacity;
- induce the official violate a lawful duty of his position or to use his influence improperly; or
- obtain an improper advantage for the Company.
The Company and individuals may face significant civil and criminal punishment in both the United States and in other countries, including imprisonment, for violating the FCPA and local laws. In addition, the Company may discipline its employees for violations of this Code of Ethics and the FCPA.
Each person should endeavor to deal fairly and in good faith with the Company's customers, shareholders, employees, suppliers, regulators, business partners, competitors and others. No person should take unfair advantage of anyone through manipulation, concealment, abuse of privileged or confidential information, misrepresentation, fraudulent behavior or any other unfair dealing practice.
All persons should maintain the confidentiality of information entrusted to them by the Company, its business partners, suppliers, customers or others related to the Company's business. Such information must not be disclosed to others, except when disclosure is authorized by the Company or legally mandated. Confidential information includes all non-public information that might be of use to competitors or harmful to the Company, or its customers, if disclosed.
Company assets, such as information, materials, supplies, time, intellectual property, software, hardware, and facilities, among other property, are valuable resources owned, licensed, or otherwise belonging to the Company. Safeguarding Company assets is the responsibility of all of us. All Company assets should be used for legitimate Company purposes only. The personal use of Company assets without permission of the Chief Financial Officer is prohibited.
The diversity of Company's employees is a tremendous asset. We are firmly committed, in compliance with applicable federal, state and local laws and Company's policies, to providing equal opportunity in all aspects of employment and we will not tolerate any illegal discrimination or harassment of any kind. Decisions regarding employment, training, compensation and advancement will be made on the basis of qualification, merit and business needs, regardless of race, religion, sex, national origin, age, or other protected characteristic. Examples of impermissible harassment include derogatory comments based on sex, racial or ethnic characteristics, religion, national origin and similar characteristics, and unwelcome sexual advances.
The Company strives to provide each employee with a safe and healthy work environment. Each employee is responsible for maintaining a safe and healthy workplace for all employees by following applicable safety and health laws, rules and regulations, by complying with the Company's health and safety policies and practices, and by reporting to a supervisor accidents, injuries and unsafe equipment, practices or conditions.
Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs in the workplace will not be tolerated.
The Company requires honest, accurate and complete 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 the Chief Financial Officer.
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 Counsel's Office.
The Company has a "no tolerance" policy for anyone engaging in business disparagement or similar
behavior. Business disparagement includes making disparaging, damaging or negative comments about a competitor, customer, vendor, including such persons products, services, employees, business practices or financial condition.
Everyone has a duty to adhere to this Code and all existing Company policies and to report to the Chief Financial Officer any suspected violations in accordance with applicable procedures.
In addition, any person who believes in good faith that a violation has occurred of any corporate policy or standard, including standards applicable to officers and employees, whether accidental or deliberate, should report the violation to the Chief Financial Officer. Violations can be reported via e-mail to: Thomas.Fuller@magicjack.com. It is better to err on the side of reporting than to let a possible violation go unreported. The Company is committed to providing an open and honest environment. An open and honest environment requires a commitment from the Company to expressly protect the rights of each and every Employee, Officer and Director. Therefore, no person shall attempt to discipline or otherwise retaliate against any employee for reporting in good faith suspected violations of law or Company policy in accordance with the standards applicable to employees.
Violations of the Code or other policies, or of applicable laws, rules and regulations, may result in disciplinary measures against the violator. Such measures, depending on the nature and severity of the violation, whether the violation was a single or repeated occurrence, and whether the violation appears to have been intentional or inadvertent, may include written notices to the individual involved, censure by the Board, demotion or re-assignment, suspension with or without pay or benefits and termination of employment.
Disciplinary action will also apply to supervisors who, with respect to those employees reporting to them, know that prohibited conduct is contemplated by such employees and do nothing to prevent it, or know that prohibited conduct has been engaged in by such employees and fail to take appropriate corrective action. Supervisors may also be subject to disciplinary action for their failure to effectively monitor the actions of their subordinates.
In addition, violations of legal and regulatory requirements may carry their own civil and criminal penalties, including fines and imprisonment.