Purpose and Scope

The Board of Directors of ProPhotonix Limited (together with its subsidiaries), established this Code of Business Conduct and Ethics to aid ProPhotonix’s directors, officers and employees in making ethical and legal decisions when conducting ProPhotonix’s business and performing their day-to-day duties.

This Code is intended to enunciate general principles to guide the conduct of ProPhotonix’s directors, officers and employees. At all times when acting on behalf of ProPhotonix, directors, officers and employees should strive to conduct ProPhotonix’s business in an honest and ethical manner.

ProPhotonix’s Audit Committee of the Board is responsible for administering this Code. The Board of Directors has delegated day-to-day responsibility for administering and interpreting this Code to Edward Dolan as our Compliance Officer.

Standards of Conduct

Compliance with Laws, Rules and Regulations

ProPhotonix seeks to conduct its business in compliance with applicable laws, rules and regulations. No director, officer or employee shall engage in any unlawful activity in conducting ProPhotonix’s business or in performing his or her day-to-day company duties, nor shall any director, officer or employee instruct others to do so.


Protection and Proper Use of ProPhotonix’s Assets

Loss, theft and misuse of ProPhotonix’s assets have a direct impact on ProPhotonix’s business and its profitability. Employees, officers and directors are expected to protect ProPhotonix’s assets that are entrusted to them and to protect ProPhotonix’s assets in general. Employees, officers and directors are also expected to take steps to ensure that ProPhotonix’s assets are used only for legitimate business purposes.


Corporate Opportunities

Employees, officers and directors owe a duty to ProPhotonix to advance its legitimate business interests when the opportunity to do so arises. Each employee, officer and director is prohibited from:

  • diverting to himself or herself or to others any opportunities that are discovered through the use of ProPhotonix’s property or information or as a result of his or her position with ProPhotonix.
  • using ProPhotonix’s property or information or his or her position for improper personal gain, or; competing with ProPhotonix.

Confidentiality

Confidential information generated and gathered in ProPhotonix’s business plays a vital role in ProPhotonix’s business, prospects and ability to compete. “Confidential information” includes all non public information that might be of use to competitors or harmful to ProPhotonix or its customers if disclosed. Directors, officers and employees may not disclose or distribute ProPhotonix’s confidential information, except when disclosure is authorized by ProPhotonix or required by applicable law, rule or regulation or pursuant to an applicable legal proceeding. Directors, officers and employees shall use confidential information solely for legitimate company purposes. Directors, officers and employees must return all of ProPhotonix’s confidential and/or proprietary information in their possession to ProPhotonix when they cease to be employed by or to otherwise serve ProPhotonix.

Nothing set forth in this or any other policy, handbook or agreement of ProPhotonix shall prohibit any officer, director or employee from reporting possible violations of laws or regulations to any governmental agency or governmental entity, including any disclosures that are protected under whistleblower provisions of laws or regulations. ProPhotonix’s officers, directors and employees shall not require prior authorization of any party to make such reports or disclosures, and shall not be required to notify ProPhotonix that they have made such reports or disclosures. Furthermore, nothing shall prohibit or limit them from receiving a whistleblower award or other financial benefit for participating in a government investigation.


Fair Dealing

Competing vigorously, yet lawfully, with competitors and establishing advantageous, but fair, business relationships with customers and suppliers is a part of the foundation for long-term success. However, unlawful and unethical conduct, which may lead to short-term gains, may damage a company’s reputation and long-term business prospects. Accordingly, it is ProPhotonix’s policy that directors, officers and employees must endeavor to deal ethically and lawfully with ProPhotonix’s customers, suppliers, competitors and employees in all business dealings on ProPhotonix’s behalf. No director, officer or employee should take unfair advantage of another person in business dealings on ProPhotonix’s behalf through the abuse of privileged or confidential information or through improper manipulation, concealment or misrepresentation of material facts.

Accuracy of Records

The integrity, reliability and accuracy in all material respects of ProPhotonix’s books, records and financial statements are fundamental to ProPhotonix’s continued and future business success. No director, officer or employee may cause ProPhotonix to enter into a transaction with the intent to document or record it in a deceptive or unlawful manner. In addition, no director, officer or employee may create any false or artificial documentation or book entry for any transaction entered into by ProPhotonix. Similarly, officers and employees who have responsibility for accounting and financial reporting matters have a responsibility to accurately record all funds, assets and transactions on ProPhotonix’s books and records.


Quality of Public Disclosures

ProPhotonix is committed to providing its shareholders with accurate information about its financial condition and results of operations in accordance with the securities laws of the United States, the United Kingdom (UK) and the AIM Rules for Companies. It is ProPhotonix’s policy that the reports and documents it files with or submits to the Securities and Exchange Commission or to a Regulatory Information Service approved by the UK’s Financial Conduct Authority for distribution to the public in accordance with the AIM Rules for Companies and its earnings releases and similar public communications, include full, fair, timely and understandable disclosure. Officers and employees who are responsible for these filings and disclosures, including ProPhotonix’s principal executive, financial and accounting officers, must use reasonable judgment and perform their responsibilities honestly, ethically and objectively in order to ensure that this disclosure policy is fulfilled. ProPhotonix’s senior management is primarily responsible for monitoring ProPhotonix’ public disclosure.

 

Conflicts of Interest

Directors, officers and employees of ProPhotonix should avoid situations that present a potential or actual conflict between their personal interests and ProPhotonix’s interests. While ProPhotonix recognizes and respects the right of its directors, officers and employees to engage in outside activities, these activities may not impair or interfere with the performance of their duties to ProPhotonix or their ability to act in ProPhotonix’s best interests.

A “conflict of interest” occurs when a personal interest of a director, officer or employee interferes with ProPhotonix’s interests. Conflicts of interest may arise in many situations. For example, conflicts of interest can arise when a director, officer or employee takes an action or has an outside interest, responsibility or obligation that may make it difficult for him or her to perform the responsibilities of his or her position objectively and/or effectively in ProPhotonix’s best interests. Conflicts of interest may also occur when a director, officer or employee or his or her immediate family member receives some personal benefit as a result of the director’s, officer’s or employee’s position with ProPhotonix.

Some specific prohibited examples of conflicts are accepting or offering bribes and kickbacks; accepting gifts that could cause you to feel an obligation; and investing in or providing services to other companies that compete, do business, or are negotiating to do business with ProPhotonix.

Any transaction or relationship that reasonably could be expected to give rise to a conflict of interest should be reported promptly to the Compliance Officer. The Compliance Officer may notify the Board of Directors or a committee thereof as he or she deems appropriate. Actual or potential conflicts of interest involving a director, executive officer or member of the Finance Department may be disclosed directly to the Chairman of the Board of Directors.

Harassment and Sexual Harassment

ProPhotonix supports a workplace that is free from unlawful harassment. We expect that all directors, officers, and employees will treat each other with fairness and respect. Harassment on the basis of race, color, national origin, religion, gender, disability, sexual orientation or as otherwise prohibited under applicable law, will not be tolerated and is strictly prohibited. Harassment includes, without limitation, verbal harassment (derogatory statements, slurs, epithets), physical harassment (assault, physical interference), visual harassment (cartoons, drawings, postings, e-mail) and innuendo.

All directors, officers, and employees are strictly prohibited from sexually harassing and making improper or unwelcome sexual advances toward other employees. This prohibition includes not only supervisor-subordinate actions but also applies to actions between co-workers or others on Company premises with whom employees have regular contact, such as independent contractors and vendors. In addition, ProPhotonix prohibits anyone from encouraging, condoning or otherwise permitting sexual harassment. Sexual harassment is unwelcome sexual advances, requests for sexual favors or other conduct of a sexual nature that (1) is made a term or condition of employment, (2) is used as the basis of employment or advancement decisions, or (3) has the purpose or effect of unreasonably interfering with work or creating an intimidating, hostile or offensive work environment.


Drug Free Workplace

ProPhotonix is a drug-free workplace and prohibits the illicit use, possession, sale, conveyance, distribution, or manufacture of illegal drugs, or controlled substances in any amount or in any manner. Any violation of this policy will results in disciplinary action, up to and including termination and referral for criminal prosecution. In addition, ProPhotonix prohibits the abuse of alcohol or prescription drugs while performing your job duties on ProPhotonix premises.

 

Securities Trading and Inside Information Policy

United States Federal and state securities laws prohibit the purchase or sale of securities, such as ProPhotonix common stock, while in the possession of material non-public information. Disclosing such information, whether intentionally, carelessly or negligently to others who trade in such securities in light of that information is referred to as “tipping” and is also prohibited by these laws. If any director, officer, or employee of ProPhotonix has material non-public information relating to ProPhotonix, it is our policy that neither that person nor any person who shares the same household may buy, sell or otherwise transfer securities of ProPhotonix or engage in any other action to take advantage of, or pass on to others (“tipping”), that information. This policy also applies to trading in the securities of other companies, including our partners, customers and suppliers, while in possession of material non-public information relating to the other company.

Directors, officers, and senior management of ProPhotonix will be subject to additional restrictions relating to trading in ProPhotonix securities, including “black out” periods, that may be promulgated from time to time.

In addition, as ProPhotonix is a company with securities admitted to trading on the AIM market of the London Stock Exchange, it must comply with the AIM Rules for Companies and the Market Abuse Regulation (EU No 596/2014). Accordingly, the following inside information policy (this policy) applies to all directors, officers and employees (applicable persons) of ProPhotonix and its subsidiaries (the Group). It has been designed to ensure that applicable persons do not misuse, or place themselves under suspicion of misusing, information about the Group which applicable persons have and which is not public.

  1. An applicable person must not deal in any securities of ProPhotonix if such applicable person is in possession of inside information about ProPhotonix and/or its subsidiaries. An applicable person must not recommend or encourage someone else to deal in ProPhotonix’s securities at that time – even if such applicable person will not profit from such dealing.
  2. An applicable person must not disclose any confidential information about the Group (including any inside information) except where such applicable person is required to do so as part of his or her employment or duties. This means that applicable person should not share the Group’s confidential information with family, friends or business acquaintances.
  3. The Group also operates a Dealing Code which applies to the Company’s directors and to employees who are able to access restricted information about the Group (for example, employees who are involved in the preparation of the Group’s financial reports and those working on other sensitive matters). An applicable person will be told if he or she is required to comply with the Dealing Code. Directors and employees who are required to comply with the Dealing Code must also comply with this policy.
  4. Failure to comply with this policy may result in internal disciplinary action. It may also mean that an applicable person has committed a civil and/or criminal offence.
  5. If you have any questions about this policy, or if you are not sure whether you can deal in securities at any particular time, please contact the Compliance Officer.

For the purposes of this policy:

  • deal and dealing covers any type of transaction in ProPhotonix’s securities, including purchases, sales, the exercise of options and using securities as collateral for a loan.
  • inside information is information about ProPhotonix or its securities which is not publicly available, which is likely to have a non-trivial effect on the price of such securities and which an investor would be likely to use as part of the basis of his or her investment decision.
    securities are any publicly traded or quoted shares or debt instruments, and any linked derivatives or financial instruments. This would include shares, depositary receipts, options and bonds

Foreign Corrupt Practices Act and UK Bribery Act

The Foreign Corrupt Practices Act (FCPA) is a criminal bribery law with severe penalties that makes it illegal to pay authorize, or promise or offer a corrupt payment (or anything of value) directly or indirectly to a “foreign government official” for the purpose of causing the government official to act or fail to act or otherwise use his or her influence to assist ProPhotonix in obtaining, retaining or directing business.

Without the advance written approval of the Compliance Officer and our legal counsel, employees are not permitted to promise, authorize, offer or make any payment, including for travel, lodging or entertainment, in money, products or services, directly or indirectly, to any “foreign government official ” (defined broadly). In addition, the Compliance Officer and our legal counsel should be consulted before ProPhotonix hires any foreign agent, representative or consultant.

In addition, as ProPhotonix carries on business in the UK through it’s UK subsidiary, its UK subsidiary has adopted an anti-corruption and bribery policy in compliance with the UK’s Bribery Act 2010 and a copy of this policy is set out in the UK company employee handbook.

 

Antitrust Laws

Antitrust laws are designed to protect the free market and encourage competition. Violating these laws can have very severe consequences not only for ProPhotonix, but also for individual employees (including civil and criminal penalties). You should always consult our legal counsel before entering into any agreement, or even sharing information, with competitors. The following types of agreements between competitors are almost always illegal: setting prices (you should not exchange price, or other competitively sensitive information, with competitors without first checking with legal counsel); allocating markets and customers; and boycotting (you should not agree to exclude other competitors or agree with competitors to boycott suppliers or customers).

You also need to be careful in entering agreements with our customers and suppliers that may raise antitrust issues. The following agreements are presumed to be illegal: fixing resale prices (you should not agree with customers on the minimum price which they will re-sell our product or service); and tying products (you should not require a customer to purchase a product that it does not want in order to buy the product it does want).

Political Activities and Solicitations

No ProPhotonix funds or resources may be, directly or indirectly, given to, or used on behalf of, any political party or organization. You are free to contribute and donate your personal resources in any manner consistent with federal, state and local laws. Solicitations in any sort that are coercive in nature are prohibited and should be immediately reported to the Compliance Officer.

A Note About Other Obligations

ProPhotonix’s directors, officers and employees generally have other legal and contractual obligations to ProPhotonix. This Code is not intended to reduce, limit or otherwise modify the other obligations that you may have to ProPhotonix. Instead, the standards in this Code should be viewed as the minimum standards that ProPhotonix expects from its directors, officers and employees in the conduct of ProPhotonix’s business.

 

Compliance Procedures

Monitoring Compliance and Disciplinary Action

ProPhotonix’s management, under the supervision of its Board of Directors shall take reasonable steps from time to time to (i) monitor compliance with this Code, including the establishment of monitoring systems that are reasonably designed to investigate and detect conduct in violation of this Code, and (ii) when appropriate, impose and enforce appropriate disciplinary measures for violations of this Code.

Disciplinary measures for violations of this Code may include, but are not limited to, counseling, oral or written reprimands, warnings, probation or suspension with or without pay, demotions, reductions in salary, termination of employment or service and restitution.


Reporting Concerns/Receiving Advice

If any employee believes that actions have taken place, may be taking place, or may be about to take place that violate or would violate this Code, he or she should bring the matter to the attention of the Compliance Officer.

The best starting point for an officer or employee seeking advice on ethics related issues or reporting potential violations of this Code will usually be his or her supervisor. However, if the conduct in question involves his or her supervisor, if the employee has reported the conduct in question to his or her supervisor and does not believe that he or she has dealt with it properly, or if the officer or employee does not feel that he or she can discuss the matter with his or her supervisor, the employee may raise the matter directly with the Compliance Officer.

 

Communication Alternatives

Any officer or employee may communicate with the Compliance Officer by any of the following methods:

  • To the Audit Committee’s designee via the Whistleblower Hotline at (617) 399-6935. The Whistleblower Hotline is monitored by the Chairman of the Audit Committee.
  • In writing to: Mr. Raymond Oglethorpe, c/o BRL Law Group LLC, 425 Boylston Street, Third Floor, Boston, MA 02116.
  • In writing, addressed to the Compliance Officer either by facsimile to 603-898-8851 or by U.S. mail to 13 Red Roof Lane, Suite 200, Salem, NH 03079.
  • By email to Edward Dolan at edolan@prophotonix.com (anonymity cannot be maintained.)
  • By telephone: (603) 870-8206 direct line.

Reporting Accounting and Similar Concerns

Officers and employees may communicate with the Audit Committee or its designee. Any concerns or questions regarding potential violations of this Code, other company policy or procedure or applicable law, rules or regulations which involve accounting, internal accounting controls or auditing matters should be directed to the Audit Committee or a designee of the Audit Committee.


Misuse of Reporting Channels

Employees may not use these reporting channels in bad faith or in a false or frivolous manner.

 

Anonymity in Reporting

When reporting suspected violations of this Code, ProPhotonix prefers that officers and employees identify themselves in order to facilitate ProPhotonix’s ability to take appropriate steps to address the report, including conducting any appropriate investigation. However, ProPhotonix also recognizes that some people may feel more comfortable reporting a suspected violation anonymously.

If an officer or employee wishes to remain anonymous, he or she may do so, and ProPhotonix will use reasonable efforts to protect the confidentiality of the reporting person subject to applicable law, rule or regulation or to any applicable legal proceedings. In the event the report is made anonymously, however, ProPhotonix may not have sufficient information to look into or otherwise investigate or evaluate the allegations. Accordingly, persons who make reports anonymously should provide as much detail as is reasonably necessary to permit ProPhotonix to evaluate the matter(s) set forth in the anonymous report and, if appropriate, commence and conduct an appropriate investigation.


No Retaliation

ProPhotonix expressly forbids any retaliation against any officer or employee who, acting in good faith, reports suspected misconduct. Any person who participates in any such retaliation is subject to disciplinary action, including termination.


Waivers and Amendments

No waiver of any provisions of this Code for the benefit of a director or an executive officer (which includes without limitation, for purposes of this Code, ProPhotonix’s principal executive, financial and accounting officers) shall be effective unless approved by the Board of Directors.

Any waivers of this Code for other employees may be made by the Compliance Officer, the Board of Directors or, if permitted, a committee thereof.

All amendments to this Code must be approved by the Board of Directors or a committee thereof and, if applicable, must be promptly disclosed to ProPhotonix’s shareholders in accordance with applicable United States securities laws and/or the rules and regulations of the exchange or system on which ProPhotonix’s shares are traded or quoted, as the case may be.

Approved by the Board of Directors on November 1, 2016

© 2018 ProPhotonix, Limited. All Rights Reserved

 

I would like to receive relevant product updates, updates on events, whitepaper and case study release notifications and company news.

By submitting this form you acknowledge that your personal information will be processed in accordance with our Privacy Statement.