CODE OF BUSINESS CONDUCT AND ETHICS
THIS CODE APPLIES TO EVERY DIRECTOR, OFFICER (INCLUDING OUR CHIEF EXECUTIVE
OFFICER ("CEO") AND CHIEF FINANCIAL OFFICER ("CFO")), AND EMPLOYEE OF EL NINO
VENTURES INC. (THE "COMPANY"). THE TERM EMPLOYEE INCLUDES ANY INDIVIDUAL THAT IS
PAID ON THE COMPANY PAYROLL.
To further the Company's fundamental principles of honesty, loyalty, fairness
and forthrightness, we have established this Code of Business Conduct and Ethics
(this "Code"). Our Code strives to deter wrongdoing and promote the following
Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
Full, fair, accurate, timely and transparent disclosure;
Compliance with the applicable government and self-regulatory organization
laws, rules and regulations;
Prompt internal reporting of Code violations; and
Accountability for compliance with the Code.
Below, we discuss situations that require application of our fundamental
principles and promotion of our objectives. If there is a conflict between this
Code and a specific procedure you should consult the CEO, or another officer as
may be designated by the CEO from time to time for guidance. The CEO, in the
event of a conflict between this Code and any such procedure, or for any other
guidance in respect of this Code absent a specific referral herein, should
consult the Chairman of the Audit Committee of the Board of Directors.
Accountability for Compliance with the Code
Each of the Company's directors, officers and employees is expected to:
Understand. The Company expects you to understand the requirements of your
position including company expectations and governmental rules and regulations
that apply to your position.
Comply: The Company expects you to comply with this Code and all applicable
laws, rules and regulations.
Report: The Company expects you to report any violation of this Code of which
you become aware.
Be Accountable: The Company holds you accountable for complying with this Code.
The Company and each of its subsidiaries will make and keep books, records and
accounts, which in reasonable detail accurately and fairly present the
transactions and disposition of the assets of the Company.
All directors, officers, employees and other persons are prohibited from
directly or indirectly falsifying or causing to be false or misleading any
financial or accounting book, record or account. You and others are expressly
prohibited from directly or indirectly manipulating an audit, and from
destroying or tampering with any record, document or tangible object with the
intent to obstruct a pending or contemplated audit, review or federal
investigation. The commission of, or participation in, one of these prohibited
activities or other illegal conduct will subject you to government penalties, as
well as punishment of up to and including termination of employment.
No director, officer or employee of the Company may directly or indirectly;
- Make or cause to be made a materially false or misleading statement, or
- Omit to state, or cause another person to omit to state, any material fact
necessary to make statements made not misleading in connection with the audit of
financial statements by independent accountants, the preparation of any required
reports whether by independent or internal accountants, or any other work which
involves or relates to the filing of a document with the U.S. Securities and
Exchange Commission ("SEC") or applicable Canadian securities regulatory
Amendments and Modifications of this Code
There shall be no amendment or modification to this Code except by a vote of the
Board of Directors or a designated board committee that will ascertain whether
an amendment or modification is appropriate.
In case of any amendment or modification of this Code that applies to an officer
or director of the Company, the amendment or modification shall be posted on the
Company's website within two days of the board vote or shall be otherwise
disclosed as required by applicable law or TSX Venture Exchange rules. Notice
posted on the website shall remain there for a period of 12 months and shall be
retained in the Company's files as required by law.
If you wish to report a suspected violation of this Code anonymously, you may
call the Chairman of the Audit Committee of the Board of Directors. You do not
have to reveal your identity in order to make a report. If you do reveal your
identity, it will not be disclosed by the Chairman of the Audit Committee unless
disclosure is unavoidable during an investigation.
Anti-Boycott and U.S. Sanctions Laws
The Company must comply with anti-boycott laws, which prohibit it from
participating in, and require us to report to the authorities any request to
participate in, a boycott of a country or businesses within a country. If you
receive such a request, report it to the CEO. We will also not engage in
business with any government, entity, organization or individual where doing so
is prohibited by applicable laws. For more information on these laws contact CEO
who will consult with or refer you to the appropriate Company legal
Antitrust and Fair Competition Laws
The purpose of antitrust laws in Canada, the United States and most other
countries is to provide a level playing field to economic competitors and to
promote fair competition. No director, officer or employee, under any
circumstances or in any context, may enter into any understanding or agreement,
whether express or implied, formal or informal, written or oral, with an actual
or potential competitor, which would illegally limit or restrict in any way
either party's actions, including the offers of either party to any third party.
This prohibition includes any action relating to prices, costs, profits,
products, services, terms or conditions of sale, market share or customer or
supplier classification or selection.
It is our policy to comply with all Canadian, U. S. and all other applicable
antitrust laws. This policy is not to be compromised or qualified by anyone
acting for or on behalf of our Company. You must understand and comply with the
antitrust laws as they may bear upon your activities and decisions.
Anti-competitive behavior in violation of antitrust laws can result in criminal
penalties, both for you and for the Company. Accordingly, any question regarding
compliance with antitrust laws or your responsibilities under this policy should
be directed to the Designated Officer. Any director, officer or employee found
to have knowingly participated in violating the antitrust laws will be subject
to disciplinary action, up to and including termination of employment.
Below are some scenarios that are prohibited and scenarios that could be
prohibited to antitrust reasons. These scenarios are not an exhaustive list of
all prohibited and possibly prohibited antitrust conduct. When in doubt about
any situation, whether it is discussed below or not, you should consult with the
The following scenarios are prohibited for antitrust or anti-competition
Proposals or agreements or understandings---express or implied, formal or
informal, written or oral---with any competitor regarding any aspect of
competition between the Company and the competitor for sales to third parties.
Proposals or agreements or understandings with customers which restrict the
price or other terms at which the customer may resell or lease any product or
service to a third party.
Proposals or agreements or understandings with suppliers which restrict the
price or other terms at which the Company may resell or lease any product or
service to a third party.
The following business arrangements could raise anti-competition or antitrust
law issues. Before entering into them, you must consult with the Designated
Exclusive arrangements for the purchase or sale of products or services.
Bundling of goods and services.
Technology licensing agreements that restrict the freedom of the license or
Agreements to add an employee of the Company to another entity's Board of
You are strictly forbidden from offering, promising or giving money, gifts,
loans, rewards, favors or anything of value to any governmental official,
employee, agent or other intermediary which is prohibited by law. Those paying a
bribe may subject the Company and themselves to civil and criminal penalties.
When dealing with government customers or officials, no improper payments will
be tolerated. If you receive any offer of money or gifts that is intended to
influence a business decision, it should be reported to your supervisor or the
The Company prohibits improper payments in all of its activities, whether these
activities are with governments or in the private sector.
Compliance with Laws, Rules and Regulations
The Company's goal and intention is to comply with the laws, rules and
regulations by which we are governed. In fact, we strive to comply not only with
requirements of the law but also with recognized compliance practices. All
illegal activities or illegal conduct are prohibited whether or not they are
specifically set forth in this Code.
Where law does not govern a situation or where the law is unclear or
conflicting, you should discuss the situation with your supervisor and
management should seek advice from the CEO, who will consult with or refer you
to the appropriate Company legal representatives. Business should always be
conducted in a fair and forthright manner. Directors, officers and employees are
expected to act according to high ethical standards.
Computer and Information Systems
For business purposes, officers and employees are provided telephones and
computer workstations and software, including network access to computing
systems such as the Internet and e-mail, to improve personal productivity and to
efficiently manage proprietary information in a secure and reliable manner. You
must obtain the permission from the CEO to install any software on any Company
computer or connect any personal laptop to the Company network. As with other
equipment and assets of the Company, we are each responsible for the appropriate
use of these assets. Except for limited personal use of the Company's telephones
and computer/e-mail, such equipment may be used only for business purposes.
Officers and employees should not expect a right to privacy of their e-mail or
Internet use. All e-mails or Internet use on Company equipment may be subject to
monitoring by the Company.
Confidential Information Belonging To Others
You must respect the confidentiality of information, including, but not limited
to, trade secrets and other information given in confidence by others, including
but not limited to partners, suppliers, contractors, competitors or customers,
just as we protect our own confidential information. However, certain
restrictions about the information of others may place an unfair burden on the
Company's future business. For that reason, directors, officers and employees
should coordinate with the CEO to ensure appropriate agreements are in place
prior to receiving any confidential third-party information. These agreements
must reflect a balance between the value of the information received on the one
hand and the logistical and financial costs of maintaining confidentiality of
the information and limiting the Company's business opportunities on the other.
In addition, any confidential information that you may possess from an outside
source, such as a previous employer, must not, so long as such information
remains confidential, be disclosed to or used by the Company. Unsolicited
confidential information submitted to the Company should be refused, returned to
the sender where possible and deleted, if received via the Internet.
Confidential and Proprietary Information
It is the Company's policy to ensure that all operations, activities and
business affairs of the Company and our business associates are kept
confidential to the greatest extent possible. Confidential information includes
all non-public information that might be of use to competitors, or that might be
harmful to the Company or its customers if disclosed. Confidential and
proprietary information about the Company or its business associates belongs to
the Company, must be treated with strictest confidence and is not to be
disclosed or discussed with others.
Unless otherwise agreed to in writing, confidential and proprietary information
includes any and all methods, inventions, improvements or discoveries, whether
or not patentable or copyrightable, and any other information of a similar
nature disclosed to the directors, officers or employees of the Company or
otherwise made known to the Company as a consequence of or through employment or
association with the Company (including information originated by the director,
officer or employee). This can include, but is not limited to, information
regarding the Company's business, products, processes, and services. It also can
include information relating to research, development, inventions, trade
secrets, intellectual property of any type or description, data, business plans,
marketing strategies, engineering, contract negotiations and business methods or
The following are examples of information that is not considered confidential:
Information that is in the public domain to the extent it is readily
Information that becomes generally known to the public other than by
disclosure by the Company or a director, officer or employee; or
Information you receive from a party that is under no legal obligation of
confidentiality with the Company with respect to such information.
We have exclusive property rights to all confidential and proprietary
information regarding the Company or our business associates. The unauthorized
disclosure of this information could destroy its value to the Company and give
others an unfair advantage. You are responsible for safeguarding Company
information and complying with established security controls and procedures. All
documents, records, notebooks, notes, memoranda and similar repositories of
information containing information of a secret, proprietary, confidential or
generally undisclosed nature relating to the Company or our operations and
activities made or compiled by the director, officer or employee or made
available to you prior to or during the term of your association with the
Company, including any copies thereof, unless otherwise agreed to in writing,
belong to the Company and shall be held by you in trust solely for the benefit
of the Company, and shall be delivered to the Company by you on the termination
of your association with us or at any other time we request.
Conflicts of Interest
Conflicts of interest can arise in virtually every area of our operations. A
"conflict of interest" exists whenever an individual's private interests
interfere or conflict in any way (or even appear to interfere or conflict) with
the interests of the Company. We must strive to handle in an ethical manner any
actual or apparent conflicts of interest between personal and professional
relationships. We must each make decisions solely in the best interest of the
Company. Any business, financial or other relationship with suppliers, customers
or competitors that might impair or appear to impair the exercise of our
judgment solely for the benefit of the Company is prohibited.
Here are some examples of conflicts of interest:
Family Members. Actions of family members may create a conflict of
interest. For example, gifts to family members by a supplier of the Company are
considered gifts to you and must be reported. Doing business for the Company
with organizations where your family members are employed or that are partially
or fully owned by your family members or close friends may create a conflict or
the appearance of a conflict of interest. For purposes of the Code "family
members" include any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, and adoptive relationships.
Gifts, Entertainment, Loans, or Other Favors. Directors, officers and
employees shall not seek or accept personal gain, directly or indirectly, from
anyone soliciting business from, or doing business with the Company, or from any
person or entity in competition with us. Examples of such personal gains are
gifts, non-business-related trips, gratuities, favors, loans, and guarantees of
loans, excessive entertainment or rewards. However, you may accept gifts of a
nominal value. Other than common business courtesies, directors, officers,
employees and independent contractors must not offer or provide anything to any
person or organization for the purpose of influencing the person or organization
in their business relationship with us.
Directors, officers and employees are expected to deal with advisors or
suppliers who best serve the needs of the Company as to price, quality and
service in making decisions concerning the use or purchase of materials,
equipment, property or services. Directors, officers and employees who use the
company's advisors, suppliers or contractors in a personal capacity are expected
to pay market value for materials and services provided.
Outside Employment. Officers and employees may not participate in outside
employment, self-employment, or serve as officers, directors, partners or
consultants for outside organizations, if such activity:
1. reduces work efficiency;
2. interferes with your ability to act conscientiously in our best interest; or
3. requires you to utilize our proprietary or confidential procedures, plans or
You must inform your supervisor of any outside employment, including the
employer's name and expected work hours.
Reporting Conflicts of Interest or Potential Conflicts of Interest.
You should report any actual or potential conflict of interest involving
yourself or others of which you become aware to your supervisor or CEO. Officers
should report any actual or potential conflict of interest involving yourself or
others of which you become aware to the Audit Committee of the Board of
Directors. Directors should report any actual or potential conflict of interest
involving yourself or others of which you become aware to the Chairman of the
Audit Committee of the Board of Directors.
See Investor Relations and Public Affairs.
Corporate Opportunities and Use and Protection of Company Assets
You are prohibited from:
- taking for yourself, personally, opportunities that are discovered through the
use of Company property, information or position;
- using Company property, information or position for personal gain; or
- competing with the Company.
You have a duty to the Company to advance its legitimate interests when the
opportunity to do so arises.
You are personally responsible and accountable for the proper expenditure of
Company funds, including money spent for travel expenses or for business
entertainment. You are also responsible for the proper use of property over
which you have control, including both Company property and funds and property
that has been entrusted to your custody. Company assets must be used only for
Company property should not be misused. Company property may not be sold, loaned
or given away regardless of condition or value, without proper authorization.
Each director, officer and employee should protect our assets and ensure their
efficient use. Theft, carelessness and waste have a direct impact on the
Company's profitability. Company assets should be used only for legitimate
Discipline for Noncompliance with this Code
Disciplinary actions for violations of this Code of Business Conduct and Ethics
can include oral or written reprimands, suspension or termination of employment
or a potential civil lawsuit against you.
The violation of laws, rules or regulations, which can subject the Company to
fines and other penalties, may result in your criminal prosecution.
Disclosure Policies and Controls
The continuing excellence of the Company's reputation depends upon our full and
complete disclosure of important information about the Company that is used in
the securities marketplace. Our financial and non-financial disclosures and
filings with applicable Canadian securities regulatory authorities must be
transparent, accurate and timely. Proper reporting of reliable, truthful and
accurate information is a complex process involving cooperation among many of
us. We must all work together to insure that reliable, truthful and accurate
information is disclosed to the public.
The Company must disclose to the applicable Canadian securities regulatory
authorities, current security holders and the investing public information that
is required, and any additional information that may be necessary to ensure the
required disclosures are not misleading or inaccurate. The Company requires you
to participate in the disclosure process, which is overseen by the CEO and CFO.
The disclosure process is designed to record, process, summarize and report
material information as required by all applicable laws, rules and regulations.
Participation in the disclosure process is a requirement of a public company,
and full cooperation and participation by the CEO and CFO and, upon request,
other managers and employees in the disclosure process is a requirement of this
Officers and employees must fully comply with their disclosure responsibilities
in an accurate and timely manner (within the guidelines of applicable securities
regulatory authorities) or be subject to discipline of up to and including
termination of employment.
Environment, Health and Safety
The Company is committed to managing and operating our assets in a manner that
is protective of human health and safety and the environment. It is our policy
to comply, in all material respects, with applicable health, safety and
environmental laws and regulations. Each employee is also expected to comply
with our policies, programs, standards and procedures.
Fair Dealing with Others
No director, officer or employee should take unfair advantage of anyone through
manipulation, concealment, abuse of privileged information, misrepresentation of
material facts or any other unfair-dealing practice.
Filing of Government Reports
Any reports or information provided, on our behalf, to federal, provincial,
territorial, state, local or foreign governments should be true, complete and
accurate. Any omission, misstatement or lack of attention to detail could result
in a violation of the reporting laws, rules and regulations.
Insider Trading or Tipping
Directors, officers and employees who are aware of material, non-public
information from or about the Company (an "insider"), are not permitted,
directly or through family members or other persons or entities, to:
Buy or sell securities (or derivatives relating to such securities) of the
Company, including transfers in or out of the stock funds in the Employee
Savings Plan (other than pursuant to a pre-approved trading plan that complies
with the SEC Rule 10b5-1), or
Pass on, tip or disclose material, nonpublic information to others outside the
Company including family and friends.
Such buying, selling or trading of securities may be punished by discipline of
up to and including termination of employment; civil actions, resulting in
penalties of up to three times the amount of profit gained or loss avoided by
the inside trade or stock tip; or criminal actions, resulting in fines and jail
time. Any questions concerning the above and as to whether communication of
particular information is permissible should be referred to the CEO.
Examples of information that may be considered material, non-public information
in some circumstances are:
Undisclosed annual, quarterly or monthly financial results, a change in
earnings or earnings projections, or unexpected or unusual gains or losses in
Undisclosed negotiations and agreements regarding mergers, concessions, joint
ventures, acquisitions, divestitures, business combinations or tender offers;
Undisclosed drilling results or reserve or resource calculations;
Undisclosed major management changes;
A substantial contract award or termination that has not been publicly
A major lawsuit or claim that has not been publicly disclosed;
Undisclosed information about public or private financings, or decisions
concerning matters such as dividends or stock splits;
An undisclosed filing of a bankruptcy petition by the Company or a significant
Information that is considered confidential; and
Any other undisclosed information that could affect our share price.
This list is illustrative only and is not intended to provide a comprehensive
list of circumstances that could give rise to material information. If you have
any question as to whether particular information is material, consult with the
CEO or the CFO, who will consult with legal counsel as appropriate.
Information concerning the Company is considered nonpublic if it has not been
disseminated in a manner making it available to investors generally. If you have
any questions as to whether particular information has been so disseminated,
consult with the CEO or the CFO, who will consult with legal counsel as
Another Company's Securities.
The same policy also applies to securities issued by another company if you have
acquired material, public information relating to such company in the course of
your employment or affiliation with the Company.
Trades Following Disclosure.
When material information has been publicly disclosed, each insider must
continue to refrain from buying or selling the securities in until after the
information has been publicly released to allow the markets time to absorb the
Investor Relations and Public Affairs
It is very important that the information disseminated about the Company be both
accurate and consistent. For this reason, the CEO, CFO and Manager, Investor
Relations are responsible for: (i) the Company's internal and external
communications; (ii) public communications with stockholders, analysts and other
interested members of the financial community; and (iii) communication with
spokespersons in both routine and crisis situations.
Non-Retaliation for Reporting
In no event will the Company take or threaten any action against you as a
reprisal or retaliation for making a complaint or disclosing or reporting
information in good faith. However, if a reporting individual was involved in
improper activity the individual may be appropriately disciplined even if he or
she was the one who disclosed the matter to the Company. In these circumstances,
we may consider the conduct of the reporting individual in reporting the
information as a mitigating factor in any disciplinary decision.
We will not allow retaliation against any employee for reporting a possible
violation of this Code in good faith. Retaliation for reporting a federal
offense is illegal under federal law and prohibited under this Code. Retaliation
for reporting any violation of a law, rule or regulation or a provision of this
Code is prohibited. Retaliation will result in discipline up to and including
termination of employment and may also result in criminal prosecution.
You must refrain from making any use of Company, personal or other funds or
resources on behalf of the Company for political or other purposes which are
improper or prohibited by the applicable federal, provincial, territorial,
state, local or foreign laws, rules or regulations. Company contributions or
expenditures in connection with election campaigns will be permitted only to the
extent allowed by federal, provincial, territorial, state, local or foreign
election laws, rules and regulations.
You are encouraged to participate actively in the political process. We believe
that individual participation is a continuing responsibility of those who live
in a free country.
We have policies prohibiting the use of alcohol, illegal drugs or other
prohibited items, including legal drugs which affect the ability to perform
one's work duties, while on Company premises. We also prohibit the possession or
use of alcoholic beverages, firearms, weapons or explosives on our property
unless authorized by the Designated Officer. You are also prohibited from
reporting to work while under the influence of alcohol or illegal drugs.
See Investor Relations and Public Affairs.
We have document retention policies to establish retention periods for records
created or received in the normal course of business. A record is any
information, regardless of physical format, which has been created or received
in the transaction of the Company's business. Physical format of a record
includes hard copy, electronic, magnetic tape, disk, audio, video, optical
image, etc. Each corporate department is responsible for the maintenance,
retrieval, transfer, and destruction of its records in accordance with the
established filing procedures, records retention schedules and procedures.
The alteration, destruction or falsification of corporate documents or records
may constitute a criminal act. Destroying or altering documents with the intent
to obstruct a pending or anticipated official government proceeding is a
criminal act and could result in large fines and a prison sentence of up to 20
years. Document destruction or falsification in other contexts can result in a
violation of the federal securities laws or the obstruction of justice laws.
Before any destruction of any documents or records, you must consult the
Company's document retention procedures. You are required to review, follow and
abide by the terms of those procedures. If the procedure is not clear, questions
arise, or there is a pending or anticipated official proceeding, then the CEO
must approve any document destruction.
Relations Among Employees: Respect and Contribution
We function as a team. Your success as part of this team depends on your
contribution and ability to inspire the trust and confidence of your coworkers
and supervisors. Respect for the rights and dignity of others and a dedication
to the good of our Company are essential.
A cornerstone of our success is the teamwork of our directors, officers and
employees. We must each respect the rights of others while working as a team to
fulfill our objectives. To best function as part of a team, you must be
trustworthy and dedicated to high standards of performance. The relationships
between business groups also require teamwork.
To facilitate respect and contribution among employees, we have implemented the
following employment policies:
To hire, pay and assign work on the basis of qualifications and performance;
Not to discriminate on the basis of race, religion, ethnicity, national
origin, color, gender, age, citizenship, veteran's status, marital status or
To attract and retain a highly talented workforce;
To encourage skill growth through training and education and promotional
To encourage an open discussion between all levels of employees and to provide
an opportunity for feedback from the top to the bottom and from the bottom to
To prohibit any sexual, physical, verbal or any other kind of harassment by
others while an employee is on the job;
To make the safety and security of our employees while at Company facilities a
To recognize and reward additional efforts that go beyond our expectations;
To respect all workers' rights to dignity and personal privacy by not
disclosing employee information, including protected health information,
Reporting of Code Violations
You should be alert and sensitive to situations that could result in actions
that might violate federal, state, or local laws or the standards of conduct set
forth in this Code. If you believe your own conduct or that of a fellow employee
may have violated any such laws or this Code, you have an obligation to report
Generally, you should raise such matters first with an immediate supervisor.
However, if you are not comfortable bringing the matter up with your immediate
supervisor, or do not believe the supervisor has dealt with the matter properly,
then you should raise the matter with CEO or the CFO or, if a law, rule or
regulation is in question, then consult with the CEO or the CFO, who will
consult with or refer you to the appropriate Company legal representatives. The
most important point is that possible violations should be reported and we
support all means of reporting them.
Directors and officers should report any potential violations of this Code to
the Audit Committee of the Board of Directors.
There shall be no waiver of any part of this Code for any director or officer
except by a vote of the Board of Directors or a designated board committee that
will ascertain whether a waiver is appropriate under all the circumstances. In
case a waiver of this Code is granted to a director or officer, the notice of
such waiver shall be posted on our website within five days of the Board of
Directors' vote or shall be otherwise disclosed as required by applicable law or
Stock Exchange rule. Notices posted on our website shall remain there for a
period of 12 months and shall be retained in our files as required by law.
A waiver for a specific event arising under the "Conflicts of Interest" section
of this Code may be granted to an employee that is not a director or officer on
the approval of two of the following officers: the CEO and one of the Board of
Directors. No other waivers of this Code are permitted.
This Code is an attempt to point all of us at the Company in the right
direction, but no document can achieve the level of principled compliance that
we are seeking. In reality, each of us must strive every day to maintain our
awareness of these issues and to comply with the Code's principles to the best
of our abilities. Before we take an action, we must always ask ourselves:
Does it feel
action ethical in every way?
action in compliance with the law?
action create an appearance of impropriety?
Am I trying
to fool anyone, including myself, about the propriety of this action?
If an action would elicit the wrong answer to any of these questions, do not
take it. We cannot expect perfection, but we do expect good faith. If you act in
bad faith or fail to report illegal or unethical behavior, then you will be
subject to disciplinary procedures. We hope that you agree that the best course
of action is to be honest, forthright and loyal at all times.