Investor Relations
Corporate Governance
3PEA is dedicated to practicing the highest standards of corporate governance. Believing that responsible and effective governance is essential to our success, we have developed systems and procedures that are appropriate for our business. These systems and procedures are reviewed on a regular basis and updated to reflect changing regulations and best practices.
Overview
The Board of Directors of 3PEA International, Inc. (the “Company”) sets high standards for the Company’s employees, officers and directors. Implicit in this philosophy is the importance of sound corporate governance. It is the duty of the Board of Directors to serve as a prudent fiduciary for shareholders and to oversee the management of the Company’s business. To fulfill its responsibilities and to discharge its duty, the Board of Directors follows the procedures and standards that are set forth in these guidelines. These guidelines are subject to modification from time to time as the Board of Directors deems appropriate in the best interests of the Company or as required by applicable laws and regulations.
Committees
Name | Directors | Audit Committee | Compensation Committee | Nominating Committee |
Dan Henry | Chairman* | x | x | |
Mark Newcomer | Vice Chairman | |||
Dennis Triplett | Director* | x | x | |
Daniel Spence | Director | |||
Quinn Williams | Director* | x | x | |
Joan M. Herman | Director | |||
Bruce Mina | Director* | x | x |
* Independent Director
Audit Committee Charter
I. PURPOSE
- The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of 3PEA International, Inc. (the “Company”) shall oversee the Company’s accounting and financial reporting processes and the audit of the Company’s financial statements. The Committee shall assist the Board with oversight of:
- The quality and integrity of the Company’s financial statements;
- The Company’s compliance with legal and regulatory requirements;
- The independent auditor’s qualifications and independence; and
- The performance of the Company’s internal audit function and independent auditors.
- Through its activities, the Committee facilitates open communication among directors, independent auditors, the internal auditor, if any, and management by meeting in private session regularly with these parties.
- The Committee also provides oversight regarding significant financial matters, including such matters as borrowings, currency exposures, dividends, share issuance and repurchases, and the financial aspects of the Company’s benefit plans.
II. COMPOSITION AND QUALIFICATIONS
- The Committee shall consist of at least three directors, each of whom must be independent in accordance with the applicable rules of The NASDAQ Stock Market LLC (the “NASDAQ”) and Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10A- 3(b)(1) promulgated thereunder. No member of the Committee can have participated in the preparation of the Company’s (or, if applicable, any of its subsidiaries’) financial statements at any time during the past three years.
- Notwithstanding paragraph II.A above, one director who: (i) is not an independent director as defined in NASDAQ Rule 5605(a)(2); (ii) meets the criteria set forth in Section 10A(m)(3) under the Exchange Act and the rules thereunder; and (iii) is not currently an Executive Officer or employee or a Family Member of an Executive Officer, may be appointed to the audit committee, if the board determines that membership on the committee by the individual is required by the best interests of the Company and its shareholders. In the event the Committee contains a member who is not “independent,” the Company must comply with the disclosure requirements set forth in Item 407(d)(2) of Regulation S-K. A member appointed under this exception may not serve longer than two years and may not chair the audit committee. The terms“Executive Officer” and“Family Member” shallhavethe samemeaning that they are defined to have in the NASDAQ rules.
- Each member of the Committee must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement. At least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background that leads to financial sophistication, including, for example, being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
- At least one member of the Committee must be an “audit committee financial expert,” as such term is defined in rules promulgated by the Securities and Exchange Commission (the “SEC”). A Committee member who satisfies the definition of audit committee financial expert will also be presumed to have financial sophistication.
- No member of the Committee may serve simultaneously on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service will not impair the ability of such member to effectively serve on the Committee.
- No member of the Committee shall receive compensation from the Company other than director’s fees for service as a director of the Company, including reasonable compensation for serving on the Committee and regular benefits that other directors receive.
III. DUTIES AND RESPONSIBILITIES
- The Committee shall:
- Have the sole authority to appoint, retain, compensate, oversee, evaluate and, where appropriate, terminate the independent auditors who shall audit the financial statements of the Company.
- Select, retain, compensate, oversee and terminate, if necessary, any other registered public accounting firm engaged by the Company for the purpose of preparing or issue an audit report or performing other audit, review or attest services for the Company.
- Inform each registered public accounting firm performing audit or permissible non- audit services for the Company that such firm shall report directly to the Committee.
- At the beginning of each new fiscal year, review and approve the proposed scope of the fiscal year’s internal and external audit. At, or shortly after the end of each fiscal year, review with the independent auditor, the internal auditor, if any, and Company management, the audited financial statements and related opinion and costs of the audit of that year.
- Review and pre-approve any audit and permitted non-audit services to be provided by the Company’s independent auditors, and the compensation and fees to be paid to such independent auditors for such services, and establish policies and procedures for the Committee’s pre-approval of permitted services by the Company’s independent auditors. The Committee has the sole authority to make these approvals, although such approval may be delegated to any Committee member so long as the approval is presented to the full Committee at a later time.
- Review, at least annually, the qualifications, performance and independence of the independent auditor. In conducting such review, the Committee shall obtain and review a report by the independent auditor describing: (1) the audit firm’s internal quality-control procedures; (2) any material issues raised by the most recent internal quality-control review, or peer or PCAOB review of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (3) to assess the auditor’s independence, all relationships between the independent auditor and the Company. The independent auditors shall provide the Committee with a written statement describing all relationships between the auditors and the Company, and the Committee shall discuss with the independent auditors any disclosed relationships or services that may impact the objectivity or the independence of the auditors.
- Obtain and review, at least annually, a written report from the independent auditor describing (1) all critical accounting policies and practices; (2) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with Company management, the ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (3) other material written communications between the independent auditors and Company management, such as any management letter or schedule of unadjusted differences.
- Review and discuss with the independent auditors and management (1) any audit problems or other difficulties encountered by the auditor in the course of its audit work, including any restrictions on the scope of the independent auditor’s activities or on access to requested information; (2) any significant disagreements with management; and (3) management’s responses to such matters. The Committee shall oversee the resolution of any disagreements between management and the auditors regarding financial reporting.
- Review, periodically, issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; and the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.
- Review and discuss, at least annually, with the Company’s independent auditors the matters required to be discussed by PCAOB Auditing Standards No. 16 — Communications with Audit Committees and the Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU Sec. 380), as modified or supplemented.
- Review with management, the independent auditors, and the internal auditors, if any, the adequacy and effectiveness of the Company’s internal controls, and the integrity of the Company’s financial reporting process.
- Review, as applicable, funding and investment policies, implementation of funding policies and investment performance of the Company’s benefit plans.
- Review and approve any recommendations, certifications and reports that may be required by NASDAQ or the SEC, including the report of the Committee that must be included in the Company’s annual proxy statement.
- Review disclosures made to the Committee by the Company’s CEO and CFO about any significant deficiencies in the design and operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.
- Review and discuss the annual audited financial statements and quarterly financial statements with management and the independent auditor, including the disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” any major issues regarding accounting, disclosure and auditing procedures and practices, and the adequacy of internal controls that could materially affect the Company’s financial statements. Based on such annual review, the Committee shall recommend to the Board the inclusion of the financial statements in the Company’s annual report on Form 10-K.
- Discuss with management the type of presentation and type of information to be included in the Company’s earnings press releases and the financial information and earnings guidance provided to, as applicable, analysts and rating agencies.
- Establish and oversee procedures for (1) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (2) the confidential anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
- Ensure the regular rotation of the lead audit partner of the Company’s independent auditors as required by the Exchange Act and the rules of the SEC, and consider regular rotation of the registered public accounting firm serving as the Company’s independent auditors.
- Confirm with any independent auditor retained to provide audit services for any fiscal year that the lead (or coordinating) audit partner having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has not performed audit services for the Company in each of the five previous fiscal years of the Company and that the firm meets all legal and professional requirements for independence.
- Discuss with management, the independent auditors and the internal auditors, if any, the Company’s policies to govern the process by which management assesses and manages the Company’s risks, including the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.
- Endeavor to determine that auditing procedures and controls are adequate to safeguard Company assets and assess compliance with Company policies and legal requirements.
- Review and discuss with the independent auditor the Company’s internal audit function, if any, including its performance, responsibilities, staffing and budget.
- Set clear Company hiring policies for employees or former employees of the independent auditors that participated in any capacity in any Company audit.
- Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies.
- Review, approve and oversee any “related party transactions,” as such term is defined in Item 404 of Regulation S-K under the Exchange Act, on an ongoing basis, and establish appropriate procedures to receive material information about, and prior notice of, any such transaction.
- Review and evaluate, at least annually, the performance of the Committee and its members, including a review of the Committee’s compliance with this Charter.
- Review and reassess, at least annually, the adequacy of this Charter and recommend changes to the Board.
IV. PROCESS
- The Committee members shall be appointed by the Board upon the nomination of the Nominating and Corporate Governance Committee, and shall serve until such member’s successor is duly elected and qualified, or until such member’s earlier resignation or removal. The Board may remove any Committee member at any time, with or without cause. The Board shall appoint a Chairperson.
- The Committee shall meet at least four times each year. Committee meetings shall be led by the Chairperson. The Committee shall meet separately, and periodically, with management, with the internal auditors, if any, and with the independent auditor, and shall invite such individuals to its meetings as it deems necessary or appropriate to assist in carrying out its duties.
- The Committee shall have the authority to engage independent counsel and other advisers as it determines is necessary to carry out its duties. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the Company’s independent auditors, any other accounting firm engaged to perform services for the Company, any outside counsel and other advisers to the Committee, and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
- The Committee shall be given full access to the Company’s internal auditors, if any, the Chairman of the Board, Company executives and the independent auditors.
- The Committee may delegate decisions to a subcommittee of the Committee, provided that a full report of any action is promptly made to the full Committee.
- The Committee shall report regularly to the Board, and all Committee actions and any recommendations shall be promptly reported to the Board.
Compensation Committee Charter
I. PURPOSE
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of 3PEA International, Inc. (the “Company”) shall review and manage the compensation structure of the Company, administer stock incentive plans, and oversee and review various benefit plans of the Company. The Committee shall discharge the Board’s responsibilities to the shareholders, potential shareholders and investment community relating to the compensation of the Company’s executive officers.
II. COMPOSITION AND QUALIFICATIONS
The Committee shall be comprised of two or more members of the Board. At least two members of the Committee shall be determined by the Board to be “independent” under the rules of The NASDAQ Stock Market LLC (“NASDAQ”).
In the event the Committee has more than two members, at least one member of the Committee may be a Board member who is not “independent” under the rules of NASDAQ, provided that such member is not an Executive Officer or employee or a Family Member of an Executive Officer of the Company, and provided the Board determines that such individual’s membership on the Committee is required by the best interests of the Company and its shareholders. In the event the Committee contains a member who is not “independent,” the Company shall disclose either on or through the Company’s website or in the proxy statement for the next annual meeting subsequent to such determination (or, if the Company does not file a proxy, in its Form 10-K), the nature of the relationship and the reasons for the determination. In addition, the Company must provide any disclosure required by Instruction 1 to Item 407(a) of Regulation S-K regarding its reliance on this exception. A member appointed under this exception may not serve longer than two years. The terms “Executive Officer” and “Family Member” shall have the same meaning that they are defined to have in the NASDAQ rules.
In addition, each member of the Committee shall be a “non-employee” director within the meaning of the rules under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and the applicable Treasury Regulations promulgated thereunder.
III. DUTIES AND RESPONSIBILITIES
The Committee shall:
- Review and approve the factors and criteria, including corporate goals and objectives, applicable to the compensation of the Chief Executive Officer (the “CEO”) and other executive officers.
- Review and evaluate the performance of the CEO and other executive officers and other employees identified by the Committee as key employees of the Company (“Key Employees”) in light of the goals and objectives of the Company, including consideration of the Company’s performance and relative stockholder return.
- Determine and recommend for to the full board the annual compensation packages for the CEO, other executive officers, and Key Employees, including their base salaries, stock options and other stock-based incentives, variable pay amounts and variable pay metrics, based on the Committee’s evaluations and, in accordance with the Company’s incentive compensation plans, including the Company’s stock option plan(s) as in effect from time to time. In evaluating and determining executive compensation, the Committee will consider the results of the most recent stockholder advisory vote on executive compensation. The CEO may not be present during voting or deliberations concerning his or her compensation.
- Review and approve, or make recommendations to the Board regarding, incentive compensation plans and equity-based plans in which executive officers and directors are eligible to participate, as well as any amendments or modifications to such plans.
- Supervise and oversee the administration of the Company’s incentive compensation and equity-based plans, variable pay and stock programs, and approve equity grants under the Company’s stock option and stock incentive plans.
- Review and act upon management proposals to (i) designate Key Employees to incentive compensation programs; and (ii) approve new benefit plans.
- Monitor the effectiveness of benefit plan offerings and approve changes where appropriate.
- Review, and make recommendations to the Board regarding, any employment agreements and any severance arrangements, including any benefits to be provided in connection with a change of control, for the CEO and other executive officers, as well as any amendments or modifications to such agreements or arrangements.
- Review, evaluate and manage the potential risks posed to the Company by its incentive compensation arrangements and compensation program and policies.
- Develop and recommend to the Board the annual retainer fee as well as other compensation for the non-employee directors.
- Prepare and approve the Committee report to be included as part of the Company’s annual proxy statement and Annual Report on Form 10-K.
- Oversee the Company’s submissions to shareholders on executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, and assess the results of the Company’s most recent advisory vote on executive compensation.
- Review and evaluate, at least annually, the performance of the Committee and its members, including a review of the Committee’s compliance with this Charter
- Review and reassess, at least annually, the adequacy of this Charter and recommend changes to the Board.
IV. PROCESS
- The Committee members shall be appointed by the Board upon the nomination of the Nominating and Corporate Governance Committee, and shall serve until such member’s successor is duly elected and qualified, or until such member’s earlier resignation or removal. The Board may remove any Committee member at any time, with or without cause. Unless a Chairperson is appointed by the Board, the members of the Committee may designate a Chairperson by unanimous vote if the Committee is comprised of two members, and by majority vote if comprised of three or more members.
- Committee meetings shall be led by the Chairperson. In the absence of the Chairperson, at any meeting at which a quorum is present, a majority of the Committee members may elect an acting chairperson of the meeting. A majority of the members of the Committee shall constitute a quorum for the transaction of business, unless the Committee is comprised of two members, in which case both members must be present to constitute a quorum for the transaction of business. The Committee may act by a majority of those present at any meeting, by agreement of both members at any meeting if the Committee is comprised of only two members, or by the unanimous written consent of all of members.
- The Committee may, in its sole discretion, select and retain a compensation consultant or other advisor that will assist the Committee in the evaluation of compensation decisions related to the non-employee directors, the CEO, and other executive officers and Key Employees of the Company. The Committee shall have the authority to determine the terms of engagement and compensation of and terminate any such compensation consultant or advisor. The Committee shall evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest.
- The Committee shall have authority to delegate any decisions it is entitled to take under this Charter to a subcommittee of the Committee, provided that a full report of any action is promptly made to the full Committee.
- The Committee shall report regularly to the Board, and all Committee actions and recommendations shall be promptly reported to the Board.
- Minutes of each meeting of the Committee shall be kept and distributed to each member of the Committee, each member of the Board who is not a member of the Committee and the Secretary of the Company. The Chairperson shall report to the Board from time to time or whenever so requested by the Board.
Nominating & Corporate Governance Committee Charter
I. PURPOSE
The Nominating and Corporate Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of 3PEA International, Inc. (the “Company”) shall (1) identify individuals qualified to become members of the Board and recommend director candidates to the Board for election or re-election; and (2) develop, recommend to the Board, and review the Company’s corporate governance policies and practices, taking in consideration the rules of The NASDAQ Stock Market LLC (“NASDAQ”), the Securities and Exchange Commission (“SEC”), as well as other applicable laws, rules and regulations. Corporate governance is a structure within which directors and management can pursue effectively the objectives of the Company for the benefit of all its stakeholders.
II. COMPOSITION AND QUALIFICATIONS
The Committee shall be comprised of two or more members of the Board. At least two members of the Committee shall be “independent” in accordance with NASDAQ rules.
In the event the Committee has more than two members, at least one member of the Committee may be a Board member who is not “independent” under the rules of NASDAQ, provided that such member is not an Executive Officer or employee or a Family Member of an Executive Officer of the Company, and provided the Board determines that such individual’s membership on the Committee is required by the best interests of the Company and its shareholders. In the event the Committee contains a member who is not “independent,” the Company shall disclose either on or through the Company’s website or in the proxy statement for the next annual meeting subsequent to such determination (or, if the Company does not file a proxy, in its Form 10-K), the nature of the relationship and the reasons for the determination. In addition, the Company must provide any disclosure required by Instruction 1 to Item 407(a) of Regulation S-K regarding its reliance on this exception. A member appointed under this exception may not serve longer than two years. The terms “Executive Officer” and “Family Member” shall have the same meaning that they are defined to have in the NASDAQ rules.
III. DUTIES AND RESPONSIBILITIES
The Committee shall:
- Identify, evaluate and recommend to the Board, consistent with criteria approved by the Board, nominees for election as directors at each annual meeting of stockholders of the Company, and as otherwise required, whose experience and expertise will provide added value to the Board’s oversight responsibilities.
- Develop, and recommend to the Board for its approval, criteria to be considered in selecting director nominees, including matters related to professional skills and experience, board composition, and potential conflicts of interest.
- Establish procedures for consideration of candidates for recommendation to the Board, including candidates put forward by stockholders, and consider individuals whose names are submitted by management or by stockholders as candidates for election to the Board.
- Coordinate and oversee meetings and other actions requiring the consideration of the non-employee directors of the Board.
- Develop and recommend to the Board a set of corporate governance principles applicable to the Company, review these principles periodically and recommend any changes to the Board.
- Periodically review and recommend to the Board changes to the Company’s Code of Conduct and Ethics (the “Code”), and monitor overall compliance with the Code.
- Review all potential conflicts of interest under and violations of the Company’s Code of Conduct and Ethics (the “Code”), and consider all waivers of compliance with the Code, and make recommendations to the Board regarding whether to grant a waiver of compliance with the Code.
- Review and make recommendations to the full Board regarding:
- The organization and effectiveness of the Board, including its size, composition, operation, practices, processes and tenure policies;
- The size, composition, membership, qualifications, scope of authority, responsibilities, and charters of each committee of the Board;
- The selection of committee members and chairpersons;
- The Company’s Articles of Incorporation and Bylaws; and
- The Committee’s Charter.
- Annually evaluate the performance of the Committee and its members.
- Annually evaluate the performance of the Board and its members.
IV. PROCESS
- The Committee members shall be appointed by the Board and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. The Board may remove any Committee members at any time, with or without cause. Unless a Chairperson is elected by the Board, the members of the Committee may designate a Chairperson by unanimous vote if the Committee is comprised of two members, and by majority vote if comprised of three or more members.
- Committee meetings shall be led by the Chairperson. In the absence of the Chairperson, at any meeting at which a quorum is present, a majority of the Committee members may elect an acting chairperson of the meeting. A majority of the members of the Committee shall constitute a quorum for the transaction of business, unless the Committee is comprised of two members, in which case both members must be present to constitute a quorum for the transaction of business. The Committee may act by a majority of those present at any meeting, by agreement of both members at any meeting if the Committee is comprised of only two members, or by the unanimous written consent of all of members.
- The Committee shall have the authority to engage independent counsel and other advisers as it determines is necessary to carry out its duties. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the Company’s independent auditors, any other accounting firm engaged to perform services for the Company, any outside counsel and other advisers to the Committee, and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
- The Committee shall have the sole authority to select, retain and terminate any search firm used to identify director candidates and to approve the search firm’s fees and other retention terms.
- The Committee shall report regularly to the full Board, and all Committee actions and recommendations shall be promptly reported to the full Board.
Code of Ethics
1. INTRODUCTION
1.1 Policy
3PEA INTERNATIONAL, INC. and all its subsidiaries (collectively referred to in this document as “3PEA”) are committed to a policy of fair dealing and integrity in the conduct of their business. This commitment, which is actively endorsed by the Board of Directors of 3PEA, is based on a fundamental belief that business should be conducted honestly, fairly and legally. 3PEA expects all employees, directors and other representatives to share its commitment to high moral, ethical and legal standards. 3PEA has established this code as part of its overall policies and procedures. To the extent that other 3PEA policies and procedures conflict with this code, you should follow this code.
1.2 Understanding the Code
This document outlines 3PEA’s Code of Ethics, which applies equally to all employees and other representatives of 3PEA. The term employees has been used in the broadest sense and includes: all staff with whom a service contract exists, management, non-management, directors, contractors, consultants and temporary staff. The code is designed to inform employees of policies in various areas. Please study the code carefully so that you understand 3PEA’s expectations and your obligations.
Compliance with the code by all employees is mandatory. If employees become aware of, or suspect, a contravention of the code, they must promptly and confidentially advise their line manager, the Human Resources Manager or a member of the Audit Committee of the Board of Directors (provided such person was not involved in the alleged violation). 3PEA’s efforts to ensure observance of, and adherence to, the goals and policies outlined in this code mandate that the you must promptly bring to the attention of your line manager, the Human Resources Manager or a member of the Audit Committee of the Board of Directors (provided such person was not involved in the alleged violation) any material transaction, relationship, act, failure to act, occurrence or practice that you believe, in good faith, is inconsistent with, in violation of, or reasonably could be expected to give rise to a violation of, this code.
The matter will be investigated and dealt with according to the 3PEA’s Disciplinary Code of Conduct. Failure to report violations of the code will itself be considered a serious violation of this code. It is 3PEA’s policy that no retaliation or other adverse action will be taken against any employee for good- faith reports of code violations. Persons who discriminate, retaliate or harass may be subject to civil, criminal and administrative penalties, as well as disciplinary action, up to and including termination of employment.
Managers set an example for other employees and are often responsible for directing the actions of others. Every manager and supervisor is expected to take necessary actions to ensure compliance with this code, to provide guidance and assist employees in resolving questions concerning the code and to permit employees to express any concerns regarding compliance with this code. No one has the authority to order another employee to act in a manner that is contrary to this code.
Any waivers of or amendments to this code must be in writing and must be approved in advance by the Nominating and Corporate Governance Committee of the Board of Directors. Waivers and amendments, and the reason therefore, shall be disclosed as required under applicable law and regulations. If employees are in doubt about the application of the code, they should discuss the matter with their line manager or the Human Resources Manager.
The most current version of this code will be distributed to all employees, posted and maintained on 3PEA’s website, and filed as an exhibit to 3PEA’s next Annual Report on Form 10-K. 3PEA’s Annual Report on Form 10-K shall disclose that the code is maintained on the website and shall disclose that substantive amendments and waivers will also be posted on 3PEA’s website.
2. COMPLIANCE WITH LAWS AND REGULATIONS
Employees must comply with all applicable laws and regulations which relate to their activities for and on behalf of 3PEA. 3PEA will not tolerate any violation of the law or unethical business dealing by any employee, including any payment for, or other participation in, an illegal act, such as bribery.
3PEA is committed to full compliance with the laws and regulations of the cities, states and countries in which it operates. You must comply with all applicable laws, rules and regulations in performing your duties for 3PEA. Numerous federal, state and local laws and regulations define and establish obligations with which 3PEA, its employees and agents must comply. Under certain circumstances, local country law may establish requirements that differ from this code.
You are expected to comply with all local country laws in conducting 3PEA’s business. If you violate these laws or regulations in performing your duties for 3PEA, you not only risk individual indictment, prosecution and penalties, as well as civil actions and penalties, but also subject 3PEA to the same risks and penalties. If you violate these laws in performing their duties for 3PEA, you may be subject to immediate disciplinary action, including possible termination of your employment or affiliation with 3PEA.
Employees must ensure that their conduct cannot be interpreted as being in any way in contravention of applicable laws and regulations governing the operations of 3PEA.
2.1 Foreign Corrupt Practices Act
3PEA employees are expressly prohibited from, directly or indirectly, offering payment, promising to pay, or authorizing the payment of any money, or offering any gift or non-monetary offer or benefit, promising to give a gift or non-monetary offer or benefit, or authorizing the giving of anything of value to any foreign official or any foreign political party, official of any foreign political party, or candidate for governmental or political office for purposes of:
- influencing any act or decision of that foreign official, political party or candidate in his/her/its official capacity,
- inducing that foreign official, candidate or political party to do or omit to do any act in violation of the lawful duty of that official, candidate or party, or
- securing any improper advantage; or
- inducing that foreign official, candidate or political party to use his/her/its influence with a foreign government or instrumentality to affect or influence any act or decision of that government or instrumentality, in order to assist 3PEA or its employee in obtaining or retaining business for or with, or directing business to, 3PEA.
Various countries also have laws that prohibit commercial bribery. Accordingly, these laws are not limited in scope to bribery of foreign officials and typically prohibit bribes or inducements to an individual or business to improperly influence decision-making. As such, it is 3PEA’s policy that nothing of value should be provided to any person for the purpose of improperly obtaining or retaining business or otherwise gaining an improper business advantage. Violations of this policy are taken very seriously, as they can subject both 3PEA and the individual to criminal and civil penalties, up to and including imprisonment.
2.2 Copyrighted or Licensed Material
It is both illegal and unethical to engage in practices that violate copyright laws or licensing agreements. 3PEA requires that all employees respect the rights conferred by such laws and agreements and refrain from making unauthorized copies of protected materials, including but not limited to printed matter, musical recordings, and computer software.
2.3 Competitive Relationships
It is unethical and unlawful to collaborate with competitors or their agents or representatives for the purpose of establishing or maintaining rates or prices at any particular level, or to collaborate in any way in the restraint of trade.
3. CONFLICTS OF INTEREST
Employees are expected to perform their duties conscientiously, honestly and in accordance with the best interests of 3PEA to optimize business objectives.
Employees must not use their positions, or knowledge gained through their employment with 3PEA, for private or personal advantage or in such a manner that a conflict or an appearance of conflict arises between 3PEA’s interest and their personal interests. A conflict could arise where an employee’s family, or a business with which the employee or family is associated obtains a gain, advantage or profit by virtue of the employee’s position with 3PEA or knowledge gained through that position.
Every employee must promptly inform 3PEA of any business opportunities that come to the attention of the employee that relate to an existing or prospective business of 3PEA.
If employees feel that a course of action which they have pursued, are pursuing or are contemplating pursuing, may involve them in a conflict of interest situation or a perceived conflict of interest situation, they should immediately make all the facts known to the person to whom they report and the Human Resources Manager.
3.1 Outside Activities, Employment and Directorships
We all share a very real responsibility to contribute to our local communities, and 3PEA encourages employees to participate in religious, charitable, educational and civic activities.Employees should, however, avoid acquiring any business interest or participating in any activity outside 3PEA which would create, or appear to create:
- an excessive demand upon their time, attention and energy which would deprive 3PEA of their best efforts on the job; or
- a conflict of interest – that is, an obligation, interest or distraction which would interfere or appear to interfere with the independent exercise of judgment in 3PEA’s best interest.
Employees other than outside directors may not take up outside employment without the prior written approval of the Human Resources Manager.
Employees who hold, or have been invited to hold, outside directorships should take particular care to ensure compliance with all provisions of this Code. When outside business directorships are being considered by employees, other than outside directors, prior written approval must be obtained from the Chief Executive Officer of 3PEA or the line manager responsible for the division.
3.2 Relationships with Clients, Customers and Suppliers
3PEA recognizes that relationships with clients, customers and suppliers give rise to many potential situations where conflicts of interest, real or perceived, may arise. Employees should ensure that they are independent, and are seen to be independent, from any business organization having a contractual relationship with 3PEA or providing goods or services to 3PEA, if such a relationship might influence or create the impression of influencing their decisions in the performance of their duties on behalf of 3PEA. In such circumstances, employees should not invest in, or acquire a financial interest, directly or indirectly, in such an organization.
3.3 Gifts, Hospitality and Favors
Conflicts of interest can arise where employees are offered gifts, hospitality or other favors which might, or could be perceived to, influence their judgment in relation to business transactions such as the placing of orders and contracts.
An employee should not accept gifts, hospitality or other favors from suppliers of goods or services to 3PEA. However, the acceptance of the following would not be considered contrary to such policy:
- advertising matter of limited commercial value;
- occasional business entertaining such as lunches, cocktail parties or dinners; and
- occasional personal hospitality such as tickets to sporting events or theatres.
Any bribe or attempted bribe must be reported to the employee’s line manager as soon as possible. It is the intention that dealings with any supplier which offers bribes will be terminated.
Certain functions or operating areas may have more detailed rules governing the receipt of gifts, hospitality or other favors. In addition, no bribes of any kind should be made by any 3PEA employee to any customer or potential customer to secure business.
Providing the occasional gifts to customers, as set out below, would not be considered contrary to such a policy:
- advertising matter of limited commercial value;
- occasional business entertaining such as lunches, cocktail parties or dinners; an
- occasional personal hospitality such as tickets to sporting events or theatres.
3.4 Personal Investments
3PEA respects the right of all employees to make personal investment decisions as they see fit, as long as these decisions do not contravene any provisions of this Code, any applicable legislation, or any policies or procedures established by the various operating areas of 3PEA, and provided these decisions are not made on the basis of material non-public information acquired by reason of an employee’s connection with 3PEA. Employees should not permit their personal investment transactions to have priority over transactions for 3PEA and its clients.
When considering the application of this section, employees should ensure that no investment decision made for their own account could reasonably be expected to influence adversely their judgment or decisions in the performance of their duties on behalf of 3PEA.
Employees involved in performing investment activities on behalf of 3PEA and those who by the nature of their duties or positions are exposed to price-sensitive information relating to 3PEA are subject to additional rules governing personal investments. These may be imposed by the Securities Act of 1933, the Securities Exchange Act of 1934, the regulations governing nay national securities exchange on which 3PEA’s securities are listed, and other regulatory bodies, industry associations and management. The rules include requirements for employees to:
- obtain prior written approval for, and to report on, their personal investment activity and the investment activity of those persons with whom they have a close relationship; and
- refrain from dealing in the shares of entities that 3PEA deals with during certain restricted periods, as well as 3PEA subsidiaries and associates.
3.5 Insider Information and Insider Trading
Employees may receive information concerning 3PEA or one of its affiliates, business partners, clients, or customers that is confidential and not generally known by the public. If that information is “material” (i.e., publication of that information is likely to affect the market price of the stock of the entity to which the information relates), then the employee has an ethical and legal obligation not to (a) act on that information (i.e., buy or sell stock based on that information), (b) disclose that information to others, or (c) advise others to buy or sell the stock of the entity to which that information relates, until such information becomes public. An employee’s direct or indirect use of or sharing of such confidential, privileged, or otherwise proprietary business information of 3PEA or its partners, clients, or customers for financial gain, including investment by the employee or the transmission of this information to others so that they can use this information for their financial gain, constitutes insider trading, which is a criminal offense. Please refer to 3PEA’s Insider Trading Policy for more information
3.6 Remuneration
No employee may receive commissions or other remuneration related to the sale of any product or service of 3PEA except as specifically provided under an individual’s terms of employment or as specifically agreed with management. No member of 3PEA’s Audit Committee shall receive any compensation not permitted by the rules of the Securities and Exchange Commission, or the regulations of any national securities exchange on which 3PEA’s securities are listed, and other applicable law.
Employees may not receive any money or anything of value (other than 3PEA’s regular remuneration or other incentives), either directly or indirectly, for negotiating, procuring, recommending or aiding in any transaction made on behalf of 3PEA, nor have any direct or indirect financial interest in such a transaction.
4. EMPLOYMENT EQUITY
3PEA supports employment equity in the work place which seeks to identify, develop and reward each employee who demonstrates the qualities of individual initiative, enterprise, hard work and loyalty in their job. 3PEA is an Equal Employment Opportunity employer and does not discriminate on the basis of age, race, creed, color, national origin, sex, gender identity, sexual orientation, pregnancy, religion, veteran status, citizenship, military service, genetic information, disability, or any characteristic prohibited by law. This policy applies to 3PEA’s employees as well as its contractors, vendors and suppliers.
All employees have the right to work in an environment which is free from any form of discrimination, directly or indirectly, on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, color, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility. An employee should report any cases of actual or suspected discrimination to their line manager or the Human Resources Manager.
Employees with illness or disabilities may continue to work, provided that they are able to continue to perform satisfactorily the essential duties of their jobs and do not present a safety or health hazard to themselves or others.
5. ENVIRONMENTAL RESPONSIBILITY
5.1 Health and Safety
3PEA is committed to taking every reasonable precaution to ensure a safe work environment for all employees.
Employees who become aware of circumstances relating to 3PEA’s operations or activities which pose a real or potential health or safety risk should report the matter to their line manager and the Human Resources Manager. It is 3PEA’s policy that no retaliation or other adverse action will be taken against any employee for good-faith reports.
5.2 Environmental Management
3PEA is committed to developing operating policies to address the environmental impact of its business activities by integrating pollution control, waste management and rehabilitation activities into operating procedures. Employees should give appropriate and timely attention to environmental issues.
6. POLITICAL SUPPORT
3PEA accepts the personal participation of its employees in the political process and respects their right to absolute privacy with regard to personal political activity. 3PEA will not attempt to influence any such activity provided there is no disruption to workplace activities and it does not contribute to industrial unrest.
3PEA funds, goods or services, however, may not be used as contributions to political parties or their candidates, and 3PEA facilities must not be made available to candidates or campaigns, unless specifically authorized.
7. 3PEA’S FUNDS AND PROPERTY
3PEA has developed a number of internal controls to safeguard its assets and imposes strict standards to prevent fraud and dishonesty. It is every employee’s responsibility to implement, maintain and enhance the effectiveness of the control environment in which they operate. All employees who have access to 3PEA’s funds in any form must at all times follow prescribed procedures for recording, handling and protecting such funds. Operating areas may implement policies and procedures relating to the safeguarding of 3PEA property, including computer software.
Employees must at all times ensure that 3PEA’s funds and property are used only for legitimate 3PEA business purposes. Where an employee requires 3PEA funds to be spent, it is the employee’s responsibility to use good judgment on 3PEA’s behalf and to ensure that appropriate value and authorization is received for such expenditure.
All payments made by or on behalf of 3PEA for any purpose must be fully and accurately described in the documents and records supporting the payment. No false, improper, or misleading entries shall be made in the books and records of 3PEA.
Complete and accurate information is to be given in response to inquiries from 3PEA’s Audit Committee and certified public accountants.
If employees become aware of any evidence that 3PEA funds or property may have been or are likely to be used in a fraudulent or improper manner they should immediately and confidentially advise 3PEA as set out in the contravention of the code section of this document. It is 3PEA’s policy that no retaliation or other adverse action will be taken against any employee for good- faith reports.
8. 3PEA’S RECORDS
Accurate and reliable records of many kinds are necessary to meet 3PEA’s legal and financial obligations and to manage the affairs of 3PEA.
3PEA’s books and records should reflect all business transactions in an accurate and timely manner. Undisclosed or unrecorded revenues, expenses, assets or liabilities are not permissible, and the employees responsible for accounting and record-keeping functions are expected to be diligent in enforcing proper practices.
9. EMPLOYMENT MATTERS
9.1 Supervision of Relatives and Others
Close relatives and domestic partners shall not work directly or indirectly under the supervision of one another without prior written approval. “Close relative” means, but is not limited to, a spouse, sister, brother, sister-in-law, brother-in-law, father, mother, father-in-law, mother-in-law, step-parent, aunt, uncle, first cousin, child, step-child, foster child, or grandparent. “Domestic partner” means, but is not limited to, husband, wife, or a person the employee currently resides with in an intimate, romantic or sexual relationship. If such a situation should arise, it should be immediately brought to the attention of a direct manager of Human Resources.
3PEA also requires that employees disclose to Human Resources the existence of an intimate, romantic or sexual relationship between employees where there exists a direct chain of command supervisor/subordinate relationship. Decisions concerning such employees will be made on a case-by-case basis by Human Resources.
9.2 Restrictions on Former Government Employees
Former U.S. Government employees or U.S. military officers are generally prohibited from representing 3PEA in matters in which the government has substantial interest and where the employee had prior responsibility. Retired senior government officials and regular military officers are further restricted from selling to, or in some instances, contacting their former agency or military service. The duration of these prohibitions and the matters to which they apply depend on the type of previous government employment. 3PEA’s legal department should be contacted to help identify which restrictions apply.
10. DEALING WITH OUTSIDE PERSONS AND ORGANIZATIONS
10.1 Prompt Communications
3PEA strives to achieve complete, accurate, fair, understandable and timely communications with all parties with whom it conducts business, as well as government authorities and the public. All employees must take all steps necessary to assist 3PEA in fulfilling its disclosure responsibilities. In addition, prompt and effective internal communication is encouraged.
A prompt, courteous and accurate response should be made to all reasonable requests for information and other client communications. Any complaints should be dealt with in accordance with internal procedures established by various operating areas of 3PEA and applicable laws.
10.2 Media Relations
In addition to everyday communications with outside persons and organizations, 3PEA will, on occasion, be asked to express its views to the media on certain issues.
When communicating publicly on matters that involve 3PEA business, employees must not presume to speak for 3PEA on any matter, unless they are certain that the views they express are those of 3PEA and it is 3PEA’s desire that such views be publicly disseminated. Employees approached by the media should immediately contact the department or individual responsible for corporate communications.
An employee, when dealing with anyone outside 3PEA, including public officials, must take care not to compromise the integrity or damage the reputation of any outside individual, business, or government body, or that of 3PEA.
As a general rule, 3PEA’s position on public policy or industry issues will be dealt with by senior management of 3PEA and existing policies in this regard must be adhered to. The text of the articles for publication, public speeches and addresses about 3PEA and its business should be reviewed in advance with the individual responsible for public relations.
Employees should separate their personal roles from 3PEA’s position when communicating on matters not involving 3PEA business. They should be especially careful to ensure that they are not identified with 3PEA when pursuing personal or political activities, unless this identification has been specifically authorized in advance by 3PEA.
11. PRIVACY AND CONFIDENTIALITY
In the regular course of business, 3PEA accumulates a considerable amount of information. The following principles are to be observed:
11.1 Obtaining and Safeguarding Information
Information necessary for 3PEA’s business should be reliable, accurate and its confidentiality maintained. When personal information is needed, wherever possible, it should be obtained directly from the person concerned. Only reputable and reliable sources should be used to supplement this information.
Information should only be retained as long as it is needed or as required by law, and it is every employee’s responsibility to ensure that such information is physically secured and protected.
11.2 Access to Information
Any information with respect to any product, plan or business transaction of 3PEA, or personal information regarding employees, including their salaries, must be kept strictly confidential (“Confidential Information”) and must not be disclosed or used for improper purposes by any
employee unless and until proper authorization for such disclosure has been obtained. Once authorization has been obtained, all information required by stakeholders either on request or due to statutory requirements must be accurately disclosed. In addition, operating areas may implement policies and procedures to prevent improper transmission within 3PEA of material non-public information.
11.3 Termination of Employment
The obligation to preserve the confidentiality of Confidential Information acquired in the course of employment with 3PEA does not end upon termination of employment. The obligation continues indefinitely until 3PEA authorizes disclosure, or until the Confidential Information legally enters the public domain.
Immediately upon the termination of employment for any reason, or when otherwise requested by 3PEA, employees are required to return to 3PEA all above- mentioned Confidential Information, including documents, information and other property.
11.4 Former Employment
New employees will not be assigned to work where they might be required to use or disclose trade secrets or confidential information belonging to their former employers. New employees should not take away from their former place of employment any information that might be considered proprietary or confidential.
12. OBLIGATIONS OF EMPLOYEES
It is of paramount importance to 3PEA that all disclosure in reports and documents that 3PEA files with, or submits to, the SEC, and in other public communications made by 3PEA is full, fair, accurate, timely and understandable. You must take all steps available to assist 3PEA in fulfilling these responsibilities consistent with your role within the 3PEA. In particular, you are required to provide prompt and accurate answers to all inquiries made to you in connection with the 3PEA’s preparation of its public reports and disclosure.
All employees must perform their duties diligently, effectively and efficiently, and in particular:
- support and assist 3PEA to fulfill its commercial and ethical obligations and objectives as set out in this Code;
- avoid any waste of resources, including time;
- be committed to improve productivity, achieve the maximum quality standards, reduce ineffectiveness, and avoid unreasonable disruption of activities at work;
- commit to honoring their agreed terms and conditions of employment;
- not act in any way that may jeopardize the shareholders rights to a reasonable return on investment;
- act honestly and in good faith at all times and report any harmful activity they observe in the workplace;
- recognize fellow employees’ rights to freedom of association and not intimidate fellow employees;
- pay due regard to environmental, public health and safety conditions in and around the workplace; and
- act within their powers and not carry on the business of 3PEA recklessly.
The Employee acknowledges that 3PEA shall be the owner of the copyright in any work which is eligible for copyright and which is created or executed by the Employee, whether alone or with others, in the course and scope of employment.
All work created or executed by the Employee and for which copyright exists shall unless the Employee established the contrary, be deemed to have been created or executed in the course and scope of employment with 3PEA.