The attitude and actions of the Chief Executive Officer (the "CEO"), President, Chief Financial Officer (the "CFO") and Corporate Controller (collectively as "Executives") of Dejour Energy Inc. (the "Company") are crucial for maintaining the Company’s commitment to (i) honest and ethical conduct, (ii) full, fair, accurate, timely and understandable disclosure in the Company’s public reports and communications, and (iii) compliance with applicable governmental laws, rules and regulations. Accordingly, the Company’s Board of Directors has developed and adopted this Code of Conduct and Ethics (the "Code") applicable to its Executives with the goal of promoting the highest moral, legal and ethical standards and conduct within the Company.
While the Company expects honest and ethical conduct in all aspects of the Company’s business from all employees, the Company expects the highest possible honest and ethical conduct and integrity from the Executives. These Executives must set an example for the Company’s employees and the Company expects these officers to foster a culture of transparency, integrity and honesty. Integrity requires adherence to both the form and the spirit of technical and ethical accounting standards and principles.
Service to the Company should never be subordinated to personal gain and advantage. If any of the Executives becomes aware that he or she is in a situation that presents an actual or apparent conflict of interest (i.e., any situation where that individual’s private interest or personal gain interferes or appears to interfere with the interests of the Company), or is concerned that an actual or apparent conflict of interest might develop, he or she is required to discuss the matter with the Audit Committee for the purpose of developing a means for the ethical handling of that situation.
The Executives, among others, have a supervisory role with respect to the preparation of the Company’s reports and documents filed with or submitted to the various securities commissions in Canada, the United States Securities and Exchange Commission (the "SEC") and the Company’s other public communications and are responsible for taking all steps reasonably necessary to cause the disclosure in these reports, documents and other communications to be full, fair, accurate, timely and understandable. Adequate supervision includes closely reviewing and critically analyzing the financial information to be disclosed, ensuring that proper accounting controls have been applied, that transactions are properly authorized and recorded, and that relevant records have been properly retained. Full, fair and accurate disclosure includes the full reporting of facts, professional judgments and opinions, whether favorable or unfavorable.
Each of the Executives shall promptly bring to the attention of the Audit Committee any information he or she may have concerning (i) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data, or (ii) any fraud, whether or not material, or any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosure or internal controls.
In the performance of their duties, the Executives are prohibited from knowingly misrepresenting facts. The Executives will be considered to have knowingly misrepresented facts if he or she knowingly (i) makes, or permits or directs another to make, materially false or misleading entries in financial statements or records; (ii) fails to correct materially false and misleading financial statements or records; (iii) signs, or permits another to sign, a document containing materially false and misleading information; or (iv) falsely responds, or fails to respond, to specific inquires of the Company’s external auditors.
The Executives are prohibited from directly or indirectly taking any action to interfere with, fraudulently influence, coerce, manipulate or mislead the Company’s independent public auditors in the course of any audit of the Company’s financial statements or accounting books and records.
It is the Company’s policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of the Executives to adhere to the standards and restrictions imposed by those laws, rules and regulations, and in particular, those relating to accounting and auditing matters. Each of the Executives shall promptly bring to the attention of the Audit Committee any information he or she may have concerning evidence of a material violation of securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of a violation of the Company’s Code.
The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of this Code by the Executives with the goal of deterring wrongdoing and promoting accountability for adherence to this Code. Actions may include written notice, censure, demotion or re-assignment, suspension with or without pay or benefits and termination of employment.
Violations of this Code may also constitute violations of law and may result in civil and criminal penalties for the violator, the violator’s supervisors and the Company.
Securities Regulators in Canada have established rules requiring the audit committees of public companies to develop confidential, anonymous submission procedures for receiving complaints from employees and consultants regarding any fraud, wrong doing or violation, including those related to accounting, internal accounting controls or auditing matters. To meet these requirements, the Corporation’s Audit Committee of the Board of Directors has developed this Whistleblower Policy.
No director, officer, consultant or employee who in good faith files a complaint, submits a concern or reports any fraud, wrong doing or a violation or suspected violation shall suffer harassment, retaliation or adverse employment consequence. This Whistleblower Policy is intended to encourage and enable employees and others to raise serious concerns within the Corporation rather than seeking resolution outside the Corporation.
Anyone filing a complaint, submitting a concern or reporting wrong doing or a violation or suspected violation must be acting in good faith and have reasonable grounds for believing the information disclosed. Any allegations that prove not to be substantiated and which prove to have been made maliciously or knowingly to be false will be viewed as a serious disciplinary offense.
Anyone with a complaint or concern about the Corporation may contact their supervisor or manager responsible for the group which provides the relevant service, recognizing however, that this depends on the seriousness and sensitivity of the issues involved and who is suspected of wrong doing.
You may also contact Mathew Wong, CFO at 604-638-5058.
If you feel this matter is serious, as an alternative, complaints or reports under this Whistleblower Policy may be submitted on a confidential, anonymous basis to the Chair of Audit Committee at:
Mr. Craig Sturrock
Twenty-Seventh Floor, Three Bentall Centre
595 Burrard Street
Vancouver, British Columbia, V7X 1J2
The Audit Committee of the Board of Directors shall address all reports submitted to it of complaints or concerns, including those regarding wrong doing, corporate accounting practices, internal accounting controls or auditing matters. All reports submitted to the Audit Committee of the Board of Directors will be promptly investigated and appropriate corrective action will be taken if warranted by the investigation.
As a Canadian corporation listed on the NYSE MKT, DXI is not required to comply with most of the NYSE MKT corporate governance standards, so long as it complies with Canadian and TSX corporate governance requirements. In order to claim such an exemption, however, DXI must disclose the significant difference between its corporate governance practices and those required to be followed by U.S. domestic companies under the NYSE MKT corporate governance standards.
DXI’s corporate governance practices meet or exceed all applicable Canadian requirements. They also incorporate some best practices derived from the NYSE MKT rules, and comply with applicable United States securities laws and rules adopted by the United States Securities and Exchange Commission (the “SEC”). Further information about DXI’s corporate governance practices is included in DXI’s Information Circulars prepared in respect of its annual meetings of shareholders.
The following is a summary of the significant ways in which DXI’s corporate governance practices differ from those required to be followed by U.S. domestic issuers under NYSE MKT’s corporate governance standards. Except as described in this summary, DXI is in compliance with the NYSE MKT corporate governance standards in all significant respects.
The rules of the NYSE MKT require a quorum of at least 33-1/3% of the shares issued and outstanding and entitled to vote for a meeting of a listed company's shareholders. The TSX does not specify a quorum requirement for a meeting of a listed company's shareholders. DXI’s current required quorum at any meeting of shareholders (unless a greater number of persons are required to be present or a greater number of shares are required to be represented by the Business Corporations Act (British Columbia) (the “BCBCA”) or any special rights attached to any class or series of shares issued by DXI), as set forth in DXI’s Articles, is one or more shareholders present in person or represented by proxy. DXI’s current quorum requirement is not prohibited by, and does not constitute a breach of, the BCBCA, applicable Canadian securities laws or the rules and policies of the TSX.
Subject to certain exceptions, the rules of the NYSE MKT require shareholder approval of all equity compensation plans and material amendments to such plans. The circumstances in which the NYSE MKT rules require shareholder approval with respect to equity compensation plans are broader than under the rules of the TSX. For example, the NYSE MKT rules require shareholder approval for any compensation arrangement in which an officer, director, employee or consultant may receive options or stock (including stock purchased in the open market for re-distribution), while the TSX rules provide that only the creation of or certain material amendments to equity compensation plans that provide for new issuances of securities are subject to shareholder approval. DXI follows the TSX rules with respect to the requirements for shareholder approval of equity compensation plans and material amendments to such plans.
The rules of the NYSE MKT require a listed company to obtain shareholder approval for certain types of securities issuances, including private placements that may result in the issuance of common shares (or securities convertible into common shares) equal to 20% or more of presently outstanding shares, for a price that is less than the greater of the book or market value of the common shares. Under TSX rules, shareholder approval is required only for issuances of securities in excess of 25% of the issued and outstanding shares. In the event that the NYSE MKT's shareholder approval requirements are triggered by an issuance of DXI’s securities, DXI will, if permitted by the TSX, seek an exemption from the NYSE MKT shareholder approval requirements on the basis that it should be allowed to rely on the TSX shareholder approval rules.
The rules of the NYSE MKT require the solicitation of proxies and delivery of proxy statements for all shareholder meetings of a listed company, and that proxies be solicited pursuant to a proxy statement that conforms to the proxy rules of the SEC. As a "foreign private issuer" as defined under the United States Securities Exchange Act of 1934, as amended, DXI is exempt from the proxy rules of the SEC, and instead DXI solicits proxies in accordance with the BCBCA, applicable Canadian securities laws and the rules and policies of the TSX, which are consistent in material respects with the SEC’s proxy rules..