Code of Business Conduct and Ethics

For purposes of this Code of Business Conduct and Ethics (the "Code"), the company NIC Inc. ("NIC" or the "Company") refers to NIC Inc. and its subsidiaries. This Code applies to all directors, executive officers and other employees of NIC.

Introduction

NIC Inc. (“NIC”), and its related affiliates and subsidiaries (collectively for purposes of this policy, the “Company”) has high expectations with respect to the conduct of its employees, directors and officers. In addition to all other Company rules, policies and procedures, each such individual should conduct him or herself in accordance with this Code of Business Conduct and Ethics (the “Policy”). A code of conduct cannot cover all situations or anticipate all possible circumstances. Employees, directors and officers confronting situations not specifically addressed by this Policy should be guided by the overall philosophy to “do the right thing.” Consultants performing work for NIC should also follow the Company’s Code of Business Conduct and Ethics.

“Integrity is at the core of everything we do and is ingrained in our culture. It is up to every employee, officer and director of NIC to help maintain its integrity at all times.” Harry Herington, Chairman and CEO

This policy refers to a number of other Company policies. Those policies, plus all other Company policies and guidelines that apply to employees, may be found on the Company’s intranet, www.intranet.nicusa.com.

Specific Guidance on Employee, Director and Officer Conduct

Illegal Harassment

Illegal harassment of another employee, vendor, customer or any other individual is not tolerated by the Company. Employees, officers and directors must refrain from discrimination on a prohibited basis in the areas of recruitment, hiring, termination, promotion, salary treatment or any other condition of employment or career development, and are prohibited from harassing employees or individuals with whom the Company does business. A “prohibited basis” means on the basis of race, color, religion, national origin, sex, age, “handicap,” sexual preference or orientation, marital status, or status as a special disabled veteran or veteran of the Vietnam Era. In addition, you are prohibited from engaging in any inappropriate activity that has the purpose or effect of (i) creating an intimidating, hostile or offensive work environment; (ii) unreasonably interfering with an individual’s work performance; or (iii) affecting an individual’s employment opportunity. You are directed to the Company’s Anti-Harassment Policy for additional details and obligations.

Personal Conduct

Employees, directors and officers should always act with integrity and honesty. You should conduct yourself at all times with the understanding that your actions, good and bad, reflect on the Company. You should comply with all applicable federal, state and local laws, rules and regulations. Even then, as a representative of the Company, you should strive to go beyond the requirements of the law and exhibit a high moral character. In accordance with the foregoing, you should comply with the following non-exhaustive list of actions:

• Comply with all of the Company’s policies, rules and procedures, regardless of whether they are expressly mentioned in this Policy.
• Be mindful of the Company’s attendance policy. If you must be absent, keep your supervisor informed.
• Give your best effort during working hours, including in your dealings with customers, vendors and other employees. Please keep personal business to a minimum while on Company time.
• We are committed to a violence-free work environment, and we will not tolerate any level of violence or the threat of violence in the workplace. Do not bring firearms, weapons or explosives into the Company’s premises. The same rules apply to a Company function, unless special rules appropriate to a specific function have been approved in advance by the executive team or a member thereof.
• Do not engage in dishonest behavior with respect to the Company, its customers, vendors, suppliers and partners. As further detailed in this and other Company policies, you must not take Company property for personal use, use Company property for personal gain or share Company confidential information with unauthorized third parties.
• Treat other employees, directors, officers, vendors, customers, suppliers and partners respect.
• Strive to convey a sense of ethics, integrity and accuracy while representing the Company.

A company’s reputation for honesty, integrity and fairness is difficult to build, but easy to damage or destroy. A single instance of dishonesty or unethical conduct by a Company representative may irreparably harm a company’s reputation and undermine its culture of ethical decision-making.

Alcohol and Drug Use

The misuse of legally prescribed or over-the-counter drugs, or the use, possession, distribution or sale of illicit or unprescribed controlled drugs on the Company’s premises or while on Company business is strictly prohibited and is grounds for discipline up to and including termination, even for a first time offense.

Possession or use of alcohol while on the Company’s premises or while on Company business is likewise prohibited and equally as punishable, unless you have received prior approval from the Executive Management Team. Social drinking while entertaining clients, attending Company social functions or for other legitimate reasons authorized by the Executive Management Team is permissible, provided that your drinking is reasonable and does not reflect poorly on the Company. You are directed to the Company’s Substance Abuse Policy for additional guidance on the topic.

Conflicts of Interest(PErsonal Financial Interests; Corporate Opportunities; Outside Activities)

All employees, directors and officers must avoid conflicts of interest by appearing to be, and remaining, unmotivated by personal interests in their business dealings. A conflict of interest can arise when an employee, director or officer takes actions or has personal interests that may interfere with his or her objective and effective performance of work for the Company. You should never use Company property, information or data, or the Company’s business relationships, for personal gain. “Personal gain” includes benefit or gain that is realized by you, your family, friends or business partners or that otherwise, directly or indirectly, benefits any of the foregoing individuals. If you learn of a business or investment opportunity through the use of Company property or information, or through your position with the Company, you may not participate in the opportunity or make the investment without prior written approval of the General Counsel. In addition, employees, directors and officers are expected to refrain from competing with the Company because of your signed agreement with the Company and because this policy prohibits it.

In addition, you should avoid outside employment or activities that materially decrease your performance, impartiality, judgment, effectiveness or productivity that is required in the performance of your business duties. Stated another way, you must avoid situations where your private interests and obligations conflict or interfere with your duty to be loyal and provide competent and quality work to the Company.

A business relationship (other than legitimate employment) on behalf of the Company with a close relative, a spouse or significant other ("Close Relationship") can give rise to a potential conflict of interest. You should not participate in such business relationships without clearing such situations with the head of your business unit or the Company’s General Counsel in advance. This includes supervising or having business dealings on behalf of the Company with a person with whom you have a Close Relationship.

Accepting gifts or entertainment from a Company customer, supplier, partner or competitor can easily create the appearance of a conflict of interest, especially if the value of the gift or entertainment is significant. As a result, you should not accept significant gifts, entertainment or any other business courtesy from any of our customers, suppliers, partners or competitors without notifying the head of your business unit or the Company’s General Counsel in advance and clearing it with him/her. Acceptance of inexpensive "token" non-cash gifts, infrequent and moderate business meals and entertainment and infrequent invitations to local sporting events and celebratory meals can be appropriate aspects of many Company business relationships, provided that they are not excessive and do not create the appearance of impropriety. Gifts from customers, suppliers, partners or competitors of cash or cash equivalents (e.g., gift certificates or prepaid gift cards) should not be accepted without getting the approval of your business unit manager or the Company’s General Counsel in advance. If the gift is proffered without warning, then do not accept the gift until you have talked with the head of your business unit or the Company’s General Counsel.

You should immediately notify your supervisor in writing in the event you have an actual or perceived conflict of interest with respect to your dealings on behalf of the Company. This includes any supervisory or business relationship with a person with whom you have a Close Relationship. In addition, not all conflicts of interest are readily apparent from the onset, so if you have any questions, or suspect that you may have a conflict, you should contact the Director of Human Resources or the General Counsel to discuss the same.

Because members of the Board of Directors of the Company, as well as the Company’s named executive officers, have heightened responsibilities and obligations to the Company, they are required to disclose to their fellow directors and officers any personal interests they may have in any Company transactions or relationships.

Fair Dealings

The Company is proud of its employees and all they have accomplished. The Company strives to consistently prove to its partners and competitors that its services and products are second to none. The Company continues to expand its business based in large part on these superior services and products. There is no value to the Company in gaining competitive advantages through unethical or illegal business practices, and the Company expressly forbids such actions. Stealing proprietary information, failing to obtain proper software or IP licenses or exceeding those licenses, using trade secret information that was obtained without the owner’s consent or inducing disclosures of such by past or present employees or contractors of other companies is strictly prohibited.

In addition, you should consult with your business unit head or the General Counsel before spending money on gifts, entertainment, meals or travel for any of our government customers. The Federal Government and most states prohibit their employees from accepting anything like that. In no case may our spending on gifts, entertainment, meals or travel for any customer be lavish or intended to create a sense of obligation to do business with us. It is also paramount that you respect the rights of, and deal fairly with, the Company’s partners, customers, suppliers, competitors and other employees.

Privacy and Communications

The Company takes its obligations to preserve the privacy of communications and information very seriously. The sharing of certain information or data with the wrong person could have serious consequences, legally, ethically or economically. Violating any of the following basic rules for privacy could tarnish the Company’s reputation and lead to legal consequences. The basic rules are:

• Do not tamper with or intrude upon any transmission, whether by voice, non-voice or data.
• Do not listen or repeat anyone else’s conversation or communication, or permit them to be monitored or recorded except as required in the proper management of the business.
• Do not permit an unauthorized person to have access to any communication transmitted over Company facilities.
• Do not allow or permit installation of any device that will enable someone to listen to, observe or realize that a communication has occurred, except as authorized by an official service or installation order issued in accordance with Company practices.
• Do not use information from any communication, or even the mere fact that a communication has occurred, for your personal benefit or for the benefit of others than the Company.

You should protect the personal information of current and former employees, members of the Board of Directors, customers, job applicants, online users, business partners and suppliers. You should obtain and use personal information solely for legitimate business purposes and only if you have a legitimate need to know. Remember also the terms of the non-disclosure agreement you signed upon joining the Company. Our partner and alliance contracts also have confidentiality clauses, and government laws and regulations restrict communication of personal and health information.

If you believe the privacy of any communication has been compromised, or if you are asked to reveal any private information to any unauthorized third party or any outside third party (including a governmental entity), contact the head of your business unit or the General Counsel immediately.

Proprietary Information

As may be additionally set out in other Company policies and in the agreements each officer, director and employee signs, each employee, director and officer of the Company is charged with protecting the Company’s intellectual property and proprietary or confidential information (“Company Information”). The Company has successfully operated using a unique business model for many years. Details related to this model, and other Company Information, must be protected from unauthorized third parties if the Company is to remain at the forefront of e-government services.

Proprietary information is any oral or written (including electronic) information or knowledge disclosed to an employee, officer, director or other individual by the Company, or known to such employee, officer, director or individual as a consequence of, in connection with, or through such person’s performance of work or services for the Company, including that which relates to Company’s business, products, processes, or services. Proprietary information includes, but is not limited to, information relating to research, development, inventions, computer program designs, programming techniques, flow charts, source code, object code, products or services under development, manufacturing, purchasing, accounting, engineering, marketing, selling, customer lists, customer requirements, security, the specifics regarding Company’s business opportunities, including unannounced portal contracts or opportunities, oral or written (including electronic) communications from, to, or regarding, any employee, director, officer or agent, and any expense reports for any of the foregoing, any other internal financial and billing records, internal organizational documents, personnel files and employee/director/officer/agent related paperwork, and any and all documentation thereof or otherwise related to the foregoing. It will be presumed that information and documentation supplied or made available by or on behalf of the Company to the employee, officer, director or other individual is Proprietary information and Company Information unless and until it is expressly designated otherwise in writing by Company.

As used above, “inventions” means discoveries, concepts, and ideas, whether patentable or not, including, but not limited to, apparatus, processes, methods, compositions of matter, techniques, and formulae, as well as improvements thereof or know-how related thereto, relating to any activities of Company.

You must ensure that Company Information under your direction/control is properly identified and safeguarded according to the nature of the information, and in accordance with Company policies and procedures and the agreements the Company or its subsidiaries signs with other entities. It is the Company’s policy that access to proprietary information is limited to authorized persons with a “need to know.” Disclosures to any other individual should only be made when there is a valid business need and, in such case, only as specified in the Company’s policies and agreements. Company Information may never be used for personal benefit or non-Company purposes. When employees leave the Company, all documents, files and other items containing Company Information must be returned to the Company. Even following the end of an employee’s involvement with the Company, the employee is obligated, by written agreement and, in some instances, applicable law, to safeguard such information.

You should protect the data of the Company's customers (including all individuals and businesses using our portals) just as you would protect Company Information. Do not accept the confidential information of any competitor. If you inadvertently come into the possession of a competitor's confidential information, contact the General Counsel immediately.

Negotiations

One area where it is especially important to safeguard Company information is during any contractual negotiations or other negotiations on behalf of the Company. It is well established, for example, that it is not a breach of the honesty and transparency otherwise expected of employees, officers, and directors under this Code when you do not reveal how far the Company is willing to compromise a particular point, or when you do not divulge all the Company may be willing to do to reach agreement, while offering some concessions or making some gestures of accommodation during negotiations. Such tactics are both necessary to the overall success of the Company, and well accepted within the business community. Denying that a position was taken or denying the contents of an offer already made, however, after the position was taken or the offer was made, would, however, be the type of conduct during negotiations that would breach this Code. To most effectively negotiate on behalf of the Company, as well as to minimize the likelihood of breaching the Company’s confidentiality, any negotiation should be conducted through a single negotiator, regardless of the size of the Company team conferring with that negotiator internally.

Any questions on whether an item constitutes Company Information, or any suspected compromise of Company Information, should be communicated to the head of your business unit or the General Counsel.

Computer and Other Systems

You are responsible for ensuring that the computer you use and other similar systems, including cell phones and iPads, and the information they contain, to the extent under your control or direction, are adequately safeguarded against damage, alteration, theft, fraudulent manipulation and unauthorized access or disclosure. It is particularly important that data processed and stored in a computer is protected as a Company asset, with proper safeguarding in place in accordance with the proprietary and/or critical nature of the data. This includes cooperating with the Company’s Security division. Ultimately, each employee is responsible for the security of information accessed or modified under his or her password or access procedure. The obligations contained in this section are in addition to the obligations contained in the Company’s Acceptable Use of Technology Policy, which you are expected to read and comply with. Violations or suspected violations of computer security controls should be reported to your General Manager, the Chief Security Officer or the General Counsel.

Information Regarding Security Incidents and Breaches

Another area where it is vital to the Company to safeguard information is in the case of a security incident or breach. In these cases, the Company works with law enforcement, and also with our government partner, to investigate any activities uncovered and mitigate their effects. There is typically an appropriate time for public disclosure (or discussion with our government partner), but until then, all information regarding security matters should be closely safeguarded and not disclosed. When the appropriate time for public disclosure/partner discussion arrives, it is critical that such communications on behalf of the Company be handled by professionals. As a result, all communications activities will be coordinated by designated members of the executive team in cooperation with designated members of the Security team. After such disclosure, it remains critical that information and communications be carefully and responsibly controlled, through the same channels as those that spoke publicly on behalf of the Company.

Espionage and Sabotage

It is extremely important that employees, officers and directors protect information that, in the hands of saboteurs or espionage agents, whether commercial or governmental, could prove devastating. This is not only a requirement of this policy, but also of the agreements you signed upon joining NIC. Examples of such Company information include proprietary information, security procedures, marketing plans and strategies, product development information, emergency rerouting, disaster recovery, service restoration procedures and governmental partner data and classified government National Security information. Access to classified United States Government National Security Information is restricted to those having a proper government clearance and a “need to know.”

Any attempt by an unauthorized person to obtain proprietary or classified information should be immediately reported to your General Manager and the General Counsel. Be especially vigilant for social engineering techniques.

Physical Security

Always secure your laptop, important equipment and your personal belongings, even while on the Company’s or a Partner’s premises. Do not tamper with or disable security and safety devices. Watch people who "tailgate" behind you walking through our doors. Promptly report any suspicious activity or problems with our physical security (such as a door or desk that will not lock) to your manager.

Company Records and Reports; Record Retention

Company records include reports, vouchers, bills, time reports, payroll and service records, receipts and other essential data. Proper handling and preparation of Company records is important and has broad implications. Employees who prepare records must:

• Provide accurate and complete information in making all entries, including those for records or reports for governmental agencies (including the U.S. Securities and Exchange Commission (“SEC”)) and those related to accounting classifications, benefits received under benefit plans and executive perquisites.
• Correctly report items used under any measurement or index plan. A false or misleading report of measurement data is considered to be just as serious as falsifying vouchers, financial data, or records pertaining to Company funds or property.
• Account accurately for all time worked, work items, expenses, materials, tools, vehicles and other Company property.
• Immediately report any irregularity, discrepancy or suspected false reporting to your General Manager or General Counsel.

Company records should be treated as Company Information (i.e., confidential), and kept in accordance with the confidentiality provisions contained in this Policy. The records should only be disclosed upon proper authorization or as directed in the Company’s privacy rules or pursuant to legal process. Such records are protected from disclosure by law, and can only be released to governmental agencies pursuant to legal process at the direction of NIC Corporate Security and the NIC Legal Department.

Certain of the Company’s records are required to be maintained in accordance with the rules of the SEC, Federal Communications Commission (“FCC”) or other governmental agencies including state or local governmental agencies. In addition, records related to any actual or impending court or regulatory proceedings must not be destroyed unless and until (i) allowed under the regulatory or statutory rules and (ii) authorized by the NIC Legal Department. For example, once you receive a “litigation hold notice” from the General Counsel, you are prohibited from destroying the information or records that pertain to the matters described in the notice until otherwise authorized by the General Counsel. Please contact the NIC Legal Department if you are uncertain as to whether certain records may be destroyed.

Finally, and subject to the above requirements regarding governmental restrictions and requirements, and any potential litigation hold, you are required to keep your records in accordance with any document retention policy implemented by the Company.

Company Assets

All employees, directors and officers should do their best to prevent the loss, damage, misuse or theft of Company assets. This obligation exists with respect to both tangible and intangible items. Some of the precautions you are expected to take include the following:

• Locking desks and other containers that house important Company property or data.
• Restricting non-authorized persons’ access to the Company’s premises unless they are on official business, and making sure they are identified as visitors while visiting Company facilities.
• Reporting expenditures in a timely manner and in accordance with Company policy, as further detailed below.
• Disposing of Company property only when and in the manner authorized (including property considered to be obsolete, surplus or invaluable).

You are prohibited from using Company assets for personal benefit. This does not include mere incidental usage that does not interfere with Company business. Prior authorization is required before you may borrow, use, take, sell, loan or give away Company assets, except to the extent that the same occurs in the usual course of business. Any conveyance of Company assets must be done in accordance with the Company’s Asset Disposition Procedures Policy. Any suspected or actual loss, misuse, theft or destruction of Company property should be promptly reported to your General Manager or the Company’s General Counsel.

An employee’s personal property should not be used for Company business unless otherwise authorized by Company instruction. You acknowledge that the Company is not liable for, and assumes no responsibility in connection with, the personal property an employee uses in the course of their employment.

Company Funds; Loans

As used in this section, Company funds or Company money includes, among other things, checks, cash, drafts, customer payments, airplane tickets, company credit cards and other items that represent, or can be used to make, a purchase on behalf of the Company.

When spending Company funds or spending your own funds with the intent to be reimbursed by the Company, please be careful that the Company receives fair value for the expenditure and that the expenditure is for a legitimate business purpose. Anyone approving or certifying any voucher or bill for payment or reimbursement by the Company must have reasonable knowledge that the expenditures are proper.

Employees having control over Company funds are personally accountable for them. You are required to use reasonable efforts to keep Company funds safe and to protect them from theft, loss or misuse. Your obligations include keeping an accurate record of funds spent, using Company funds only for Company expenses and conducting a detailed review of your charges on at least a monthly basis. At the end of your employment with the Company, you must return all Company credit cards. Further detail is provided in other Company policies and instructions, including, without limitation, the Company’s Reimbursable Expenses Policy, and the Corporate Credit Card Policy.

You should read and familiarize yourself with those items.

No director or officer shall receive a loan or extension of credit in the form of a personal loan from the Company. Employees will not receive loans or payroll advances without the prior approval of the employee’s supervisor, as well as the Executive Management Team.

The foregoing does not prohibit good-faith advances of corporate expenses, such as travel expenses. Such advances shall be properly accounted for or repaid within thirty (30) days of the advancement. The foregoing additionally does not prohibit the cashless exercise of stock options in accordance with procedures approved by the Company’s Board of Directors.

Insider Trading

You are required to carefully read and comply with the NIC Inc. Trading Policies and Disclosure of Non-Public Information document, which is a separate policy and is not included in this document. The NIC Inc. Trading Policies and Disclosure of Non-Public Information is driven by, among other things, legal requirements, and violation of that policy may subject you to criminal prosecution, civil liability and/or termination.

Competition Laws

The United States has laws designed to encourage and protect free and fair competition. Generally speaking, these laws prohibit 1) arrangements with competitors that restrain trade in some way and 2) use of market power to engage in unfair price discrimination and other forms of unfair practices.

Although the intent of these antitrust laws is straightforward, their application to particular situations can be quite complex. Some real life things to be cautious about include:

• sharing of competitively sensitive information (e.g., prices, costs, market distribution, etc.) with competitors at trade and industry conferences; and
• making statements (in emails, IMs, presentations, memos or anyplace else) that wrongly suggest that NIC’s competitors are incompetent or unethical or that we seek to harm our competitors or improperly exploit our success.

Please contact the General Counsel whenever you have any antitrust law questions or concerns.

Code of Ethics for CEO and Senior Financial Officers

In addition to the other obligations contained in this, and in other Company policies, the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and such other financial officers as the Company’s Chief Financial Officer may designate (collectively, “financial professionals”) are subject to the following rules. Financial professionals shall:

• Uphold, as applicable, all standards and ethical rules of institutions that professionally certify their achievements, including the AICPA, NAA, IMA, IIA and any others that may apply, now or in the future.
• Act with honesty and integrity, with due care, competence and diligence and disclose conflicts of interests (actual, potential or perceived). The disclosures should be promptly made to the Company’s Audit Committee.
• Do his or her part to ensure full, fair, accurate, timely and understandable disclosure in reports and documents submitted to governmental entities, including, without limitation, the SEC.
• As CEO and Senior Financial Officers, accept personal accountability for adherence to this Code of Ethics (the “Code”), and report any violations of the same to the Audit Committee of the NIC Board of Directors.
• As applicable, carefully review drafts of reports and documents the Company is required to file with the SEC before they are filed and Company press releases or other public communications before they are released to the public, with particular focus on disclosures each such officer does not understand or agree with and on information known to the senior officer that is not reflected in the report, document, press release or public communication.
• Meet with the Disclosure Committee, other members of senior management, accounting staff and others involved in the disclosure process to discuss their comments on the draft report, document, press release or public communication.
• Establish and maintain disclosure controls and procedures which provide that material information is included in each report, document, press release or public communication in a timely fashion.
• Consult with the Audit Committee on a regular basis to determine whether they have identified any weaknesses or concerns with respect to internal control over financial reporting.
• When relevant, confirm that the Company’s independent auditors are aware of any material misstatements or omissions in the draft report or document, or whether they have any concerns about the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of a report or document.
• Bring to the attention of the Audit Committee matters that they feel could compromise the integrity of the Company’s financial reports, disagreements on accounting matters and violations of any part of this Code.

Violations of this Code will result in prompt disciplinary action up to and including immediate discharge from employment, even for a first occurrence. The Code is referenced annually in NIC’s Annual Report to Stockholders with a link to it on the Company’s website.

Political Activities

The Company respects the rights of its employees, directors and officers to engage in political activities. Employees, directors and officers engaging in political activities are, however, expected to do so as private citizens and not as representatives of the Company, except to the extent expressly authorized by the Company. If you choose to engage in political activities that may create an actual or perceived conflict of interest, such as running for or serving in a political office, you are directed to inform the Company of the same so that any conflict of interest can be appropriately identified and addressed.

Reporting Misconduct

If you become aware or suspect that the Company or any employee, officer or director of the Company is violating any law, this Policy, or any other Company policy, you have a duty to report your suspicion or violation. If you suspect a violation of this or any other Company policy, you are directed to report it to your supervisor, or, if you are uncomfortable doing so, then in accordance with the NIC Reporting Hotline Policy, which is found on the Company’s Intranet. All reports will be dealt with confidentially.

Neither the Company nor any of its employees may take retaliatory action against an employee for making a good faith report or for cooperating in an internal investigation. In addition, Company policy prevents retaliation against any employee for disclosing information in good faith to a government or law enforcement agency. As used here, “good faith” is a reasonable belief in the truth and accuracy of the information given. Providing knowingly false information is not a protected action and may be subject to disciplinary action.

Other Company Policies

The obligations contained in this Policy are in addition to the obligations contained in all other Company policies, procedures and guidelines. To the extent a particular topic in this Policy is implicated in other policies, you are directed to such policies and are expected to comply with the same as if they were fully set out in this Policy.

Disclaimer

This Code of Business Conduct and Ethics does not constitute a contract of employment and employees will continue to be employed at the will of the employer.

FAQs

1. Question: An employee overhears her supervisor state that she elected to not promote an employee because he “just didn’t fit in” with the other department members. The employee has heard her supervisor comment several times on the employee’s religion, and how she thinks it’s “just weird.” Since the un-promoted employee is widely regarded as a valuable and competent employee, the employee suspects that her supervisor’s belief that the employee does not fit in is based upon the employee’s religion. Is this a violation of Company policy?

   Answer: Yes. An employee may never be discriminated against or denied employment opportunities based on the employee’s religious beliefs. If the employee has good faith belief that the reason for the lack of promotion is the employee’s religion, then this matter should be brought to the attention of the director of Human Resources or otherwise reported according to Company policy.

2. Question: An employee overhears a fellow employee telling a government partner that he could get the partner a copy of a licensed product without having to pay a license fee. The employee states that it would be a copy of the product that was licensed for the Company’s use, but that “nobody had to know.” The employee knows that this employee is trying to be a good partner, since the government partner is not able to pay for such an expensive license, but she is concerned about the situation. What should she do?

   Answer: In this instance, not only would the other employee’s conduct show the partner that the employee (and by implication, perhaps the Company) is willing to engage in unethical conduct, but if it actually occurs, the employee will be opening the Company up to significant liability from the product licensor, as well as damaging the Company’s reputation. While employees should strive to assist their partners when they are able, it should never cross the line into unethical or illegal conduct, or conduct that will cause the Company to violate licensing or other agreements. The employee may talk with the other employee to dissuade him from providing the unauthorized copy of the product, but the employee must also report this to her supervisor or another person in accordance with Company policy.

3. Question: An employee attends a dinner with several other Company employees, the purpose of which is to entertaining prospective business partners. A fellow employee has quite a bit to drink, and the group has to call a cab to take this employee home. The prospective partners did not seem to mind and it did not seem to impact business discussions. Was this a violation of Company policy?

   Answer: Yes. Regardless of whether an employee believes that it impacted business discussions at that time, the circumstances of the dinner will impact how the Company, and its employees, are viewed. In addition, the business partner will unquestionably recall the employee’s behavior when deciding whether to do business with the Company. The employee should have limited his or her drinking to socially acceptable drinking only.

4. Question: An employee’s sister-in-law is the CEO of a company that the employee thinks would be a great candidate to partner with the Company on a project that would take place two or three years down the road. Given that any actual project is several years away, and that the only interaction the Company would have with the other company for some time would be high level discussions of the potential project, does the employee need to disclose his relationship to the CEO now?

   Answer: Yes. All individuals covered by this policy should disclose a conflict of interest, actual or potential, as soon as they become aware of it, as described in the Privacy and Communications section of this policy.

5. Question: An employee attends a vendor’s conference and was entered into a drawing for a $500 gift certificate for a specific vendor’s products. The Company is interested in using the vendor’s services. The employee wins the drawing and is offered the $500 gift certificate. Does the employee need to disclose this to her supervisor?

   Answer: Yes. The amount of the gift certificate, as well as the fact that it is from (and for) a vendor that the Company is interested in using, creates a situation for a potential conflict of interest. The employee should inform her supervisor before accepting the gift certificate.

6. Question: An employee of the Company previously worked for a company that, while not a direct competitor, provides similar technology services. The employee mentions to another employee that something he learned at his previous job would help fix a problem the Company is having with a particular software product. Can the information that the employee learned be used to fix the problem?

   Answer: It depends. If what the employee learned is common-place and not special, unique or proprietary to the previous employer (or another third party) then the solution might possibly be used. If, however, the employee’s solution involves, for example, proprietary code or a proprietary method of the previous employer, then the solution may not be used. Because the distinction between a non-proprietary solution and a proprietary solution may not always be clear (and because the employee might otherwise be violating an agreement with the previous employer by using the solution), you should always discuss the matter first with your supervisor and the Company’s General Counsel.

7. Question: An employee has a habit of listening in to his supervisor’s personal telephone conversations. The employee listens only to satisfy his own curiosity, and beyond discussing items he finds particularly interesting with a few other employees, does not use the information for any financial or other reason. Is this a violation of Company policy?

   Answer: Yes. The employee is violating Company policy, and in addition, may be opening himself up to legal liability.

8. Question: An employee is starting his own business with a friend and desires to use certain of the Company’s proprietary software, which he created for the Company, in building his own products. Can the employee do this?

   Answer: No. The employee is misappropriating Company property and is opening himself, and his friend, up to legal liability.

9. Question: An employee learns through another employee that the Company is engaged in negotiations for a state portal contract with State X. Employee knows that a contract with State X would be a significant win for the Company and in her excitement, she lets the information slip to her best friend. Has the employee violated Company policy?

   Answer: Yes, this disclosure, while not intentional, violates Company policy. Beyond breaching her confidentiality obligations to the Company (as well as the Company’s Trading Policies and Disclosure of Non-Public Information document), if she or the friend, or another who has heard the news as a result of the employee’s disclosure, trades on this information, the employee may face significant, additional legal consequences.

10. Question: An employee has a difficult time remembering his login and password for his Company computer. Because of this, he has written his login and password down on two pieces of paper, and left one of the pieces of paper in his desk at work, and the other one in his desk at home. Is this allowed?

    Answer: No. Every employee is responsible for safeguarding his or her login and password. Writing this information down and leaving it in such conspicuous and obvious places is not allowed and is a violation of Company policy.

11. Question: A portal employee is working with the Corporate Security Team to address a suspected, but not yet confirmed, breach of customer information due to an issue with a portal application. The employee receives a call from the partner requesting very specific information on the suspected breach. The employee knows that all communications are supposed to go through the Security Team but feels that she can adequately relay what the Security Team has relayed to her, and proceeds to update the partner based on the information received from the Security Team. Has the employee violated Company policy?

    Answer: Yes. All communications with partners regarding security incidents and/or breaches should be handled by security professionals, including the Corporate Security Team. Because of the sensitive nature of a security incident/breach, and because an employee may be privy to certain information that is not appropriate for communication to the partner (or not appropriate at that time), the employee should not handle partner communications without the direct involvement and authorization of the Corporate Security Team.

12. Question: As part of her day-to-day responsibilities, a portal employee works very closely with a Company alliance partner on certain projects. The alliance partner has been involved with several other portals and has a good reputation. One day, the employee notices that an alliance partner employee has accessed certain non-public information in the Company’s possession that is not, in the employee’s mind, necessary for the performance of the alliance partner’s duties. What should the employee do?

    Answer: The employee should report this immediately to her General Manager, as well as the Company’s General Counsel. Regardless of the alliance partner’s reputation or history of working well with other portals, the alliance partner (or at the very least, an employee) has gained unauthorized access to non-public information that it is not entitled to have. If the information is Company information, then there is a risk to the Company of loss/misuse of its information, which may result in significant economic and reputational losses. If the information is customer information, or State information, then beyond damage to the customers or the State, the Company itself may be liable to its State partners based on the portal contract, and/or State and Federal law. To help mitigate any additional losses and/or liability, the appropriate Company personnel must be notified immediately.

13. Question: A Company employee must move several heavy and awkward boxes full of equipment into a Company office. The employee decides to move the boxes on a weekend, when he is less likely to disrupt other employees. When the employee arrives at the office, the public areas surrounding the office building is vacant, and to make his moving easier, the employee props open the internal office door so that he can make several trips from his truck to the office without having to unlock or open the door each time. Has the employee violated Company policy?

    Answer: Yes. The employee should move the boxes during normal business hours when the front desk will be manned, enlist the assistance of another employee to keep watch over the door while he moves the boxes, or shut and lock the door in between dropping each box off. While the risk may not appear significant to the employee given that the area appears vacant, he does not know this for certain (and in any event, the area may not be vacant the entire time the employee is moving the boxes). This scenario creates a significant physical security risk and is a violation of Company policy.

14. Question: A portal employee receives a call from a government partner asking for certain Company records. The records being requested are not a part of the usual and customary records that are provided to the partner on a regular basis and have never been shared with the partner before. Should the employee release the records to the partner?

    Answer: No. If the records being requested are not a part of records regularly provided to the partner, then chances are the records are internal/confidential records of the Company and the partner is not entitled to them. The employee should contact his supervisor, who should in turn contact the Corporate Security Team and Corporate Legal Department for additional direction.

15. Question: An employee is in the process of starting her own business. The business will not compete with the Company in any way, but because the employee’s start-up budget is very small, she intends to borrow certain pieces of Company property that are not frequently used until she can afford to buy her own. Would this conduct violate Company policy?

    Answer: Yes. Except to the extent that it occurs in the ordinary course of business, an employee is required to obtain prior authorization before taking Company assets, even if they are not used often and even if the employee intends to return the same. Since an employee’s taking and continued use of Company assets for personal profit is not in the Company’s ordinary course of business, the employee’s actions violate Company policy.

16. Question: A supervisor is reviewing an expense report for her direct report, and notices that one of the expenses is simply an entry for $25.00 for what appears to be a grocery store. The items listed on the receipt are small food items, but the expense report does not detail what the items were purchased for. Because the amount is not significant, and because this employee has, on occasion, purchased items for the Company, the supervisor assumes that the entry is for Company purchases and approves the expense report. Has the supervisor violated Company policy?

    Answer: Yes. Company policy requires that all individuals approving or certifying an expense report have reasonable knowledge that the expenses are proper. Although certain facts make it appear that the entry is for a Company expense, it is not reasonable for the supervisor to assume that without additional detail from the employee.

17. Question: While giving a presentation to a potential client, a Company employee states that the client should choose to do business with the Company, since unlike the other vendor being considered by the client, “you never have to worry about your money disappearing.” The other vendor was previously investigated for suspicion of misusing a customer’s funds, but was cleared of all wrongdoing. Did the employee violate Company policy?

    Answer: Yes. Not only has the employee violated the Competition Laws section of this policy, but the employee personally, as well as the Company, may be liable to the other vendor for the statement.

18. Question: An employee subject to the Code of Ethics for CEO and Financial Officers knows information that he believes calls into question the integrity of the Company’s financial reports. Other employees subject to the Code of Ethics for CEO and Financial Officers do not agree with the employee’s assessment. What should the employee do?

    Answer: The employee should bring the matter to the attention of the Audit Committee for full discussion and disclosure.

19. Question: An employee intends to run for a significant political office in a State where the Company operates. Should the employee notify the Company of her intentions?

    Answer: Yes. The employee should notify the Company of her plans so that any conflict of interest can be identified and addressed.

20. Question: An employee has witnessed his supervisor harassing another employee continuously, despite the employee’s requests that the supervisor stop. Several other employees have witnessed the harassment as well, but none have reported the conduct out of fear for their jobs. The employee is likewise afraid for his job, and does not report the conduct. Has the employee violated Company policy?

    Answer: Yes. Company policy requires that any actual or suspected violation of a Company policy, or the law, must be reported. The employee must report the conduct, although he has flexibility in the method of reporting, and may choose to use the Reporting Hotline Policy to report the conduct.

Disclaimer: The information posted is as of the date indicated. We are under no obligation to update or remove outdated information other than as required by applicable law or regulation.