EXHIBIT 14 - CODE OF CONDUCT - DIRECTORS AND EMPLOYEES
Published on October 5, 2004
CODE OF CONDUCT
FOR
DIRECTORS AND EMPLOYEES
OF
HARRIS & HARRIS GROUP, INC.
Harris & Harris Group, Inc. (the "Company") is
committed to conducting business in accordance with
applicable laws, rules and regulations and the highest
standards of business ethics, and to full and accurate
disclosure -- financial and otherwise -- in compliance with
applicable law. This Code of Conduct, which is applicable
to the Company's Chief Executive Officer, President, Chief
Financial Officer and Treasurer (or persons performing
similar functions) (together, "Senior Officers"), the
Company's Board of Directors (the "Board") and all other
employees (collectively, "Covered Persons"), sets forth
policies to guide you in the performance of your duties.
As a Covered Person, you must comply with
applicable law. You also have a responsibility to conduct
yourself in an honest and ethical manner. The Senior
Officers also have leadership responsibilities that include
creating a culture of high ethical standards and a
commitment to compliance, maintaining a work environment
that encourages the internal reporting of compliance
concerns and promptly addressing compliance concerns.
This Code of Conduct recognizes that certain laws
and regulations applicable to, and certain policies and
procedures adopted by, the Company govern your conduct in
connection with many of the conflict of interest situations
that may arise in connection with the operations of the
Company, including:
* the Investment Company Act of 1940, and the rules
and regulations promulgated thereunder by the
Securities and Exchange Commission (the "1940
Act"); and
* the Code of Ethics for Security Trading & Policy
Statement Regarding Corporate Information and
Insider Trading adopted by the Company pursuant
to Rule 17j-1 under the 1940 Act (collectively,
the "Company's 1940 Act Code of Ethics").
The provisions of the 1940 Act and the 1940 Act Codes of
Ethics are referred to herein collectively as the
"Additional Conflict Rules".
This Code of Conduct is different from, and is
intended to supplement, the Additional Conflict Rules.
Accordingly, a violation of the Additional Conflict Rules
by a Covered Person is hereby deemed not to be a violation
of this Code of Conduct, unless and until the Board shall
determine that any such violation of the Additional
Conflict Rules is also a violation of this Code of Conduct.
Covered Persons Should Act Honestly and Candidly
Each Covered Person has a responsibility to the
Company to act with integrity. Integrity requires, among
other things, being honest and candid. Deceit and
subordination of principle are inconsistent with integrity.
Each Covered Person must:
* act with integrity, including being honest and
candid while still maintaining the
confidentiality of information where required by
law or the Additional Conflict Rules;
* comply with the laws, rules and regulations that
govern the conduct of the Company's operations
and report any suspected violations thereof in
accordance with the section below entitled
"Compliance With Code Of Conduct"; and
* adhere to a high standard of business ethics.
Conflicts Of Interest
A conflict of interest for the purpose of this
Code of Conduct occurs when your private interests
interfere in any way, or even appear to interfere, with the
interests of the Company.
Covered Persons are expected to use objective and
unbiased standards when making decisions that affect the
Company. You are required to conduct the business of the
Company in an honest and ethical manner, including the
ethical handling of actual or apparent conflicts of
interest between personal and business relationships. When
making any investment, accepting any position or benefits,
participating in any transaction or business arrangement or
otherwise acting in a manner that creates or appears to
create a conflict of interest with respect to the Company
where you are receiving a personal benefit, you should act
in accordance with the letter and spirit of this Code of
Conduct.
If you are in doubt as to the application or
interpretation of this Code of Conduct to you as a Covered
Person of the Company, you should make full disclosure of
all relevant facts and circumstances to the Chief
Compliance Officer and obtain his or her approval prior to
taking action. In material situations, the Chief
Compliance Officer should consult with the Chair of the
Audit Committee if practicable prior to making a
determination.
Some conflict of interest situations that should
always be approved include the following:
* the receipt of any entertainment or non-nominal
gift by the Covered Person, or a member of his or
her immediate family, from any company with which
the Company has current or prospective business
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dealings, unless such entertainment or gift is
business related, reasonable in cost, appropriate
as to time and place, and not so frequent as to
raise any question of impropriety;
* any ownership interest in, or any consulting or
employment relationship with, any of the
Company's service providers; or
* a direct or indirect financial interest based
upon or varying with the level of commissions,
transaction charges or spreads paid by the
Company for effecting portfolio transactions or
for selling or repurchasing shares.
Disclosures
It is the policy of the Company to make full,
fair, accurate, timely and understandable disclosure in
compliance with all applicable laws and regulations in all
reports and documents that the Company files with, or
submits to, the Securities and Exchange Commission or a
national securities exchange and in all other public
communications made by the Company. As a Covered Person,
you are required to promote compliance with this policy and
to abide by the Company's standards, policies and
procedures designed to promote compliance with this policy.
Each Covered Person must not knowingly misrepresent,
or cause others to misrepresent, facts about the Company to
others, including to the Board members, the Company's
independent auditors, the Company's counsel, governmental
regulators or self-regulatory organizations.
Each Senior Officer must familiarize himself or
herself with the disclosure requirements applicable to the
Company and its policies in that regard as well as the
business and financial operations of the Company.
Compliance With Code Of Conduct
If you know of or suspect a violation of this
Code of Conduct or other laws, regulations, policies or
procedures applicable to the Company, you must report that
information on a timely basis to the Chief Compliance
Officer or the Chair of the Audit Committee or report it
anonymously by following the "whistle blower" policies
adopted by the Company from time to time. No one will be
subject to retaliation because of a good faith report of a
suspected violation.
The Company will follow these procedures in
investigating and enforcing this Code of Conduct, and in
reporting on this Code of Conduct:
* the Chief Compliance Officer or the Chair of the
Audit Committee will take all appropriate action
to investigate any actual or potential violations
reported to him or her;
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* violations and potential violations by a Senior
Officer and material violations by other Covered
Persons will be reported to the Board after such
investigation;
* if the Chief Compliance Officer or Chair of the
Audit Committee determines that a violation has
occurred, he or she will take all appropriate
disciplinary or preventive action, which shall
follow review by the Board in situations that are
material; and
* appropriate disciplinary or preventive action may
include a letter of censure, reduction in
compensation, damages, suspension, dismissal or,
in the event of criminal or other serious
violations of law, notification of the Securities
and Exchange Commission or other appropriate law
enforcement authorities.
Waivers Of Code Of Conduct
Except as otherwise provided in this Code of
Conduct, the Chief Compliance Officer is responsible for
applying this Code of Conduct to specific situations in
which questions are presented and has the authority to
interpret this Code of Conduct in any particular situation.
Such responsibility is shared with the Chair of the Audit
Committee. One or both such persons shall take all action
he or she considers appropriate to investigate any actual
or potential violations reported under this Code of
Conduct.
The Chief Compliance Officer and the Chair of the
Audit Committee are authorized to consult, as appropriate,
with the Independent Directors, other members of management
and with counsel.
The Board is responsible for granting waivers of
this Code of Conduct with respect to Senior Officers. Any
changes to or waivers for Senior Officers of this Code of
Conduct will, to the extent required, be disclosed on Form
10-K, or otherwise, as provided by Securities and Exchange
Commission rules.
Recordkeeping
The Company will maintain and preserve for a
period of not less than six (6) years from the date an
action is taken, the first two (2) years in an easily
accessible place, a copy of the information or materials
supplied to the Board:
* that provided the basis for any amendment to or
waiver for a Senior Officer of this Code of
Conduct; and
* relating to any violation of this Code of Conduct
and sanctions imposed for such violation,
together with a written record of the approval or
action taken by the Chair of the Audit Committee
or the Board.
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Confidentiality
All reports and records prepared or maintained
pursuant to this Code of Conduct shall be considered
confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this
Code of Conduct, such matters shall not be disclosed to
anyone other than the Company and its counsel and any other
advisors, consultants or counsel retained by the Board or
any committee of the Board.
Amendments
This Code of Conduct may not be amended except in
written form, which is specifically approved by a majority
vote of the Board including a majority of the Independent
Directors.
No Rights Created
This Code of Conduct is a statement of certain
fundamental principles, policies and procedures that govern
each of the Covered Persons in the conduct of the Company's
business. It is not intended to and does not create any
rights in any employee, investor, supplier, competitor,
shareholder or any other person or entity.
Adopted May 2004
Revised September 2004
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