CODE OF ETHICS :
Abtech Holdings, Inc. (the “Company”) has adopted this Code of Ethics (this “Code”) in order to promote ethical conduct, including with respect to financial management and reporting. As a Company that intends to maintain a quotation on the Over-the-Counter Bulletin Board or a national stock exchange, and to ensure compliance with the statutes, rules and regulations applicable to the Company, it is essential that the Company’s filings with the Securities and Exchange Commission are accurate, complete and understandable. Senior executive officers hold an important and elevated role in this process. This Code applies to:
(i) the Chief Executive Officer, the President, the Chief Financial Officer, Chief Accounting Officer, Secretary and Treasurer of the Company, and
(ii) any other persons that may be designated by the Board of Directors (each, a “Senior Officer”).
Each Senior Officer shall:
1. Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.
2. Provide the Board of Directors with information that is accurate, complete, objective, relevant, timely and understandable.
3. Comply with laws, rules and regulations of federal, state and local governments and regulatory agencies.
4. Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing his or her independent judgment to be subordinated.
5. Respect the confidentiality of information acquired in the course of his or her work at the Company except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of his or her work will not be used for personal advantage.
6. Share knowledge and maintain skills important and relevant to the Company’s needs.
7. Proactively promote ethical behavior within the Company.
8. Promote responsible use of and control over all Company assets and resources.
9. Disclose information required to be included in periodic reports filed with the Securities and Exchange Commission or required to be provided to any other governmental entity fully and fairly and in an understandable and timely manner.
10. Promptly disclose to the Board of Directors any violations of this Code of which the Senior Officer becomes aware.
Violations of this Code may subject a Senior Officer to disciplinary action, ranging from a reprimand to dismissal and possible criminal prosecution.
Each Senior Officer shall certify each year that such Officer has not violated this Code and is not aware of any violations of this Code that have not been reported to the Board of Directors.
This Code may be amended, modified or waived by the Board of Directors, subject to the disclosure and other provisions of the Securities Exchange Act of 1934, and the rules thereunder.
CHARTER OF THE AUDIT COMMITTEE OF ABTECH HOLDINGS, INC.
The Audit Committee (the “Committee”) is a committee of the Board of Directors (the “Board”) of Abtech Holdings, Inc. (the “Company”).
The Committee is appointed by the Board for the primary purposes of:
(i) Performing the Board’s oversight responsibilities as they relate to the Company’s accounting policies and internal controls, financial reporting
practices and legal and regulatory compliance, including, among other things:
(a) the quality and integrity of the Company’s financial statements;
(b) the Company’s compliance with legal and regulatory requirements;
(c) review of the independent auditors’ qualifications and independence; and
(d) the performance of the Company’s internal audit function and the Company’s independent auditors;
(ii) Maintaining, through regularly scheduled meetings, a line of communication between the Board and the Company’s financial management, internal auditors and independent auditors, and
(iii) Preparing the report to be included in the Company’s annual proxy statement, as required by the Securities and Exchange Commission’s (“SEC”) rules.
III. COMPOSITION AND QUALIFICATIONS
The Committee shall be appointed by the Board and shall be comprised of three or more Directors (as determined from time to time by the Board), each of whom shall meet the independence requirements of the Sarbanes-Oxley Act of 2002 (the “Act”) and all other applicable law. Each member of the Committee shall be financially literate and at least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities, as each such qualification is interpreted by the Board in its business judgment. In addition, to the extent practicable at least one member of the Committee shall be an “audit committee financial expert” as such term is defined by the SEC.
The Committee will:
1. Review and discuss the annual audited financial statements and the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in reports filed with the SEC with management and the independent auditors. In connection with such review, the Committee will:
(i) Discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (as may be modified or supplemented) (AICPA, Professional Standards, Vol. 1 AU section 308), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, and the written disclosures and letter from the independent auditors required by applicable requirements of the PCAOB regarding the independent auditors’ communications with the Committee concerning independence;
(ii) Review significant changes in accounting or auditing policies;
(iii) Review with the independent auditors any problems or difficulties encountered in the course of their audit, including any change in the scope of the planned audit work and any restrictions placed on the scope of such work and management’s response to such problems or difficulties;
(iv) Review with the independent auditors, management and the senior internal auditing executive the adequacy of the Company’s internal controls, and any significant findings and recommendations with respect to such controls;
(v) Review reports required to be submitted by the independent auditor concerning: (a) all critical accounting policies and practices used; (b) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, the ramifications of such alternatives, and the accounting treatment preferred by the independent auditors; and (c) any other material written communications with management;
(vi) Review (a) major 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; and (b) 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 analysis of the effects of alternative GAAP methods on the financial statements and the effects of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; and
(vii) Discuss policies and procedures concerning earnings press releases and review the type and presentation of information to be included in earnings press releases (paying particularly attention to any use of “pro forma” or “adjusted” non-GAAP information), as well as financial information and earnings guidance provided to analysts and rating agencies.
2. Review and discuss with Management, the senior internal auditing executive and the independent auditor the quarterly financial statements and the Company’s disclosures provided in periodic quarterly reports including “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
3. Oversee the external audit coverage. The Company’s independent auditors are ultimately accountable to the Committee, which has the direct authority and responsibility to appoint, retain, compensate, terminate, select, evaluate and, where appropriate, replace the independent auditors. In connection with its oversight of the external audit coverage, the Committee will:
(i) Have authority to appoint and replace (subject to stockholder approval, if deemed advisable by the Board) the independent auditor;
(ii) Have authority to approve the engagement letter and the fees to be paid to the independent auditors;
(iii) Pre-approve all audit and non-audit services to be performed by the independent auditors and the related fees for such services other than prohibited nonauditing services as promulgated under rules and regulations of the SEC (subject to the inadvertent de minimus exceptions set forth in the Act and the SEC rules);
(iv) Obtain confirmation and assurance as to the independent auditors’ independence, including ensuring that they submit on a periodic basis (not less than annually) to the Committee a formal written statement delineating all relationships between the independent auditors and the Company. The Committee is responsible for actively engaging in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and for taking appropriate action in response to the independent auditors’ report to satisfy itself of their independence;
(v) At least annually, obtain and review a report by the independent auditors describing: the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and to assess the independent auditors’ independence, all relationships between the independent auditors and the Company;
(vi) Meet with the independent auditors prior to the annual audit to discuss planning and staffing of the audit;
(vii) Review and evaluate the performance of the independent auditors, as the basis for a decision to reappoint or replace the independent auditors;
(viii) Set clear hiring policies for employees or former employees of the independent auditors, including but not limited to, as required by all applicable laws and listing rules; and
(ix) Assure regular rotation of the lead audit partner, as required by the Act, and consider whether rotation of the independent auditor is required to ensure independence.
4. Oversee internal audit coverage. In connection with its oversight responsibilities, the Committee will:
(i) Review the appointment or replacement of the senior internal auditing executive;
(ii) Review, in consultation with management, the independent auditors and the senior internal auditing executive, the plan and scope of internal audit activities;
(iii) Review internal audit activities, budget and staffing; and
(iv) Review significant reports to management prepared by the internal auditing department and management’s responses to such reports.
5. Review with the independent auditors and the senior internal auditing executive the adequacy of the Company’s internal controls, and any significant findings and recommendations with respect to such controls.
6. Resolve any differences in financial reporting between management and the independent auditors.
7. Establish procedures for (i) receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
8. Discuss policies and guidelines to govern the process by which risk assessment and risk management is undertaken.
9. Meet periodically with management to review and assess the Company’s major financial risk exposures and the manner in which such risks are being monitored and controlled.
10. Meet periodically (not less than annually) in separate executive session with each of the chief financial officer, the senior internal auditing executive, and the independent auditors.
11. Review and approve all “related party transactions” requiring disclosure under SEC Regulation S-K, Item 404, as amended from time to time, or any successor regulation or statute.
12. Review periodically with the Company’s General Counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct.
13. As appropriate, obtain advice and assistance from outside legal, accounting or other advisers.
14. Report regularly to the Board with respect to Committee activities.
15. Prepare the report of the Committee required by the rules of the SEC to be included in the proxy statement for each annual meeting.
16. Review and reassess annually the adequacy of this Committee Charter and recommend any proposed changes to the Board.
A majority of the members of the entire Committee shall constitute a quorum. The Committee shall act on the affirmative vote a majority of members present at a meeting at which a quorum is present. Without a meeting, the Committee may act by unanimous written consent of all members. However, the Committee may delegate to one or more of its members the authority to grant pre-approvals of audit and permitted non-audit services, provided the decision is reported to the full Committee at its next scheduled meeting.
The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation: (a) to outside legal accounting or other advisors employed by the Committee; and (b) for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with GAAP. This is the responsibility of management and the independent auditors.
CHARTER OF THE COMPENSATION COMMITTEE OF ABTECH HOLDINGS, INC.
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Abtech Holdings, Inc. (the “Company”) shall consist of three or more directors. Each member of the Committee shall be independent in accordance with the independence requirements of the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”) from time to time, and any other statutes or regulations applicable to the Company.
At least two members of the Committee must qualify as “non-employee directors” for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and as “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code, as amended.
The members of the Committee shall be appointed by the Board. The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.
The purpose of the Committee is to carry out the responsibilities delegated by the Board relating to the review and determination of executive compensation.
III. DUTIES AND RESPONSIBILITIES
The Committee shall have the following authority and responsibilities:
(i) To review and approve annually the corporate goals and objectives applicable to the compensation of the chief executive officer (“CEO”), evaluate at least annually the CEO’s performance in light of those goals and objectives, and determine and approve the CEO’s compensation level based on this evaluation.
(ii) To make recommendations to the Board regarding the compensation of all other executive officers.
(iii) To review, and make recommendations to the Board regarding, incentive compensation plans and equity-based plans, and where appropriate or required, recommend for approval by the stockholders of the Company, which includes the ability to adopt, amend and terminate such plans.
(iv) To review and discuss with management the Company’s Compensation Discussion and Analysis (“CD&A”) and the related executive compensation information, recommend that the CD&A and related executive compensation information be included in the Company’s annual report on Form 10-K and proxy statement and produce the compensation committee report on executive officer compensation required to be included in the Company’s proxy statement or annual report on Form 10-K.
(v) To review, and make recommendations to the Board regarding, any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, for the CEO and other executive officers, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans.
(vi) To determine stock ownership guidelines for the CEO and other executive officers and monitor compliance with such guidelines.
(vii) To review, and make recommendations to the Board regarding, all employee benefit plans for the Company, which includes the ability to adopt, amend and terminate such plans.
(viii) To review the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking, to review and discuss at least annually the relationship between risk management policies and practices and compensation, and to evaluate compensation policies and practices that could mitigate any such risk.
IV. OUTSIDE ADVISORS
The Committee shall have the authority, in its sole discretion, to select, retain and obtain the advice of a compensation consultant as necessary to assist with the execution of its duties and responsibilities as set forth in this Charter. The Committee shall set the compensation, and oversee the work, of the compensation consultant. The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside counsel and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall set the compensation, and oversee the work, of its outside counsel and other advisors. The Committee shall receive appropriate funding from the Company, as determined by the Committee in its capacity as a committee of the Board, for the payment of compensation to its compensation consultants, outside counsel and any other advisors.
The compensation consultant, outside counsel and any other advisors retained by the Committee shall be independent in accordance with the rules and regulations promulgated by the SEC from time to time, and any other statutes or regulations applicable to the Company.
V. STRUCTURE AND OPERATIONS
The Board shall designate a member of the Committee as the chairperson. The Committee shall meet at least four times a year at such times and places as it deems necessary to fulfill its responsibilities. The Committee shall report regularly to the Board regarding its actions and make recommendations to the Board as appropriate. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.
The Committee may invite such members of management to its meetings as it deems appropriate. However, the Committee shall meet regularly without such members present, and in all cases the CEO and any other such officers shall not be present at meetings at which their compensation or performance is discussed or determined.
The Committee shall review this Charter at least annually and recommend any proposed changes to the Board for approval.
VI. DELEGATION OF AUTHORITY
The Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such
responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.
VII. PERFORMANCE EVALUATION
The Committee shall conduct an annual evaluation of the performance of its duties under this charter and shall present the results of the evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.