CODE OF BUSINESS CONDUCT AND ETHICS
(as adopted on April 27, 2017)
Conducting the business affairs of Avalara, Inc. (“Avalara” or the “Company”) in accordance with the highest ethical standards and in compliance with legal requirements aligns directly with our mission of providing transaction tax compliance solutions to our customers. Avalara’s reputation for ethical conduct, market leadership, and business success builds the bond between employees, members of the Board of Directors, shareholders, suppliers, consultants, and business partners, and is necessary to satisfy the demands of all of these critical constituents. Our continuing commitment to conduct ourselves with integrity provides a foundation for this mission. This code guides us in our day to day interactions, both inside and outside the Company.
This Code of Business Conduct and Ethics (the “Avalara Conduct Code” or the “Conduct Code”) applies to all employees (including officers), consultants, and members of the Board of Directors of the Company and its subsidiaries. You will be subject to disciplinary action if you violate this Avalara Conduct Code.
1. Applicable Law
The Avalara Conduct Code is subject to all applicable law. Nothing in this Avalara Conduct Code is intended to require any action contrary to law. If the Conduct Code conflicts with any law, you must comply with the law. Nothing in the Avalara Conduct Code is intended or will be considered (i) to amend the articles of incorporation or bylaws of the Company, (ii) to change the legal duties imposed by state, federal, and other applicable statutes, rules, and regulations, (iii) to expand liabilities beyond applicable law, (iv) to create or imply an employment contract or term of employment, or (v) to affect any rights available under state and other applicable law or the Company’s articles of incorporation or bylaws.
2. Questions about the Conduct Code
You should consult the appropriate persons if you have any questions about the Conduct Code. You are encouraged to talk to managers or other appropriate personnel when contemplating the best course of action in a particular situation. Working the issues through these channels will help develop a culture of active deliberations regarding ethical matters. If a manager does not provide a satisfactory response to any questions raised, or if you are not comfortable seeking guidance from a manager, you should seek guidance from the Avalara Legal Department in applying this Conduct Code to a particular fact case. In the event the issue rises to the level of a corporate governance ethical or legal concern, you should take your concerns directly to the Avalara Legal Department.
3. The Conduct Code and Other Company Policies and Procedures
You must comply with the policies and procedures of the Company, but if a policy or procedure conflicts with the Avalara Conduct Code, you should follow the Conduct Code. This Conduct Code provides general guidelines and is intended to promote (i) honest and ethical conduct, including the ethical handling or actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications; (iii) compliance with applicable laws, rules and regulations; (iv) prompt internal reporting of violations of the Avalara Conduct Code to appropriate persons; and (v) accountability for adherence to the Conduct Code. The Avalara Conduct Code is intended to complement, but not replace, the policies and procedures of the Company. If any policy or procedure of the Company conflicts with the Avalara Conduct Code, you must comply with the Conduct Code.
4. Conflicts of Interest
A “conflict of interest” exists when an individual’s private interest interferes in any way – or even appears to interfere – with the interests of the Company and must be avoided without prior approval. A conflict situation can arise when an individual takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest also arise when an individual, or a member of his or her family, receives improper personal benefits as a result of the individual’s position in the Company, whether received from the Company or a third party.
All employees, directors, and consultants must disclose any conflicts of interest, including any material transaction or relationship involving a potential conflict of interest. Any employee, director, or consultant who becomes aware of a conflict of interest or a potential conflict should bring it to the attention of a manager or member of the Avalara Legal Department.
No employee may work, including as a consultant or a board member, simultaneously for the Company and any Company competitor, customer, supplier or business partner without the prior written approval of the Company’s Legal Department. Employees are encouraged to avoid any direct or indirect business connections with the Company’s competitors, customers, suppliers or business partners, except on behalf of the Company.
Executive officers, directors, and their respective family members are prohibited from accepting any personal loans from the Company or allowing the Company to guarantee any of their personal obligations, except as may be permitted under federal law.
Employees, directors, and consultants should avoid creating conflicts of interest for the employees or other representatives of our current or prospective customers or partners. Reasonable gifts or business entertainment expenses that are designed to create goodwill on behalf of the Company are permitted, provided that they (i) are not lavish or excessive, (ii) do not violate applicable laws or the company policies of the customer or partner, and (iii) are not a bribe or kickback intended to influence or reward a business opportunity by conveying a significant personal benefit to a decision maker.
5. Corporate Opportunities
Employees and directors owe a duty to the Company to advance Avalara’s legitimate interests when the opportunity to do so arises. In assessing opportunities, employees and directors should use their best judgment, but are prohibited from (i) taking for themselves personally opportunities that properly belong to the Company or are discovered through the use of corporate property, information or position; (ii) using corporate property, information, or position for improper personal gain; and (iii) competing with the Company.
6. Confidentiality, Proprietary Information, and Intellectual Property
Employees, directors, and consultants of the Company must maintain the confidentiality of information entrusted to them by Avalara or its customers, except when disclosure is authorized by Avalara or is legally mandated. Employees and directors should, whenever feasible, consult with the Avalara Legal Department if they believe they have a legal obligation to disclose confidential information. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed.
If you are employed by the Company, you completed a “Proprietary Information and Inventions Agreement” (or a similar document) setting forth, among other obligations, your treatment of confidential information and intellectual property. You are expected to adhere strictly to the provisions of this agreement. Please re-read it from time-to-time to familiarize yourself with the terms of such agreement and consult with your manager or Avalara Legal Department if you have any questions.
7. Fair Dealing
All employees, directors, and consultants are required to conduct themselves honestly and ethically when carrying out the Company’s business, and to endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees. Employees, directors, and consultants are prohibited from taking unfair advantage of such persons through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practices.
Employees, directors, and consultants are prohibited from taking any action to improperly influence, coerce, manipulate or mislead the Company’s internal or outside auditors or to prevent such persons from performing a diligent audit of the Company’s financial statements.
8. Protection and Proper Use of Company Assets
Employees, directors, and consultants are expected to protect the Company’s assets and ensure their efficient use, and are prohibited from engaging in theft, carelessness, or waste. All Avalara assets should be used for legitimate business purposes, but incidental personal use may be permitted if ancillary to a business purpose and reimbursed in accordance with Company policy. Employees, directors, and consultants may not make any improper use of Company property such as Company facilities, funds, software, e-mail systems, voice mail systems, and computer networks.
9. Accuracy of Books and Records
All Company books, records and accounts shall be maintained in accordance with all applicable regulations and standards and accurately reflect the true nature of the transactions they record. Each person subject to this Conduct Code must follow any formal document retention policy of the Company with respect to Company records within such person’s control. The financial statements of the Company shall conform to generally accepted accounting rules and the Company’s accounting policies. All cash, bank accounts, investments and other assets always must be recorded in the official books of the Company. No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Company's books or records for any reason, and no disbursement of corporate funds or other corporate property shall be made without adequate supporting documentation.
10. Financial Reporting
The Company is required to follow strict accounting principles and standards, to report financial information accurately and completely in accordance with these principles and standards, and to have appropriate internal controls and procedures to ensure that our accounting and financial reporting complies with applicable laws. The integrity of our financial transactions and records is critical to the operation of our business and is a key factor in maintaining the confidence and trust of our employees, security holders, and other stakeholders.
The Company requires that all transactions be properly recorded, classified, and summarized in our financial statements, books, and records in accordance with our policies, controls, and procedures, as well as all generally accepted accounting principles, standards, laws, rules, and regulations for accounting and financial reporting. If you have responsibility for or any involvement in financial reporting or accounting, you should have an appropriate understanding of, and you should seek in good faith to adhere to, relevant accounting and financial reporting principles, standards, laws, rules, and regulations and the Company’s financial and accounting policies, controls and procedures. If you are a senior officer, you should seek to ensure that the internal controls and procedures in your business area are in place, understood, and followed.
Even if you are not directly involved in financial reporting or accounting, you are likely involved with financial records or reports of some kind — time sheet, invoice, or expense reports. In addition, most employees have involvement with product, marketing, or activities that can affect our reported financial condition or results. Therefore, the Company expects you, regardless of whether you are otherwise required to be familiar with finance or accounting matters, to use all reasonable efforts to ensure that every business record or report with which you deal is accurate, complete, and reliable.
11. Compliance with Company Policies, Laws, Rules, and Regulations
All employees, directors, and consultants are required to comply with the laws, rules, and regulations of the U.S., and other countries, and the states, counties, cities, and other jurisdictions in which the Company conducts its business or that are otherwise applicable to the Company. In addition, all employees, directors, and consultants are required to comply with applicable Avalara policies, including, but not limited to, the Avalara INSIDER TRADING POLICY, which governs the use of material non-public information of Avalara and its business partners, and the Avalara ANTI-CORRUPTION POLICY, which governs interactions with, and payments or gifts to, government officials.
This Avalara Conduct Code does not summarize all laws, rules and regulations applicable to the Company and its employees and directors. Please consult the Company’s Legal Department and the various guidelines that the Company prepares from time to time on specific policies, laws, rules and regulations. You are encouraged to direct questions to your manager or the Legal Department if you become concerned about the violation of law by the Company, its employees, directors, or consultants.
12. Discrimination and Harassment
Avalara values the diversity of its employees and partners. Harassment or discrimination by any employee, director, or consultant based on race, color, creed, gender, sexual orientation, gender identity, religion, national origin, disability, familial status, or any other protected status is strictly prohibited.
13. Compliance and Reporting
It is every employee’s, director’s, and consultant’s obligation to report suspected or actual violations of laws, government rules and regulations, the Conduct Code, or other Company policies. If an employee, director, or consultant has reason to believe that questionable or illicit conduct exists, the employee should immediately report the suspected wrongdoing to his/her manager by using the procedures set forth below. As noted below, managers are required to report to the General Counsel any time they receive a report of suspected wrongdoing under this policy by any Company employee, director, or consultant. Each manager will report any suspected violation, concern, or complaint reported to such person by employees or other sources to the General Counsel to assure proper treatment and retention. In addition, persons outside the Company may report complaints or concerns about suspected wrongdoing. These concerns and complaints should be reported immediately upon receipt to the General Counsel.
Managers, as well as the Legal Department, will promptly consider the information received by them under this policy or otherwise. Each person will take appropriate action, including investigation as appropriate, in accordance with applicable laws, governmental rules, and regulations, the Conduct Code and otherwise consistent with good business practice.
If you desire to report violations on an anonymous basis, you may contact Lighthouse Services, Avalara’s third-party operated anonymous whistleblower hotline, by any of the following methods:
- Website: www.lighthouse-services.com/avalara
- United States and Canada: 833-440-0009
- Countries outside of North America: 800-603-2869 (must dial country access code first) visit this link for access codes and dialing instructions: https://www.lighthouseservices.com/documentlink/International%20Tollfree%20Hotline%20Access%20Instructions.pdf
- E-mail: firstname.lastname@example.org (must include company name with report)
The Company will not allow retaliation for reports, made in good faith, of actual or suspected violations of this Conduct Code or other illegal or unethical conduct. Disciplinary action will be taken against anyone who retaliates directly or indirectly against any employee or other person who reports an actual or suspected violation of the Avalara Conduct Code. While it is the Company’s desire to address matters internally, nothing in this Conduct Code should discourage anyone from reporting any illegal activity, including any violation of the securities laws, antitrust laws or any other federal, state, or foreign law, rule, or regulation, to the appropriate regulatory authority. This Conduct Code should not be construed to prohibit anyone from testifying, participating, or otherwise assisting in any state or federal administrative, judicial, or legislative proceeding or investigation. Every person subject to this Conduct Code who testifies, participates, or otherwise assists in any such proceeding or investigation should act in good faith, responsibly, with due care, competence, and diligence, without misrepresenting material facts.
14. Amendment, Modification, or Waiver
The Avalara Conduct Code may be amended, modified, or waived from time to time. This Conduct Code may only be amended by the Board of Directors or the Audit Committee, except that the Legal Department may make non-material changes to ensure that this Conduct Code remains correct and accurate. Waivers of this Conduct Code may be made only as follows: (a) in the case of any executive officer or director of Avalara, by the Board of Directors or the Audit Committee, and (b) in the case of any other person, by the Chief Executive Officer, Chief Financial Officer, or General Counsel. This waiver requirement applies to any de facto waiver where an employee or director violates the Avalara Conduct Code but is not subjected to any internal sanctions. Any waiver of the Avalara Conduct Code for an executive officer or director will be disclosed to shareholders on a timely basis as required by applicable laws, rules and regulations.