Ethical Business Practices

Company policy requires Directors, employees and agents to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Directors and employees must practice fair dealing, honesty and integrity in every aspect of dealing with other Company employees, the public, the business community, shareholders, customers, suppliers, competitors and government authorities. When acting on behalf of the Company, Directors and employees shall not take unfair advantage through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or other unfair-dealing practices.

Company policy prohibits unlawful discrimination against employees, shareholders, Directors, officers, customers or suppliers on account of race, color, age, sex, religion or national origin. All persons shall be treated with dignity and respect and they shall not be unreasonably interfered with in the conduct of their duties and responsibilities.

No Director or employee should be misguided by any sense of loyalty to the Company or a desire for profitability that might cause him or her to disobey any applicable law or Company policy. Violation of Company policy will constitute grounds for disciplinary action, including, when appropriate, termination of employment.

Reference: Corporate Policy 3-0001

Sensitive Transactions

Company policy prohibits its Directors, employees and agents from entering into sensitive transactions. If such a transaction occurs, the Company and its officers, Directors and employees directly involved may be subject to fines, imprisonment and civil litigation.

The term "sensitive transactions" is commonly used to describe a broad range of business dealings generally considered to be either illegal, unethical, immoral or to reflect adversely on the integrity of the Company. These transactions are usually in the nature of kickbacks, gifts of significant value, bribes or payoffs made to favorably influence some decision affecting a company's business or for the personal gain of an individual. These transactions may result in violation of various laws, including the United States Foreign Corrupt Practices Act (the "FCPA") and similar laws of other countries.

Company policy and the FCPA prohibits the Company and its officers, Directors, employees and agents from corruptly offering or giving anything of value to:

  • An official, including any person acting in an official capacity for a government outside the United States or an official of a public international organization;
  • A political party official or political party outside the United States; or
  • A candidate for political office outside the United States directly or indirectly, for the purpose of influencing any act or decision of these officials in their official capacity or in violation of their lawful duties or to secure any improper advantage in order to help the Company obtain or retain business or direct business to any person.

Employees of government-owned companies, such as national oil companies, are considered to be government officials.

Company policy prohibits any Director, employee or agent from making any payment or engaging in any transaction that is prohibited by the FCPA.

This policy does not prohibit properly made and recorded facilitating payments. Sometimes the Company may be required to make facilitating or expediting payments to a low-level government official or employee in some countries other than the United States to expedite or secure the performance of routine governmental action by the government official or employee. Such facilitating payments may not be illegal under the FCPA and similar laws of other countries. Nevertheless, it may be difficult to distinguish a legal facilitating payment from an illegal bribe, kickback or payoff. Accordingly, facilitating payments must be strictly controlled and every effort must be made to eliminate or minimize such payments. Facilitating payments, if required, will be made only in accordance with the advance guidance of the Law Department. All facilitating payments must be recorded accurately as facilitating payments in the accounting records of the Company.

Reference: Corporate Policy 3-0005

Commercial Bribery

Company policy prohibits commercial bribes, kickbacks and other similar payoffs and benefits paid to any suppliers or customers.

Directors, employees and agents are also prohibited from receiving, directly or indirectly, anything of a significant value (other than salary, wages or other ordinary compensation from the Company) in connection with a transaction entered into by the Company.

Bribery of suppliers or customers includes any payment for the benefit of any representative of the supplier or customer. It includes:

  • Gifts of other than nominal value;
  • Cash payments by Directors, employees or third persons, such as agents or consultants, who are reimbursed by the Company;
  • The uncompensated use of Company services, facilities or property, except as may be authorized by the Company; and
  • Loans, loan guarantees or other extensions of credit.

This policy does not prohibit expenditures of reasonable amounts for meals and entertainment of suppliers and customers which are an ordinary and customary business expense, if they are otherwise lawful. Expenditures of this type should be included on expense reports and approved under standard Company procedures.

Reference: Corporate Policy 3-0006

Accounting Controls, Procedures and Records

Applicable laws and Company policy require the Company to keep books and records that accurately and fairly reflect its transactions and the dispositions of its assets. In addition, the Company must maintain a system of internal accounting controls that will ensure the reliability and adequacy of its books and records. Failure to meet such requirements may constitute a violation of law.

To satisfy these requirements, the Company has adopted policies to ensure that only proper transactions are entered into by the Company, that such transactions have proper management approval, that such transactions are properly accounted for in the books and records of the Company, and that the reports and financial statements of the Company are timely prepared, understandable and fully, fairly and accurately reflect such transactions. All Directors and employees having any responsibility for such functions must be familiar with the Company's policies, accounting controls, procedures and records, and must comply with their requirements.

Reference: Corporate Policy 3-0004

Use and Disclosure of "Inside Information"

The laws of the United States and many other countries regulate the use and disclosure of nonpublic information concerning the Company because its shares are publicly traded. This information is often referred to as "inside information" because it has not been publicly disclosed. The Company has policies (based in part on such laws) concerning the use and disclosure of inside information.

Company policy prohibits the disclosure of inside information to anyone other than persons within the Company whose positions require them to know such information.

Company policy also prohibits trading in Company securities, including stock options, by any employee while in the possession of material inside information. Information is "material" if it could affect a person's decision whether to buy or sell securities. It is also against Company policy for any person in possession of inside information to recommend that others buy or sell Company securities on the basis of such information.

If an employee or agent of the Company has inside information about the Company, he or she must wait until the end of business on the second business day after the information has been properly disclosed to the public before buying or selling Company securities. More restrictive rules apply to certain key employees, officers and Directors.

A Director, employee or agent shall not trade in the securities of another company if, in the course of his or her employment or due to his or her position with the Company, nonpublic information is learned about such other company that is likely to affect the price of such securities.

Company Directors, employees and agents are discouraged from short-term speculation in the securities of the Company.

It is Company policy that no preferential treatment will be given with respect to the disclosure of inside information. The Company has adopted procedures to avoid improper preferential disclosures.

Reference: Corporate Policy 3-0008

Confidential or Proprietary Information

Company Directors, employees and agents often learn confidential or proprietary information about the Company or its customers. Company policy prohibits Directors, employees and agents from disclosing or using confidential or proprietary information outside the Company or for personal gain, either during or after employment, without proper written Company authorization to do so. An unauthorized disclosure could be harmful to the Company or a customer or helpful to a competitor.

The Company also works with proprietary data of customers, suppliers and joint venture partners. This is an important trust and must be discharged with the greatest care for the Company to merit the continued confidence of its customers, suppliers and joint venture partners. No Director, employee or agent shall disclose or use confidential or proprietary information outside the Company without Company authorization, nor shall any Director, employee or agent disclose such information to other employees except on a need-to-know basis.

Reference: Corporate Policy 3-0009

Conflicts of Interest

Company policy prohibits conflicts between the interests of its Directors or employees and the Company. A complete definition of what constitutes a conflict of interest is difficult. There are some situations, however, that will always be considered a prohibited conflict of interest. These situations occur when a Director or employee or any person having a close personal relationship with the Director or employee:

  • Obtains a significant financial or other beneficial interest in one of the Company's suppliers, customers or competitors without first notifying the Company and obtaining written approval from the Chief Executive Officer or his or her designee;
  • Engages in a significant personal business transaction involving the Company for profit or gain, unless such transaction has first been approved in writing by the Chief Executive Officer or his or her designee;
  • Accepts money, gifts of other than nominal value, excessive hospitality, loans, guarantees of obligations or other special treatment from any supplier, customer or competitor of the Company (loans from lending institutions at prevailing interest rates are excluded);
  • Participates in any sale, loan or gift of Company property without obtaining written approval from the Chief Executive Officer or his or her designee;
  • Learns of a business opportunity through association with the Company and discloses it to a third party or invests in or takes the opportunity personally without first offering it to the Company;
  • Uses corporate property, information, or position for personal gain; or
  • Competes with the Company.

A conflict of interest may arise because of outside directorships, personal use of Company property or obtaining Company services for personal benefit.

"Person having a close personal relationship with the Director or employee" refers to the Director's or employee's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, any person living in the same house with the Director or employee or any business associate of the Director or employee.

Periodically the Company requires certain employees to certify to the Company that they have complied with all requirements of the Code of Business Conduct. Disclosure of a particular situation that may be a conflict of interest does not mean that the Company will consider it to be substantial enough to be prohibited. Each situation will be considered on an individual basis.

Reference: Corporate Policy 3-0003

Fraud and Similar Irregularities

Company policy prohibits fraud and establishes procedures to be followed concerning the recognition, reporting and investigation of suspected fraud. Fraud includes, but is not limited to:

  • Dishonest or fraudulent act;
  • Embezzlement;
  • Forgery or alteration of negotiable instruments such as Company checks and drafts;
  • Misappropriation of Company, employee, customer, partner or supplier assets;
  • Conversion to personal use of cash, securities, supplies or any other Company asset;
  • Unauthorized handling or reporting of Company transactions; and
  • Falsification of Company records or financial statements for personal or other reasons.

Directors and employees are obligated to protect the Company's assets and ensure their efficient use. Theft, carelessness and waste of Company assets by Directors and employees are prohibited since such actions and conduct have a direct and negative impact on the Company's profitability. All Company assets shall only be used for the legitimate business purposes of the Company.

Any Director, employee or agent who suspects that any fraudulent activity may have occurred is required to report such concern to the Law Department, Audit Services, Security Department, or the Company's Chief Financial Officer. All fraud investigations will be conducted under the direction of the Law Department.

Reference: Corporate Policy 3-0015