Code of Conduct

STM INDUSTRIES, INC. CODE OF BUSINESS CONDUCT AND ETHICS

(July 1, 2020)

 

Introduction

STM Industries, Inc., its Board of Directors (the “Board”), and its executive leadership team, take ethics and compliance seriously and are committed to protecting our culture of integrity. These standards are reflected in our Code of Business Conduct and Ethics (the “Code”), which has been adopted by STM Industries, Inc., and all of its current and future subsidiaries and controlled affiliates (together, the “Company”). This Code summarizes basic guiding principles and standards of conduct to guide all employees, officers and directors of the Company in meeting our goal of achieving the highest business and personal ethical standards as well as compliance with the laws and regulations applicable to our business.

This Code covers a wide range of business practices and procedures, but it does not address every applicable law or respond to every ethical question or concern that may arise. All of our employees, officers and directors must conduct themselves accordingly in every aspect of our business and seek to avoid even the appearance of wrongdoing or improper behavior – we have worked hard for decades to establish our reputation as a Company and must do whatever we can to protect it.

Our commitment has been, and will continue to be, to adhere to the highest standards of ethical conduct. We expect this of our employees, officers and directors, just as we expect the Company’s business partners (including agents, consultants, contractors, suppliers and representatives) to be guided by the principles and standards set forth in this Code.

Thank you for your commitment to continuing to build our reputation, relationships and business.

NOTHING IN THIS CODE CONSTITUTES A CONTRACT OF EMPLOYMENT. ALL EMPLOYEES OF THE COMPANY ARE EMPLOYED “AT WILL,” MEANING THAT EITHER THE EMPLOYEE OR THE COMPANY MAY TERMINATE THE EMPLOYMENT RELATIONSHIP AT ANY TIME AND FOR ANY REASON, WITHOUT NOTICE.

 

 

I.         Compliance with Laws, Rules and Regulations

Obeying the laws, rules and regulations where we do business and adhering to our values, both in letter and in spirit, is the foundation on which our Company’s ethical standards, is built. All employees, officers and directors must understand and respect and obey the laws under which we operate, including but not limited to, those related to labor, social security, immigration, health and safety, and the environment. Although not all employees are expected to know the details of these laws, rules and regulations, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel who should consult with the Ethics Officer as necessary or appropriate. If we are unsure of whether a contemplated action is permitted by law or the Company’s policy, we should seek guidance. We are responsible for preventing violations of law and for speaking up if we see possible violations.

To promote compliance with laws, rules, regulations and the policies of the Company, including anti-discrimination and anti-harassment laws and policies, the Company has established various compliance policies and procedures and, where appropriate, conducts information and training sessions.

II.        Conflicts of Interest

A “conflict of interest” exists when a person’s personal or family interest interferes—or even appears to interfere—in any way with the interests of the Company. All employees, officers ,and directors are expected to act in the best interests of the Company. Never use the Company’s property or information for personal gain or personally take for yourself any opportunity that is discovered through your position with the Company. Avoid any investment, interest, association or activity that may cause others to doubt your fairness or integrity or your ability to perform your duties objectively.

Employees with a conflict of interest question should seek advice from management. Before engaging in any activity, transaction or relationship that might give rise to a conflict of interest, employees should seek advice from management. Examples of potential conflicts of interest include, but are not limited to, the following:

A.   Employment/Outside Employment

In consideration of their employment with the Company, employees are expected to devote their full attention to the business interests of the Company. Employees are prohibited from engaging in any activity that interferes with their performance or responsibilities to the Company or is otherwise in conflict with or prejudicial to the Company. Our policies prohibit any employee from working for a client, credit source, supplier, or competitor, or from taking part in any activity that enhances or supports a competitor’s position, while employed by the Company. If you have any questions regarding this requirement, you should contact the Ethics Officer.

B.    Outside Directorships

It is a conflict of interest to serve as a director of any company that competes with the Company. Employees may not serve as a director of another company without first obtaining the approval of an authorized representative of the Company or the applicable subsidiary or controlled affiliate.

C.   Business Interests

If you are considering investing in a client, credit source, supplier or competitor, great care must be taken to ensure that these investments do not compromise your responsibilities to the Company. Many factors should be considered in determining whether a conflict exists, including the size and nature of the investment; your ability to influence the Company’s decisions; your access to confidential information of the Company or of the other company; and the nature of the relationship between the Company and the other company. Employees should not conduct any private business activities or make any personal investments that appear to, or may actually, inhibit their ability to carry out their assigned responsibilities fairly and objectively in the best interests of the Company.

D.   Related Parties

Employees should not conduct business or engage in a transaction on behalf of the Company with a family member or significant other, or with a company or firm with which you or a family member or significant other is an owner or associated or employed in a significant role or position, without disclosing the relationship and obtaining approval from the Ethics Officer. “Family members” include any person related by blood, adoption or marriage, including grandparents, parents, children, aunts, uncles, nieces, nephews, cousins, stepchildren, stepparents, step siblings and in-laws. “Significant others” include co- habitants, domestic partners, and persons with whom an employee has a dating relationship.

Conflicts of interest may not always be clear-cut; if questions arise, you should consult with the Ethics Officer before entering into, developing or continuing a transaction that could reasonably be expected to give rise to a conflict of interest. Transparency through full disclosure will go a long way to avoid a conflict of interest or the appearance of a conflict.

E.    Corporate Opportunities

Employees, officers and directors are prohibited from exploiting for their own personal gain opportunities that are discovered through the use of corporate property, information or their position unless the opportunity is fully disclosed to the Board and the Board declines to pursue such opportunity. No employee, officer or director may use corporate property, information, electronic resources or position for improper personal gain, and no employee may compete with the Company directly or indirectly. Never reveal confidential material to anyone outside the company without clear approval. Even within the Company, do not share confidential material with people who do not have a business “need to know.” Employees, officers and directors owe a duty to the Company to advance the Company’s legitimate interest when the opportunity to do so arises.

  1. Business Entertainment, Meals & Gifts

The purpose of business entertainment, meals, and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift, meal, or entertainment should ever be offered, given, provided or accepted by any Company employee, officer, director, family member of any of the foregoing or agent unless it:

  • is not a cash gift or cash equivalent,
  • is consistent with customary business practices,
  • is not excessive in value,
  • is not illegal or of a nature that public disclosure would embarrass or reflect negatively on the Company or the employee,
  • cannot be construed as a bribe or payoff and does not create an appearance of impropriety or unfair or unlawful business inducements, and
  • is in compliance with the Company’s policy on gifts and gratuities and does not violate any laws or rules or regulations.

Please discuss with your Human Resources representative any gifts or proposed gifts which you are not certain are appropriate.

G.   Other Situations

Because other conflicts of interest may arise, it would be impractical to attempt to list all possible situations. Any employee, officer or director who becomes aware of a conflict of interest or a potential conflict of interest should bring it to the attention of a supervisor, manager or the Ethics Officer or comply with the guidelines described in Section XVI of this Code.

III.      Money Laundering

The Company will not be a party to any agreement or action which violates the money laundering laws of the U.S. or of any country where our suppliers or customers conduct business. Where questionable financial transactions involving transfer of cash or cash equivalents are sought, prior review and approval by the Company’s CFO is required.

IV.       Insider Trading

Employees may have access to material, nonpublic information about a third party such as a customer, supplier or business partner, which, if disclosed, could impact the value of publicly traded securities. Employees are prohibited by law from disclosing such “inside information.” It cannot be shared with the media, financial analysts, competitors or any other third parties, including family and friends. Violation of the insider trading laws may result in criminal and civil liability. When in doubt about whether information has been publicly released, you should contact the CFO.

V.        Hiring and Employment Practices

The Company is dedicated to maintaining a diverse, inclusive culture with equal opportunities for all applicants and employees, consistent with all applicable federal and state laws governing discrimination, retaliation, hours worked, benefits, overtime, and child labor. If you have any concerns regarding hiring and employment practices, please review the Company’s “Affirmative Action Policy Statement” and “Equal Employment Opportunity Statement” at the Company’s intranet.

  1. Human Trafficking

Consistent with the Company’s hiring and employment practices as described above, the company supports, and complies with, all laws prohibiting human trafficking and maintains a zero tolerance policy against human trafficking, both internally with respect to employees (full-time, part-time, seasonal, temporary, and otherwise) and with respect to any contractor, supplier, distributor, vendor, temporary agency, or other third party that furnishes or supplies products or services.

For the purpose of this policy, human trafficking includes, without limitation, recruiting, harboring, transporting, providing, or obtaining a person for labor or services through the use of force, coercion, fraud or deception, the abuse of power or of a position of vulnerability, or the giving or receiving of payments or benefits to achieve the consent of a person having control over another person for the purpose of exploitation. Exploitation includes, without limitation, involuntary servitude, peonage, debt bondage or slavery, the removal of organs, and sex trafficking or other forms of exploitation.

Any violation of this policy, including engaging in prohibited activities or failing to report potentially prohibited activities, will result in disciplinary action, up to and including termination of employment, for employees. In addition, employees involved in human trafficking may also be reported to the appropriate authorities and subject to criminal prosecution under applicable law. Similarly, any violation of this policy, including engaging in prohibited activities or failing to report potentially prohibited activities, will result in termination with cause of any contract or agreement with any contractor. In addition, contractors, suppliers or their employees who are involved in human trafficking may also be reported to the appropriate authorities and subject to criminal prosecution under applicable law.

See Section XIV of this Code regarding reporting any Illegal or Unethical Behavior and applicable prohibitions against retaliation or discrimination, which apply to this section with respect to employees and outside third parties who will be subject to termination for cause and reporting to authorities as appropriate due to any violation.

VII.     Health, Safety, and Environment

The Company is dedicated to maintaining a healthy environment consistent with all applicable federal Occupational Safety and Health Administration (“OSHA”) and comparable state law requirements. If you have any safety concerns, please review the Company’s “EHS & PC Compliance Document” at the Company’s intranet.

The Company also strives to operate in compliance with all environmental laws and regulations. All employees, directors, and officers shall fully comply with any regulatory requirements including work practice standards assuring environmental protection.

Violence, threats of violence and intimidating behavior are strictly prohibited by the Company. Employees who observe or suspect such conduct must immediately report it to their supervisor, the Human Resources Department or any member of management.

The Company also prohibits the use of illegal drugs or consumption of alcohol in the workplace or during working hours. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use or abuse of prescription drugs that impairs an employee’s ability to safely perform their duties or poses a direct threat to the safety of other employees also is prohibited.

VIII.   Recordkeeping and Reporting

We create, retain, and dispose of our company records as part of our normal course of business in compliance with all applicable recordkeeping and record retention policies and guidelines, as well as all applicable federal, state, and local regulatory and legal requirements as well as industry-specific requirements.

All corporate records must be true, accurate and complete, and company data must be promptly and accurately entered in our books in accordance with the Company’s and other applicable accounting principles. Employees, directors, and officers must not improperly influence, manipulate or mislead any unauthorized audit, nor interfere with any auditor engaged to perform an internal independent audit of the Company’s books, records, processes or internal controls.

 

            No record or document shall be destroyed which is the subject of a subpoena or other legal process or if there is a reasonable belief that litigation proceedings or government investigative proceedings are likely to occur and it is anticipated that such record or document is relevant to such proceedings.

 

Employees, directors, and officers shall at all times provide truthful and factual statements in submissions to governmental entities and shall, at no time, knowingly provide false information. The Company expects employees, officers and directors to advise the Ethics Officer of any potential issue that may threaten compliance with any Regulatory requirements. However, nothing herein limits any employee’s ability to file a charge or complaint with the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (government agencies). Nor does any provision of this Code limit any employee’s ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or other information. Employees are not required to contact the Company regarding the subject matter of any such communications before they engage in such communications. However, employees cannot at any time disclose to anyone confidential communications and documents that are protected by the Company’s attorney-client privilege.

IX.       Media Inquiries

            From time to time employees may be approached by reporters and other members of the media. In order to ensure that we speak with one voice and provide accurate information about the company, all media inquiries should be handled consistent with the Company’s “Media Inquiries” policy located at the Company’s intranet.

X.        Confidentiality & Privacy

Employees, officers, and directors must maintain the confidentiality of confidential and proprietary information entrusted to them by the Company or its customers and other business partners, except when disclosure is authorized by the CEO, a division President, or the CFO, or is required by applicable law. Confidential and proprietary information includes all non-public information that might be of use to competitors, or harmful to the Company, its customers, suppliers, shareholders, employees and/or its other business partners and third-parties if disclosed. It also includes information that suppliers, customers and other business partners and third-parties have entrusted to us. The obligation to preserve confidential and proprietary information continues even after employment ends.

The Company and its employees, agents, consultants, and contractors must cooperate with appropriate government inquiries and investigations. In this context, however, it is important to protect the legal rights of the Company with respect to its privileged information. It is also important that all employees cooperate with any government inquiry. However, only persons who have been specifically assigned the responsibility of public communications on behalf of the Company may do so. No financial information may be disclosed without the prior approval of the CEO, a division President, or CFO, except as required by law.

The Company is committed to protecting employee privacy by maintaining the confidentiality of employee personal information. Access to personal records is restricted to employees and agents who have a business need for that information. Confidential employee information should never be shared outside the Company without proper authorization. Any employee who has reason to believe that there has been an unauthorized disclosure of employee personal information should contact the Human Resources Department immediately.

However, employees should not expect privacy with respect to their conduct and/or communications in the workplace. The Company reserves the right, subject to any legal restrictions, to access, retrieve, monitor and review all communications, records and information created at work or using Company resources, including all computers, smart phones and other electronic devices. The Company also reserves the right to inspect the contents of all, offices, desks, workstations and property brought onto any Company sites, consistent with applicable laws.

XI.       Protection and Proper Use of Company Assets

All employees, officers and directors are expected to protect the Company’s property, electronic communications systems, information resources, facilities and equipment and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company’s profitability. Employees must protect electronic resources from illicit uses and security threats. Any suspected incident of fraud or theft should be immediately reported for investigation pursuant to Section XVI of this Code. Company assets should be used primarily for business purposes. Incidental personal use of the Company’s communication systems is permitted where it does not adversely affect the interests of the Company or interfere with job performance. You should not use the Company’s communication systems for private, confidential matters. Personal use of Company assets must always be in accordance with Company policy. You should consult your Human Resources representative for appropriate guidance and permission.

Unauthorized duplication of copyrighted documents or computer software violates the law. You must neither engage in nor tolerate the making or using of unauthorized documents or software copies and must comply will all license and purchase terms regulating the use of any document or software. The Company will provide all documents and software needed to meet legitimate needs.

XII.     Competition and Fair Dealing

We are dedicated to ethical, fair and vigorous competition based on our merit, superior quality, functionality, and competitive pricing. We will make independent pricing and marketing decisions and will not improperly cooperate or coordinate our activities with our competitors. We will not offer or solicit improper payments or gratuities in connection with the purchase of goods or services for the Company or the sale of our products or services.

            We should never engage in unethical or illegal business practices. Stealing confidential and proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Never accept or use material that you know or suspect has been illicitly or unfairly obtained. Each employee, officer, and director should endeavor to respect the rights of and deal fairly with the Company’s customers, suppliers, consultants, competitors and employees. No employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

All employees are required to strictly comply with all applicable antitrust laws. Employees, therefore, are prohibited from entering into any discussions, formal or informal agreements or understandings with competitors regarding any aspect of the Company’s business, including pricing, costs, salaries, terms of sale, market share, bidding or methods of distribution. Where contact with competitors serves a legitimate, business purpose, such as, in connection with a trade association meeting, discussions of joint ventures and the like, consult with the Chief Financial Officer of STM Industries, Inc. (“CFO”) in advance regarding legal restrictions which must be observed.

Employees are prohibited from using customers or other third parties as “proxies” for communicating information with competitors, and from attempting to restrict the freedom of any customers to set their own price for resale of any Company product. All proposals for requirement contracts or tying arrangements must be approved in advance by the CFO.

XIII.   Payments to Government Personnel

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to, or to attempt to, obtain or retain business or to gain competitive advantages. It is strictly prohibited to make illegal payments to government officials of any country.

In addition, there are a number of federal and state laws and regulations regarding business gratuities, which may be accepted by federal or state government personnel. The promise, offer or delivery to an official or employee of the U.S. government or a state government of a gift, favor or other gratuity in violation of these rules not only violates Company policy but could also be a criminal offense. Local governments, as well as foreign governments, may have similar rules. You must consult with the Ethics Officer prior to offering or giving anything of value to a federal or state government employee or official.

XIV.    Reporting any Illegal or Unethical Behavior; No Retaliation or Discrimination

It is your obligation and ethical responsibility to help enforce this Code, and to that end, you should promptly report any actual or suspected violations of this Code in accordance with the guidelines set forth in Section XVI of this Code. Employees, officers and directors are required to report to supervisors, managers, Human Resources business leaders, or the Ethics Officer any observed or suspected illegal, improper or unethical behavior. Alternatively, you may report any violation of this Code anonymously through the EthicsPoint website, www.shurtape.ethicspoint.com, or telephonically. Please review Attachment A for country specific telephone numbers. Employees, officers and directors also are encouraged to ask questions from these same resources when in doubt or if they do not know the best course of action.

The Company strictly prohibits retaliation or discrimination by other employees and any outside party against any person who has in good faith reported an actual or a suspected violation of law, this Code, or other Company policies, or who has cooperated or assisted in any investigation or process with respect to such a violation because of the person’s cooperation or assistance. Such retaliation is a violation of Company policy and will be subject to disciplinary action, up to and including termination of employment, and is subject to reporting to authorities for violations of state and/or federal civil and/or criminal laws. Employees, officers and directors are expected to cooperate in internal investigations of wrongdoing or misconduct.

XV.     Accounting Complaints

The Company’s policy is to comply with all applicable generally accepted accounting principles (“GAAP”), tax laws, and statutory financial reporting or similar requirements in effect in jurisdictions where the Company does business or is otherwise subject to local GAAP, tax laws, or statutory reporting requirements. If any employee, officer or director of the Company has concerns or complaints regarding questionable accounting, internal control or financial or statutory reporting matters of the Company, he or she is required to submit those concerns or complaints to the Ethics Officer or through the EthicsPoint website www.shurtape.ethicspoint.com. Please review Attachment A for country specific telephone numbers.

XVI.    Compliance Procedures

We must all work to ensure prompt and consistent action against violations of law, this Code or the Company’s policies. However, in some situations it is difficult to know right from wrong. Since we cannot anticipate every situation that will arise, you should keep in mind the following steps as you consider a particular problem or concern.

  • Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible. Ask yourself: What specifically am I being asked to do or ignore? Does it seem illegal, unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it may very well be.
  • Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss your concerns.
  • You are required to report violations of this Code to or otherwise discuss your concerns in this regard with your supervisor, your Human Resources business leader, the Ethics Officer, or anonymously through the EthicsPoint website atshurtape.ethicspoint.com, or telephonically. Please review Attachment A for country specific telephone numbers.
  • If submitted anonymously via EthicsPoint or telephonically, your report will be sent to the Ethics Officer on a no-name basis unless you grant permission for your identity to be revealed. Reports of violations of this Code or other complaints made to the EthicsPoint website or Hotline, will be reviewed by the Ethics Officer or his designee, who shall either (i) conduct an investigation of the facts and circumstances as deemed appropriate and report their conclusions and remedial actions taken, if any, to the Board or (ii) report the alleged violation or other complaint to the Board for further direction.
  • Your communications of violations or concerns will be kept confidential to the extent feasible and appropriate, and except as required by law.
  • All reports of violations of the Code will be promptly investigated and addressed. If you are not satisfied with the response, you may contact the Ethics Officer directly.
  • Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.

XVII.  Compliance Required

The matters covered in this Code are of the utmost importance to the Company and its business partners, and are essential to the Company’s ability to conduct its business in accordance with its stated values. We expect all of our employees, officers, directors, agents, contractors, consultants and representatives to adhere to these rules in carrying out their duties for the company and to act ethically and honestly.

Any individual whose actions are found to violate these policies or any other policies of the Company will be subject to disciplinary action, up to and including immediate termination of employment or business relationship. The Company can be held accountable for the misconduct of others acting on its behalf; where the Company has suffered a loss, it may pursue its legal remedies against the individuals or entities responsible.

XVIII. Administration

No code, including this one, can cover all situations. Sometimes, there are no written rules, and employees must use good judgment to make ethical decisions. Similarly, exceptional circumstances may occur which do not fit neatly within the guidelines of this Code or where strict application of this Code may not produce a fair result. In those circumstances, employees should seek assistance from their supervisors, Human Resources, the Ethics Officer or via the EthicsPoint website or Hotline. The Board has full authority and discretion to administer, interpret and amend this Code.