STM INDUSTRIES, INC. CODE OF BUSINESS CONDUCT AND ETHICS
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 subsidiaries and controlled affiliates, including Shurtape Technologies, LLC, and ShurTech Brands, LLC (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.
1. Compliance with Laws, Rules and Regulations
Obeying the law 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 respect and obey the laws of the cities, states and countries in which we operate and the rules and regulations applicable to the Company’s business, 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.
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.
2. Conflicts of Interest
A “conflict of interest” exists when a person’s personal private interest interferes in any way – 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. 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. Examples include 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 the Chief Executive Officer (the “CEO”) of STM Industries, Inc.
(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) 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 16 of this Code.
3. 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.
4. Competition and Fair Dealing
We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance and products, never through unethical or illegal business practices. Stealing 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.
5. Business Entertainment & Gifts
The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift 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 the Company or the employee,
- cannot be construed as a bribe or payoff and does not create an appearance of impropriety, 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.
6. 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.
7. 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.
8. Hiring and Employment Practices
(a) Discrimination and Harassment
The diversity of the Company’s employees is a tremendous asset. It is the Company’s policy to provide equal employment opportunity for all applicants and employees. The Company is committed to compliance with all federal, state and local laws that prohibit employment discrimination on the basis of race, color, religion, national origin, sexual orientation, gender (including pregnancy, childbirth, or related medical conditions), age, disability, marital status, veteran status, or any other legally protected basis. This policy applies to all employment decisions, including hiring, compensation, training, advancement, disciplinary actions and termination. In addition, the Company is committed to providing a workplace free of unlawful harassment. Harassment includes unwelcome conduct toward an individual that creates an intimidating or hostile work setting and/or interferes with an individual’s work performance. This includes not only sexual harassment, but also harassment on any of the legally protected bases set forth above.
The Company strongly disapproves of and will not tolerate any physical, sexual, psychological or verbal harassment of employees by managers, supervisors, co-workers or non-employees based on any legally protected basis. Similarly, the Company will not tolerate harassment by its employees of non-employees with whom Company employees have a business, service, or professional relationship. Harassment will not be tolerated at work or at work events. For information about the Company’s policies against discrimination and harassment, please refer to the Company’s Employee Handbook or Employment Policies. All of our employees deserve a positive work environment where they will be respected and we are committed to providing an environment that supports honesty, integrity, respect, trust and responsibility. All of our employees should contribute to the creation and maintenance of such an environment and our executive officers and management and supervisory personnel should take a leadership role in achieving a work environment that meets our diversity standards and is free from the fear of retribution.
(b) Child/Forced Labor
Child, underage, slave, forced, bonded, indentured labor or other forms of forced labor will not be tolerated by the Company, nor will the Company knowingly contract with suppliers who engage in such practices.
No person shall be employed who is not of legal age and who can demonstrate legal status to work in the country of hiring. In no case, regardless of local law or custom, will any individual be employed who is not at least 18 years of age or under the age for completion of compulsory education, whichever is higher.
(c) Freedom of Association
The Company strives to create an environment of mutual interest where individual employees can engage directly with management in resolving issues associated with their employment; however, the Company also recognizes that issues involving union representation must be resolved within the framework of the applicable law, and where collective representation exists, the Company will strive to build a relationship based on the principles of good fair and mutual respect.
(d) Wages, Benefits and Hours of Work
Wages are essential to meeting our employees’ basic needs. All of our operations will pay employees in compliance with local wage and hour laws, to include, but not limited to, provisions for the payment of overtime work. The Company strives to pay employees and provide benefits that are competitive and fair in the appropriate labor market, but in no case will the Company pay less than the local applicable minimum wage or prevailing wage; nor provide less than the legally mandated benefits.
Working hours must be consistent with the laws of the states and countries in which we operate and not excessive, but in no case will the regularly scheduled workweek exceed 48 hours. Other than exceptional circumstances, employees can expect to have at least 24 consecutive hours of rest in a seven day work period.
9. Health, Safety, and Environment
The Company strives to provide each employee with a safe and healthy work environment that mitigates both the risk of injury and any negative impacts the Company’s operations have on the environment.
The Company strives to conduct all operations 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. Each employee has a responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.
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.
10. Record-Keeping and Reporting
The purpose of this policy is to set forth and convey the Company’s requirements in managing records, including all recorded information regardless of medium or characteristics. Records include paper and electronic documents, including, but not limited to, CDs, DVDs, email, computer hard disks, texts, voice mail messages, instant messages, recordings, videos, floppy disks, microfiche, microfilm, flash drives and all other media. The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.
Many employees, officers and directors regularly incur business expenses, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or contact the Company’s VP Finance. Please refer to the Company’s business travel policy for further information regarding business expenses.
All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls and generally accepted accounting practices and principles. No one should misrepresent facts or falsifying records. Unrecorded or “off the books” funds, assets, liabilities, investments or other financial or business activities should not be maintained unless permitted by applicable law or regulation.
Business records and communications often become public, and we should avoid exaggeration, defamatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos, and formal reports. Records should always be retained or destroyed according to the Company’s record retention policies. 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. All employees are expected to comply with all federal, state and industry-specific record retention rules and requirements as well as the Company’s record retention policies.
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.
Nothing contained in this Code 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.
11. Confidentiality & Privacy
Employees, officers and directors must maintain the confidentiality of confidential and proprietary information entrusted to them by the Company or its customers, except when disclosure is authorized by the CEO, a division President or the CFO or is required by laws or regulations. Confidential 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.
12. 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 16 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.
The obligation of employees, officers and directors to protect the Company’s assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use, disclosure or distribution of this information violates Company policy. It could also be illegal and result in civil or even criminal penalties.
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.
13. 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.
14. Reporting any Illegal or Unethical Behavior; No Retaliation
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 16 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 Ethics Hotline at 1-855-267-8369. 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 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 assisted in any investigation or process with respect to such a violation because of the person’s assistance. Such retaliation is both a violation of Company policy and is prohibited by a variety of state and federal civil and criminal laws. Employees, officers and directors are expected to cooperate in internal investigations of wrongdoing or misconduct.
15. 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 Ethics Hotline at 1-855-267-8369.
16. 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.
(a) 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.
(b) 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.
(c) You are required to report violations of this Code to or otherwise discuss your concerns in this regard with your supervisor or your Human Resources business leader, the Ethics Officer or anonymously through the Ethics Hotline at 1-855-267-8369. In many cases, your supervisor will be more knowledgeable about the question or concern, and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems. Supervisors and Human Resources business partners are obligated to report violations of this Code to the Ethics Officer.
(d) In the case where it may not be appropriate to report a violation to or discuss your concerns with your supervisor or your Human Resources business partner, or where you do not feel comfortable approaching your supervisor to report a violation or discuss your concerns, you may report the violation or discuss your concerns anonymously through the Ethics Hotline at 1-855-267-8369. If you prefer to report violations or your concerns in writing, on an anonymous basis, please address your concerns to our Ethics Officer at the following address: Shurtape Technologies, LLC, PO Box 1530, Hickory, NC 28603 Attention: Gary C. Garvey.
(e) You may also report any violations of this Code on an anonymous and confidential basis by calling the Ethics Hotline at 1-855-267-8369. Your report will be sent to the Ethics Officer on a no-name basis unless you grant permission for your identity to be revealed.
(f) Reports of violations of this Code or other complaints made to the Ethics Hotline or to the persons referenced above 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.
(g) Your communications of violations or concerns will be kept confidential to the extent feasible and appropriate, and except as required by law.
(h) 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.
(i) Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.
17. 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.
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 Ethics Hotline. The Board has full authority and discretion to administer, interpret and amend this Code.
ACKNOWLEDGMENT OF RECEIPT OF STM INDUSTRIES, LLC. CODE OF BUSINESS CONDUCT AND ETHICS
I have received and read the Company’s Code of Business Conduct and Ethics (the “Code”) I understand that I am required to become familiar with the Code. I understand the standards and policies contained in the Code and understand that there may be additional policies or laws specific to my position as an employee, officer or director of the Company. I further agree to comply with the Code.
If I have questions concerning the meaning or application of the Code, any Company policies, or the legal and regulatory requirements applicable to my position, I know I can consult with my supervisor, my Human Resources representative, the Ethics Officer or the Ethics Hotline at 1-855-267-8369, knowing that my questions or reports to these sources will be maintained in confidence to the extent feasible and appropriate.
Last Updated: April 26, 2017