CODE OF BUSINESS CONDUCT AND ETHICS
I. GENERAL POLICY STATEMENT
It is the policy of Ultra Electronics – 3e Technologies International Inc. ("the Company"), to conduct its business in accordance with the highest ethical standards in order to merit and maintain the complete confidence and trust of customers, suppliers, and the public in general.
We expect every 3eTI employee to read and understand the Code and its application to the
performance of his or her business responsibilities. Every employee must conduct their personal affairs and maintain their and business affairs in a manner which does not result in adverse or negative comments, criticisms, or actions by or from customers, suppliers, or the general public.
Because the principles described in this Code are general in nature, you must also review all applicable Company Business Processes and Ultra Corporate Policies for more specific instruction. Applicable Ultra Corporate Policies and Company Business Processes are referenced throughout this Code and available for employee review on the Company intranet homepage. Contact your supervisor, the Human Resources Department ("HR"), or the Legal Department if you have any questions, or concerns about this Code, any Ultra Corporate Policy or any Company Business Process:
Business Process Forms
The Company is committed to regularly reviewing and updating the Company Business Processes. This Code itself is subject to modification. This Code supersedes all other codes, policies, procedures, instructions, practices, rules or written or verbal representations to the extent they are inconsistent with the contents of this Code.
A. Compliance with Laws and Regulation
Ethical business conduct is critical to our business. It is our policy to fully comply with the spirit and intent of all applicable laws, rules and regulations. Violations of these laws, rules and regulations can create significant civil and/or criminal liability for you, the Company, other Company employees and other Ultra subsidiaries. We expect you to use good judgment and high ethical standards and to refrain from any form of illegal, dishonest, or unethical conduct.
While we do not expect you to memorize every detail of applicable laws, rules and regulations, we want you to be able to determine when to seek advice from others. If you do have any question, it is important that you not hesitate to seek answers from your supervisor, HR, or the Legal Department. Disregard of the law will not be tolerated. You should be aware that conduct and records, including emails, are subject to internal and external audits, and to discovery by third parties in the event of a government investigation, civil litigation, or criminal proceedings.
B. Administration of the Code
It is your responsibility to be familiar with the Code. Supervisors are expected to make every reasonable effort to ensure that their subordinate staff continues to comply with the provisions of the Code. Senior management shall administer the Code, determine matters of interpretation, and coordinate periodic changes to the Code. The continued implementation of the Code shall be accomplished by audit, examination and personnel procedures.
You will be required to sign a written acknowledgment of receipt of a copy of the Code and of any subsequent changes thereto and return the form to HR indicating that you have received, read, understand and agree to comply with the Code. The signed acknowledgment form will be kept in your personnel file.
Part of your job and ethical responsibility is to help enforce this Code. You should be alert to possible violations and report possible violations to your supervisor, HR or the Legal Department in accordance with Section VII. You must cooperate in any internal or external investigations of possible violations. Reprisal, threats, retribution or retaliation against any person who has in good faith reported a violation or a suspected violation of law, this Code or other Company policies, or against any person who is assisting in any investigation or process with respect to such a violation, is strictly prohibited.
Violations of law, this Code or other Company policies or procedures by staff members can lead to disciplinary action up to and including termination.
In trying to determine whether any given action is appropriate, use the following test. Imagine that the words you are using or the actions you are taking are going to be fully disclosed in the media with all the details, including your photo. If you are uncomfortable with the idea of this information being made public, perhaps you should think again about your words or your course of action.
In all cases, if you are unsure about the appropriateness of an event or action, please seek assistance by contacting your supervisor, HR, or the Legal Department.
II. CONFLICTS OF INTEREST
Each of us has a responsibility to the Company and to each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where a conflict of interest might occur or appear to occur.
It is our policy that employees must not engage in personal conduct which will conflict with the interest of the Company. It is important to avoid even the appearance of a conflict of interest, since the appearance can be as damaging to our reputation as an actual conflict. Whether or not a conflict of interest exists or will exist can be unclear. Conflicts of interest are prohibited unless specifically authorized as described below.
If you have any questions about a potential conflict or if you become aware of an actual or potential conflict and you are not an officer or director of the Company, you should discuss the matter with your supervisor or the Legal Department as further described in Section VII. Supervisors may not authorize conflict of interest matters without first seeking the approval of the Legal Department by filing a written description of the activity. If the supervisor is involved in the potential or actual conflict, you should discuss the matter directly with the Legal Department. Factors that may be considered in evaluating a potential conflict of interest are, among others:
- whether it may interfere with the individual’s job performance, responsibilities or morale;
- whether the individual has access to confidential information;
- whether it may interfere with the job performance, responsibilities or morale of others within the organization;
- any potential adverse or beneficial impact on our business; or on our relationships with our customers, suppliers or other service providers;
- whether it would enhance or support a competitor’s position;
- the extent to which it would result in financial or other benefit (direct or indirect) to the individual;
- the extent to which it would result in financial or other benefit (direct or indirect) to one of our customers, suppliers or other service providers; and
- the extent to which it would appear improper to an outside observer.
B. Gifts and Entertainment
Reference Ultra Corporate Policy: Gifts and Corporate Hospitality.
B.1 Offering Gifts
You are allowed to offer modest non-cash gifts to business partners where appropriate for marketing purposes or, as long as the gift is occasional and not regular or repeated, other purposes such as expressing thanks or making a goodwill gesture. For example, we may offer promotional material such as pens, calendars etc for marketing purposes or send a small token gift to a business partner as a Holiday gift.
If you want to offer a gift worth more than $25.00 you must obtain prior approval from your supervisor, the VP of Finance And Administration or the President who will decide if the proposed gift is legitimate, proportionate and reasonable. You should never offer:
- cash gifts;
- any sort of gift where the intention is to influence the recipient’s judgment;
- any sort of gift where you know that the recipient is not allowed to receive it.
B.2 Accepting Gifts
You are allowed to accept token gifts from business partners or potential business partners where this constitutes legitimate and reasonable marketing or where it is a legitimate goodwill gesture. For example, you can accept promotional items such as desk calendars or pens or occasional gestures such as a bunch of flowers from a customer to express thanks or offer congratulations. You should never accept:
- cash gifts; or
- gifts which are extravagant/out of proportion with the value of the business relationship; or
- repeated/regular gifts from the same donor; or
- any sort of gift where your judgment might reasonably be thought to be at risk of influence as a result of the gift (for example, a gift from a potential business partner shortly before you make a decision over whether or not to award them a contract); or
- any sort of gift which might reasonably bring the business into disrepute or be contrary to terms or the spirit of our equal opportunities/dignity at work policy.
Be aware that a ‘gift’ includes food, drink and other corporate hospitality if the host is not present. For example, if you are invited to attend a major sporting event by one of our suppliers but the supplier will not be present, then the tickets are a gift.
If you are offered a gift in circumstances which make you concerned or uncomfortable then you should raise this with your supervisor. It is our policy and your responsibility to act ethically at all times.
If any unauthorized gift is offered to you then you should decline it politely explaining that our policy does not permit you to accept it, unless to do so would be embarrassing or insulting (for example because the gift is offered in public) in which case you should accept the gift and then refer the situation to your supervisor. The Company is likely to write to the donor of the gift explaining our policy and returning the item.
A gift to a close relative of an employee is also treated as a gift to the employee. If you have any questions concerning whether an offer or gift violates this policy, you should discuss it with HR or the Legal Department.
B.3 Corporate Hospitality and Entertainment
Our policy is to participate in corporate hospitality and entertainment where this will promote good relationships with our business partners. For example, entertaining business partners at social events during major trade shows is likely acceptable. In addition, working lunches with business partners are appropriate, as long as they are in line with the expenses policy of our customers and suppliers
However, corporate hospitality and entertainment, including attendance at dinners or events, should not be offered or accepted if:
- the estimated value per person exceeds $400; or
- it is lavish or extravagant; or on a scale which is disproportionate to the legitimate business value of the relationship; or
- you are offering it with the intention of influencing the recipient’s judgment or when you know they are not permitted to accept it; or
- you are offered it in circumstances when acceptance would influence your business judgment or put you in a difficult position; or
- if it would infringe our expenses policy; or
- if it might reasonably bring the business into disrepute or contravene the terms or the spirit of our equal opportunities/dignity at work policy.
If you unsure as to whether a particular invitation is appropriate, you should seek guidance from HR or the Legal Department.
C. Political Contributions
It is our policy to strictly comply with all applicable federal and state political campaign laws.
D. Outside Activities
We discourage staff members from holding outside employment. In those instances where it is justified, written approval from HR is required. No outside employment or activity will be approved which might subject us to criticism or which will impact an employee’s productivity.
E. Related Parties
As a general rule, you should avoid conducting Company business with a relative or significant other, or with a business in which a relative or significant other is associated in any significant role. Relatives include spouse, sister, brother, daughter, son, mother, father, grandparents, aunts, uncles, nieces, nephews, cousins, step relationships and in-laws. Significant others include persons living in a spousal or familial fashion with you.
If such a related party transaction is unavoidable, you must fully disclose the nature of the related party transaction to the Company’s VP of Finance and Administration who will review and approve (or disapprove), in writing, in advance of such related party transaction. The most significant related party transactions, particularly those involving the Company’s senior managers must be reviewed and approved in writing in advance by the Company President. The Company must report all such material related party transactions to its Ultra Parent. Any dealings with a related party must be conducted in such a way that no preferential treatment is given to this business.
The Company prohibits the employment of relatives and significant others in positions or assignments that have a financial dependence or influence (e.g. , an auditing or control relationship, or a supervisor/subordinate relationship). The purpose of this policy is to prevent the organizational impairment and conflicts that are a likely outcome of the employment of relatives or significant others, especially in a supervisor/subordinate relationship. If a question arises about
whether a relationship is covered by this policy, HR is responsible for determining whether an applicant’s or transferee’s acknowledged relationship is covered by this policy. HR shall advise all affected applicants and transferees of this policy. Willful withholding of information regarding a prohibited relationship/reporting arrangement may be subject to corrective action, up to and including termination. If a prohibited relationship exists or develops between two employees, the employee in the senior position must bring this to the attention of his/her supervisor. The Company retains a prerogative to separate the individuals at the earliest possible time, either by reassignment or by termination, if necessary.
III. OBLIGATIONS UNDER SECURITIES LAWS – "INSIDER" TRADING
Directors and staff members who have access to confidential (or "inside") information are not permitted to use or share that information for stock trading purposes or for any other purpose except to conduct our business. All non-public information about the Company or about companies with which we do business is considered confidential information. To use material non-public information in connection with buying or selling securities, including "tipping" others who might make an investment decision on the basis of this information, is not only unethical, it is illegal. You must exercise the utmost care when handling material inside information.
Ultra Electronics securities are not traded on the U.S. Stock Exchange but it is a publicly traded company on the London Stock Exchange and subject to the U.K. Financial Services and Markets Act 2000 ("FSMA") which strictly prohibits "insider" trading.
Reference: Ultra Guide to Regulatory Financial Insider Dealing Rules
IV. MAINTAINING AND MANAGING RECORDS
The Company is required to maintain business records for prescribed periods of time in accordance with local law and regulation and contract requirements, including all recorded information regardless of medium or characteristics. Records include paper documents, CDs, computer hard disks, email, floppy disks, microfiche, microfilm or all other media. We are required by local, state, federal, foreign and other applicable laws, rules and regulations to retain certain records and to follow specific guidelines in managing its records. Civil and criminal penalties for failure to comply with such guidelines can be severe for the Company and its employees. Failure to comply with such guidelines may subject the Company and employees to disciplinary action, up to and including termination of employment or business relationship at the Company’s sole discretion.
Reference: Ultra Corporate Policy: Document Retention Guideline
B. Records on Legal Hold
A legal hold suspends all document destruction procedures in order to preserve appropriate records under special circumstances, such as litigation or government investigations. Legal
Counsel determines and identifies what types of Company records or documents are required to be placed under a legal hold. Every Company employee must comply with this policy. Failure to comply may subject the employee to disciplinary action, up to and including termination of employment at the Company’s sole discretion. Failure to comply with legal hold requirements can also expose an employee to potential criminal prosecution.
The Legal Department will notify you if a legal hold is placed on records for which you are responsible. You then must preserve and protect the necessary records in accordance with instructions from the Legal Department. RECORDS OR SUPPORTING DOCUMENTS THAT HAVE BEEN PLACED UNDER A LEGAL HOLD MUST NOT BE DESTROYED, ALTERED OR MODIFIED UNDER ANY CIRCUMSTANCES. A legal hold remains effective until it is officially released in writing by the Legal Department. If you are unsure whether a document has been placed under a legal hold, you should preserve and protect that document while you check with the Legal Department.
C. Document Integrity
The integrity of our records and public disclosure depends on the validity, accuracy and completeness of the information supporting the entries to our books of account. Therefore, our corporate and business records must be completed accurately and honestly. The making of false or misleading entries, whether they relate to financial results or test results, is strictly prohibited. Our records serve as a basis for managing our business and are important in meeting our obligations to
customers, suppliers, creditors, employees and others with whom we do business. As a result, it is important that our books, records and accounts accurately and fairly reflect, in reasonable detail, our assets, liabilities, revenues, costs and expenses, as well as all transactions and changes in assets and liabilities. We require that:
- no entry be made in our books and records that intentionally hides or disguises the nature of any transaction or of any of our liabilities, or misclassifies any transactions as to accounts or accounting periods;
- transactions be supported by appropriate documentation;
- the terms of sales and other commercial transactions be reflected accurately in the documentation for those transactions and all such documentation be reflected accurately in our books and records;
- employees comply with our system of internal controls; and
- no cash or other assets be maintained for any purpose in any unrecorded or "off-the-books" fund.
Our accounting records are also relied upon to produce reports for our management and creditors, as well as for governmental agencies. In particular, we rely upon our accounting and other business and corporate records in preparing the periodic and current reports that we file financial authorities. These reports must provide full, fair, accurate, timely and understandable disclosure and fairly present our financial condition and results of operations. Employees who collect, provide or analyze information for or otherwise contribute in any way in preparing or verifying these reports should strive to ensure that our financial disclosure is accurate and transparent and that our reports contain all of the information about the Company that would be important to enable stockholders and potential investors to assess the soundness and risks of our business and finances and the quality and integrity of our accounting and disclosures. In addition:
- no employee may take or authorize any action that would cause our financial records or financial disclosure to fail to comply with generally accepted accounting principles, or other applicable laws, rules and regulations;
- all employees must cooperate fully with our Finance Department, as well as internal and external auditors and independent public accountants and counsel, respond to their questions with candor and provide them with complete and accurate information to help ensure that our books and records, and reports filed with the SEC, are accurate and complete; and
- no employee should knowingly make (or cause or encourage any other person to make) any false or misleading statement in any of our financial reports to any party, or knowingly omit (or cause or encourage any other person to omit) any information necessary to make the disclosure in any of our reports accurate in all material respects.
Any employee who becomes aware of any departure from these standards has a responsibility to report his or her knowledge promptly to his or her supervisor, HR, or the Legal Department.
V. MISCELLANEOUS GUIDELINES FOR CONDUCT
A. Dealing with Competitors
Every Company employee must observe fair and ethical conduct in dealing with our competitors. Staff members are prohibited from involving the Company in arrangements with its competitors which provide for the setting or controlling of rates, prices, or marketing policies.
Reference: Ultra Corporate Policy: Competition Compliance Policy
Breaches of competition law (otherwise known as antitrust laws) can seriously damage the Company and Ultra’s reputation as a responsible, ethical company and damage our relationships with customers and suppliers. The penalties for violation of antitrust laws are VERY severe and extremely serious. Failure to comply with competition rules can lead to fines up to 10% of worldwide turnover. Third parties who suffer loss as a result of anti-competitive behavior can recover up to three times their damages from the Company. In some countries there may also imprisonment for individuals who participated in an illegal arrangement.
B. Dealings with Auditors and Examiners
Employees are required to fully cooperate with the audits conducted by the Company’s internal audit staff, external auditing firms, and any regulators. Questions raised by the auditors or examiners must be responded to honestly, and no adverse information in response to a question may be concealed.
C. Falsification of Books and Records
It is our policy to maintain records and accounts that accurately reflect its assets, liabilities, receipts and disbursements. The falsification of any books, records or documents of the Company is grounds for dismissal.
D. Electronic Mail ("E-mail")
Electronic mail ("E-mail") is a means of communication established for Company business reasons only. Staff members who use E-mail for personal messages do so with the knowledge that the Company reserves the right to monitor and/or review all electronic communications if and when it deems appropriate. All E-mail messages, all Company records and the equipment and systems are Company property. Accordingly, Company employees are expected to use the E-mail system properly and not assume that their messages are confidential. Also the improper use of E-mail, e.g. for the purposes of harassment and discriminating behavior, will result in disciplinary action up to and including dismissal.
Any waiver of any provision of this Code with respect to any employee and /or policy must be approved in writing by the Legal Department.
VII. COMPLIANCE STANDARDS AND PROCEDURES – REPORTING AND INVESTIGATING MISCONDUCT
A. Compliance Resources
To facilitate compliance with this Code, we have implemented a program of Code awareness, training and review. Your most immediate resource for any matter related to the Code is your supervisor. He or she may have the information you need, or may be able to refer the question to another appropriate source. There may, however, be times when you prefer not to go to your supervisor. In these instances, you should feel free to discuss your concern with HR or the Legal Department (Jody Sweet 301-944-1261).
In addition to fielding questions or concerns with respect to potential violations of this Code, the Legal Department is responsible for:
- investigating possible violations of the Code;
- conducting training to refresh employees’ familiarity with the Code;
- distributing copies of the Code annually via email to each employee with a reminder that each employee is responsible for reading, understanding and complying with the Code;
- updating the Code as needed and alerting employees to any updates, with appropriate approval of the Chief Financial Officer and the President to reflect changes in the law, Company operations and in recognized best practices, and to reflect Company experience; and
- otherwise promoting an atmosphere of responsible and ethical conduct.
If you have questions about the Company policy, need guidance on specific situations or want to report violations of the Code, see Section B below. If you are uncomfortable speaking with the Legal Department, please contact the VP of Finance and Administration (Adriann Culp 310-944-1302).
B. Clarifying Questions and Concerns; Reporting Possible Violations
If you encounter a situation or are considering a course of action and its appropriateness is unclear, discuss the matter promptly with your supervisor or the Legal Department; even the appearance of impropriety can be very damaging and should be avoided.
If you are aware of a suspected or actual violation of Code standards by others, you have a responsibility to report it. You are expected to promptly provide a compliance resource with a specific description of the violation that you believe has occurred, including any information you have about the persons involved and the time of the violation. Whether you choose to speak with your supervisor or the Legal Department, you should do so without fear of any form of retaliation. We will take prompt disciplinary action against any employee who retaliates against you, up to and including termination of employment.
Supervisors must promptly report any complaints or observations of Code violations to the Legal department. The Legal department will investigate all reported possible Code violations promptly and with the highest degree of confidentiality that is possible under the specific circumstances. Your cooperation in the investigation will be expected. As needed, the Legal Department will consult with HR and the VP of Finance and Administration.
If the investigation indicates that a violation of the Code has probably occurred, we will take such action as we believe to be appropriate under the circumstances. If we determine that an employee is responsible for a Code violation, he or she will be subject to disciplinary action up to, and including, termination of employment and, in appropriate cases, civil action or referral for criminal prosecution. Appropriate action may also be taken to deter any future Code violations.
Anyone can communicate with the Legal Department, either anonymously or by name, by any of the following methods:
- In writing, addressed to the Legal Department, either by internal mail to Jody Sweet or by U.S. mail to 9715 Key West Avenue, Suite 500, Rockville, MD 20850.
- By phone at 301-944-1261.
Finally, whether or not you have discussed a concern or compliance matter with your supervisor, HR or the Legal Department, or if you are uncomfortable discussing the matter with any Company or Ultra employee, you are ALWAYS encouraged and free to report any matter in one of two ways.
Ultra Electronics Employee Hotline
DoD Hotline: 1-800-424-9098
VIII. DISCIPLINARY ACTIONS
The matters covered in this Code are of the utmost importance to the Company, its business partners, customer and suppliers. The matters and are essential to the Company’s ability to conduct its business in accordance with its stated values. We expect all of our employees to adhere to these rules in carrying out their duties for the Company.
The Company will take appropriate action against any employee whose actions are found to violate these policies or any other policies of the Company. Disciplinary actions may include immediate termination of employment or business relationship at the Company’s sole discretion. Where the Company has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, the Company will cooperate fully with the appropriate authorities.
IX. ACKNOWLEDGMENT OF RECEIPT OF CODE OF BUSINESS CONDUCT AND ETHICS
I have received and read the Company’s Code of Business Conduct and Ethics. I understand the standards and policies contained in the Code and understand that there may be additional policies or laws specific to my job. I further agree to comply with the Code of Business Conduct and Ethics.
If I have questions concerning the meaning or application of the Code of Business Conduct and Ethics, any Company policies, or the legal and regulatory requirements applicable to my job, I know I can consult my supervisor, the Human Resources Department, or the Legal Department knowing that my questions or reports to these sources will be maintained in confidence.