Victaulic Code of Conduct

Victaulic Code of Conduct

CONTENTSMessage from John F. Malloy ............................................ 1Guiding Principles ............................................................ 2Do the Right Thing ............................................................ 2About the Code ................................................................. 3Protecting Company Assets ............................................... 5Intellectual Property – Patents, Trademarks,Copyright, Trade Secrets and Confidential Information ....... 6Fair and Open Competition/Antitrust ................................. 7Trade Sanctions and Boycotts ........................................... 8Health Safety and Environmental Protection ...................... 9Fair Employment Practices ............................................. 11Improper Payments ........................................................ 13Use of Agents, Consultants or Other Third Parties ........... 15Accurate Books and Records .......................................... 17Conflict of Interest ........................................................... 18Supplier Relationships .................................................... 20Money Laundering and Prevention .................................. 21Political Activity ............................................................... 22External Communication ................................................. 23

About the CodeTo Whom Does the Code Apply?All directors, officers and employees of Victaulic and its subsidiaries worldwide and affiliatedcompanies must adhere to the Code. Entities in which Victaulic owns more than 50% of thevoting rights or has effective management control of the entity, are required to adopt and followthis Code.Victaulic employees working with third parties, such as consultants, agents, sales representatives,distributors and independent contractors, must:• Require parties to agree to comply with relevant aspects of the Code• Provide parties with education and information about the compliance policy requirement• Take action up to and including terminating a contract, after learning that a third party failed toabide by Victaulic compliance policiesResponsibilitiesCompany responsibilities:• Conduct business around the world in an ethical and lawful manner• Provide all employees with clear guidelines on business conduct• Implement the Code• Ensure thorough communication and training so all employees are aware ofand understand the Code• Enforce the Code using appropriate incentives and disciplinary action• Implement early detection and reporting systems for any suspected criminal conductor serious offences• Assure that there will be no retaliation for reporting alleged violations of the Code• Require all employees to comply with the Code• Modify the Code as necessaryManager responsibilities:• Set an example by conducting themselves and managing their departmentsin accordance with the Code• Periodically review the Code with your employees• Direct any inquiries concerning the Code to a regional compliance officer or the legaldepartment and ensure concerns have been addressed• Enforce the requirements of the Code• Maintain a work environment that encourages open communication, free fromfear of reprisal concerning compliance with the Codewww.victaulic.com[ 3 ]

About the CodeEmployee responsibilities:• Understand the laws and regulations that apply to your job and follow them• Read, understand and follow the Code• Seek guidance from your manager, legal department or other resources if you are uncertainabout the proper way to act on behalf of Victaulic• Participate in compliance training• Promptly report any suspected violations of the law or Code to your manager, legal departmentor the Victaulic awareness line• If a concern you raise is not resolved, pursue the issue and raise it up through another channel• Cooperate in investigations related to the CodeAnnual Electronic Code of Conduct CertificationEach year employees are required to acknowledge that they have read, understood, and compliedwith the Code, as well as recognize their continued obligations, which includes the obligationto report violations or suspected violations by completing an annual electronic certification.Employees are required to understand their obligations under the Code and acknowledge they havecomplied with its requirements. As part of this certification process, employees have the opportunityto request training or clarification or disclose a potential situation. Employees should includeany activity that might in any way be deemed to constitute such a conflict and doubts should beresolved in the favor of disclosure so that an informed judgment can be made.Getting Help and Reporting a Suspected ProblemEmployees should always try to resolve or remedy the situation in a manner consistent with theCode. If possible, discuss your question or concern directly with the person involved, then contact yoursupervisor. If you believe your supervisor’s response is not adequate contact one of the followingalternatives:• Your manager• Your human resource manager• Mark Van De Voorde, chief legal and administrative officer, + 1 610 923 3190• Your regional compliance officer:Asia Pacific: Gordon Lu, glu@victaulic.com, +86 21 6170 1222 x333Canada: Mario D’Ambrosio, mdambrosio@victaulic.com, +1 905 780 4855Europe, Middle East, Africa & India: Alex Golabek, Alex.golabek@victaulic.be, +32 93811 519U.S.: Joe Savage, jsavage@victaulic.com, +1 610 838 8949Mexico, Caribbean, South America: Rocio Mancinas, rmancinas@victaulic.com.+1 521 6141761070• The Victaulic awareness line is a multi-lingual, toll-free service available 24 hours a day,seven days a week. Like most companies, Victaulic uses a third party to answer calls andtranscribe reported information. Toll-free numbers and web reporting options are availableon the Victaulic website under the ‘Our Company’ tab.[ 4 ] www.victaulic.com

Protecting Company AssetsProtecting company assets against loss, theft and misuseis the responsibility of every employee. Victaulic assetsconsist of both tangible and intangible assets.Tangible Assets:• Facilities• Money• Equipment• Information SystemsIntangible Assets:• Intellectual property• Invention disclosure• Manufacturing know-how• Trade secrets• Computer programsThese assets must be used properly and as authorized bymanagement. Any suspected theft, fraud or inappropriateuse of the company’s assets should be reported to anemployee’s manager or your regional compliance officer.Assets should not be used for personal gain. However,we trust our employees with reasonable and permissibleactivities like calling home to check on a sick child,emailing a spouse to stop at the bank on the way home orprinting a simple grocery list on a company printer. Theseare reasonable and permissible because they are donewithin limits and work goals can still be accomplished.It becomes a problem when employees abuse companyassets for their personal use or gain. Taken too far, it caneven be considered theft or fraud.Use good judgment and ask your manager if you arenot sure.Computers and Data SecurityOnly Victaulic employees canaccess company systems.Third parties can accesssystems only if Victaulic IThas provided approval.Company supplied computers,telephones and mobile devicesare property of Victaulic. Alle-mail, voice mail and filesstored on Victaulic systems arecompany property.There should be no expectationof personal privacy inconnection with informationstored on company computersand systems.The company reserves theright and where permitted bylaw will monitor and review allinformation sent or receivedusing company resources.Use of company computers,networks, email or internetresources to access, view,transmit archive or distributeracist, sexist, threateningor otherwise objectionableor illegal material is strictlyprohibited.Using company resources toviolate laws or regulations ofany nation is prohibited.An Example of Improper Use of Company Assets:Ron, a manufacturing manager, is on the board of alocal charity that is conducting a fundraising drive.He has asked his administrative assistant to organizethe event and to solicit companies in the area to makecontributions to support the organization.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 5 ]

Intellectual Property – Patents, Trademarks,Copyrights and Trade SecretsDO NOT:• Accept confidential informationbelonging to a third party withoutfirst consulting with thelegal department• Execute any document relatingto confidential informationor continuing non-disclosureagreements or provisions withoutprior approval• Discuss confidential informationwith customers or suppliers• Use a third party to developnew products without a writtenagreement approved by the legaldepartment• Disclose information concerninga new product before a patentapplication is filed or othersafeguards have been considered• Create or use a new trademarkbefore it is approved by thelegal and marketing andcommunications departments• Employ a new professionalperson without first signing anon-compete, confidentialityagreement and/or non-solicitationagreement as appropriate for yourjurisdictionVictaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.[ 6 ] www.victaulic.comVictaulic is the world leader in the design, manufacture anddistribution of mechanical piping products and has a longstanding commitment to the development of innovativeproducts. Some of the most valuable Victaulic assets areits intellectual property including patents, trademarks,copyrights, trade secrets and confidential information.Victaulic has an active international program for registeringnew patents, trademarks, and copyrights. Questionspertaining to patents, trademarks and copyrights, includingquestions related to infringement, should be directed toVictaulic’s legal department. Consult with the legal departmentconcerning licensing of all patents, trademarks, trade secretsor confidential information before soliciting, accepting orusing a third party’s intellectual property and before disclosingVictaulic’s intellectual property to third parties.Victaulic trade secrets include new products or servicesunder development, product designs and drawings,engineering procedures and instructions, manufacturingprocesses and formulas, names and addresses ofcustomers, customer lists, pricing, project margins,budgets, as well as research and business strategies.Disclosure of this information can result in Victaulic losingits rights to these trade secrets. Disclosure is prohibitedunless controlled by a confidentiality or license agreementapproved by Victaulic’s legal department.Confidentiality AgreementsAll employees, consultants, and contractors are requiredto sign a confidentiality agreement prior to the beginning ofemployment or engagement. If any customer, distributor,vendor or supplier asks you to execute a confidentialagreement, please contact the legal department.Use of Copyright and/orTrademark InformationEmployees should be respectful of copyright or trademarkinformation and images when creating written and/or oralcommunications, presentations and collateral to be viewedand consumed either internally or externally. It is importantto understand and abide by any copyright rules or laws thatapply to information or photography that is being sourcedfrom an external resource.

Fair and Open Competition / AntitrustVictaulic succeeds in the marketplace by providingsuperior products to our customers and by independentlycompeting in the free market system. We believe thatquality, price and other objective factors determinecompetitive success. Laws against unfair competition,also known as antitrust or fair trade laws, are designed toprotect the competitive marketplace. Victaulic employeesshould never agree to set pricing or contract terms incoordination with a competitor. This is wrong and violatesantitrust and fair trade laws.In the United States and many countries around the globe,these anti-trust and fair trade laws prohibit price fixing,dividing territories, agreeing to contract terms and othersimilar activities with competitors that negatively impactthe consumer and are counter to free market principles.These laws vary depending on where you are doingbusiness in the world.If you come into possession of any information aboutcompetitors that is marked confidential or proprietary,or it can be construed as anti-competitive, call the legaldepartment immediately for advice on what to do.Rules When Dealing withCompetitors:• Never discuss price or dealterms formally or informally• Never discuss dividing territoriesor markets, setting margins orcontract terms• Never discuss production, salescapacity or volume• Never discuss costs or margins• Never discuss market shares• Clearly and openly refuse toparticipate in any discussionsthat could be construed toconcern anti-competitivepractices• Never attempt to do indirectlywhat you cannot do directly.Even casually explaining atopic with indirect commentsor questions about deal termsor pricing is problematic andshould be avoidedAn Example of Improper Antitrust Behavior:John, a sales representative, is at a cocktail receptionat an industry trade show. A sales rep from a directcompetitor approaches John and attempts to engageJohn in a conversation concerning competitive pricingfor an upcoming bid. John does not immediatelystop the conversation but rather continues to shareinformation about Victaulic’s pricing and bid strategy.Even if John continues to listen, but does not shareVictaulic information, it is a violation.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 7 ]

Trade Sanctions and BoycottsAbout Trade Sanctions:• Because trade sanctions aredriven by political events, theychange frequently. If you havequestions, please call the LegalDepartment• The trade sanctions regulationsprohibit actions, exports andtransshipments to or from theU.S. and E.U. to prohibitedcountries and specificallydesignated nationals (“SNDs”)• Never attempt to directly orindirectly get around a tradesanction or export restriction• Liability for violations ofthe trade sanctions is serious– it can apply civil fines andcriminal penalities to both theCompany and to individualsAbout Export Controls:• Be aware that the export ofproducts to some countries isrestricted or prohibited• Be aware of “red flags” such ascomplex shipping or financialarrangements when exportingproductsTrade SanctionsThe U.S. Government maintains a list of countries andindividuals with which U.S. companies may not do businessbecause of trade sanctions. Similar lists are also producedby the European Union. We are also prohibited from doingbusiness with citizens, agents or representatives of thosecountries. For an up-to-date list of these countries andindividuals, contact the legal department.BoycottsU.S. law prohibits U.S. companies from participating inany boycott or restrictive trade practices against countriesconsidered “friendly” to the United States and againstcompanies that are “blacklisted” by other countries orfirms. For example, some companies in the Middle Eastmay seek to include language in contracts that prohibitsVictaulic from doing work in Israel. U.S. law will not allowsuch language to be included or enforced in a contract.Any request to participate in a boycott must be promptlyreported to your manager and the legal department, even ifVictaulic decides not to bid the project. Victaulic is requiredto report all such requests to the U.S. Government.Export ControlsCertain products and technologies may also be subject toexport control restrictions.If you have any questions about whether a sale or shipmentof a product or technology may be restricted, please contactyour regional compliance officer or the legal department.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.An Example of Improper Compliance with TradeSanctions and Boycotts:A Victaulic distributor places an order to fill a bill ofmaterial. Our salesman knows that the distributor intendsto ship the material to Iran. This order is suspect but thesalesman does not report this to his manager.[ 8 ] www.victaulic.com

Health, Safety and Environmental ProtectionVictaulic complies with all federal, state, and local lawsand regulations that apply to its operations, includingthose concerning health, safety and environmentanywhere in the world. Employees will make everyreasonable effort to ensure that Victaulic productsand places of business are safe for the public andits employees. A healthy and safe work place andenvironment is not just the responsibility of thecompany or management, it also demands theattention of every employee.Global Standards and Local PoliciesSafety regulations vary in different countries and states.Victaulic has set global standards for promoting safety,which in turn, are used to create local safety policiesand procedures that are consistent with both localregulations and the company’s global approach. Victaulichas detailed safety policies at every location, which varydepending on the job requirements and local regulations.It is each employee’s responsibility to know and followlocal safety policies.Drugs and Alcohol in the WorkplaceMany employees work where the use or possessionof alcohol or drugs, or reporting to the job under theinfluence of alcohol or drugs, would compromise theirown and other employees’ safety. For example, if anemployee in a manufacturing facility is operating heavymachinery while on narcotic pain killers, even if thedrugs are legally prescribed, this could interfere with hisability to use the machinery safely. Victaulic has specificpolicies that outline rules on the use of drugs and alcoholin the workplace.Use of illegal drugs is not permitted at any Victaulic facilityor project site at any time. Alcohol may only be served atcompany functions, such as a company picnic or holidayparty, in accordance with your local office practices, andonly after obtaining necessary authorizations. Additionally,alcohol may be served as part of a routine businesscustom, such as a business dinner at a restaurant withVictaulic managers and clients.My team gets a monthlyQ: bonus if we meet or exceedour safety goals. One of mycoworkers cut his finger on the joband needed stitches. He doesn’twant to report the injury as aworkplace injury because it willhurt our goals and bonus. Whatshould I do – I want to get thebonus too?While everyone wants toA: get a bonus, not reportinga workplace injury is a seriousviolation of Victaulic standards.Both you and your injuredteammate could be subject todiscipline for not reporting theinjury. Not reporting means wecannot fix a potential safety risk.We want employees to earn safetybonuses because of a truly safework environment, not becauseinjuries are not reported.Report:• All workplace injuries• Any risk to safety, securityor health• Any concerns about drugs andalcohol in the workplaceVictaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 9 ]

Health, Safety and Environmental ProtectionWeapons and Violence in the WorkplaceOn a maintenance projectQ: I manage, we came acrossasbestos that needs to be removed,but I worry that our schedule andbudget will be harmed if we wait forour maintenance or environmentaldepartment to hire a certifiedcontractor to perform the work.It would be more efficient for us ifwe had a Victaulic worker removethe asbestos using proper safetyequipment. Is this acceptable?No. You clearly should notA: remove a hazardous substanceeven if it negatively impacts thebudget or timing of a project.Because of legal risks and costsrelated to handling environmentalcontaminants, Victaulic has made astrategic decision to hire a certifiedcontractor to handle work like this.Personal weapons, such as guns and tools that can beused to harm others, should never be brought into theworkplace. Violence, threats of violence, harassment,threatening remarks or gestures, or other disruptivebehavior in the workplace are unacceptable.Examples of Health and Safety Violations:Jim, a maintenance electrician, was working onelectrical or powered equipment without followinglock-out, tag-out safety procedures.Evelyn, a machine operator, decided it was easierto get her job done by disabling the safety controlsand removed protective guarding on the machiningcenter she was operating.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.Peter decided to not use his protective hood in thefinishing operation because it was too hot that dayin the factory, thereby exposing himself to potentialeye injuries.[ 10 ] www.victaulic.com

Fair Employment PracticesThe laws in many countries that promote the fair treatmentof workers, especially women and minorities, varyconsiderably. Because of this, Victaulic has establishedglobal standards so that all employees around the worldare treated with respect and fairness.Employment decisions such as hiring, promotion, pay,termination, training opportunities and job assignmentsare made on the basis of qualifications, experience,competence and performance, and not because of aperson’s protected characteristics, which may include:• Gender • Pregnancy • Age• Color/ Race • Disability • Marital status• National origin • Religion • Veteran status• Other characteristics protected by law (affiliations,associations, beliefs and sexual orientation)Workplace HarassmentEmployees should work in a safe and professionalatmosphere, where merit and competence are vital, anddiversity and trust are encouraged. We strive to createa work environment that is free from harassment bycoworkers, supervisors, providers of goods and services,contractors and clients. Workplace harassment can occurin many forms including verbal, physical or visual. Allforms of harassment share a common trait – the behaviormay create an intimidating, offensive or demeaningenvironment.In my department, thereQ: are employees of all agesand I am among the older group. Iheard two managers talking abouthow they need to promote more“younger” people because theyhave more energy and drive andbecause they aren’t going to retirefor a long time. I worry that I willget passed over for promotionsbecause of my age. What shouldI do?You should contact yourA: supervisor or your localhuman resources manager so thatthe company can conduct a properinvestigation to determine if agediscrimination has occurred inpractice, not just in conversation.Victaulic makes promotiondecisions based on a person’sskills, knowledge and ability.The company will not permitretaliation for reporting problemsin good faith.Examples of potential sexual harassment can includebut are not limited to: unwanted advances, inappropriatesexual jokes, sexually suggestive comments, touching,requests for sexual favors and inappropriate commentsabout appearance.Other examples of harassment include: offensivecomments, jokes or pictures related to race, religion,ethnicity, gender or age. Even materials and commentssent privately using company e-mail or voice-mail can beconsidered harassing.Offensive gestures, comments and communications haveno place at Victaulic.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 11 ]

Fair Employment PracticesI am friends with a man whoQ: works in my department.Sometimes we will share jokes thatmight be considered offensive inmy office but we are careful to shutthe door so no one hears. We alsoforward each other funny jokesvia e-mail. Could this be consideredharassing behavior even though it isbetween two friends and not sharedwith anyone who is offended?While the company doesA: not attempt to regulateemployees’ private behavior, thesituation you describe takes placeon company property, on companytime and on a company e-mailsystem. This behavior does notfit in our workplace, even in theprivacy of your office.Protecting ConfidentialEmployee InformationFor personnel, payroll and certain routine operations,Victaulic maintains and uses private and sensitivepersonal information about employees (such as homeaddresses, education, resumes, social security numbersand compensation data) for legitimate business purposes.Victaulic complies with the many data privacy lawsaround the world that govern the handling of suchinformation. However, we also depend on employees torespect information privacy by only accessing and sharingconfidential employee data:• for legitimate business purposes• with proper approvals and on a need-to-know basis• not repeating or discussing information with anyone whois not approved to know such information• not requesting or requiring detailed information aboutan employee’s healthBackground Checks – EmployeesWe seek to recruit and hire employees who are not onlyprofessional and competent but also that are reputableand honest. Human resources routinely conductspreemployment background checks on new hires, asappropriate on an as-needed basis.Examples of unfair treatment violations:Vivian, a customer service representative, isdischarged after she explains that she needs totake a day off because she honors her religiousobservations.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.Raj is a computer analyst who leaves his desk atnoon time to pray in a conference room. Hisco-workers have complained, and Raj’s managerhas told him to stop.[ 12 ] www.victaulic.com

Improper PaymentsWe will compete on the basis of the merits of our productsand our services in the global market place. We will sellour products honestly and will not pursue any sale thatrequires us to act unlawfully or in violation of this standard.It is a violation of the Code to give or receive• Bribes • Kickbacks • Favors • Personal services• Gifts or entertainment greater than a modest valueWe cannot act or appear to be acting improperly in any ofour business dealings. Our relationships with suppliers,distributors or direct customers and other parties,including engineering and contracting firms, as well asregulatory and licensing authorities, must be based onlawful, efficient and fair business practices. It is a violationof the Code if you accept a gift or a favor from a supplier,subcontractor, agent or consultant that benefits youpersonally as a Victaulic employee or a family member.In many parts of the world, bribing government officialsand business people is both expected and practiced.However, making a gift of anything of value to foreignofficials – public or private – are against the law and athreat to fair competition.Any Victaulic employee paying or facilitating an improperpayment or gift will be disciplined up to and includingtermination. In addition, the employee may be subject topersonal liability and possible jail time, as provided underapplicable laws.An Example of an Improper Payment Violation:A supplier bidding on a new product line offers Rita afee to provide him with the amount of the lowest bid.Peter, a sales engineer, discusses how much ofthe commission or fee paid to our agent should beused to reward the procurement officer for convincinghis management team at the state-controlled miningcompany that Victaulic should be selected to buyproduct.Is it true we cannot offer toQ: pay for the cost of a visit toVictaulic’s headquarters for the headof a governmental rating agencygoverning our product?It is entirely appropriate toA: pay for the transportation,hotel and reasonable meals costsfor the employee of a state ownedor government rating agency orcustomer for purposes of educatingthe individual on our products andservices. We should limit ourselvesto covering the reasonable cost oftraveling to and from Victaulic’slocation, hotel and meals duringthe days traveling to and fromVictaulic’s facilities and job sites.We are not to pay for anythingbeyond this including travel andaccommodations for side trips ontheir return to home. No cash oranything of value should be paid tothese officials.In my country it is commonQ: practice to provide “grease”as a way of facilitating payments. Isthis in violation of the Code?Yes. “Grease” or facilitatingA: payments for expeditinga routine government action ona timely basis are prohibited.Examples of these governmentactions are permits, licenses andother official documents, processinggovernment papers like a visa,loading or unloading cargo, orscheduling inspections.www.victaulic.com[ 13 ]

Improper PaymentsFCPA prohibits the corrupt paymentor offer to pay:Anything of value• To a foreign official, politicalparty, party official or candidate• To influence any act to secureimproper advantage• To obtain or maintain ordirect businessFCPA prohibits any corruptpayments knowing that fundswill go to a foreign official evenif routed through an agent orconsultant.Foreign officials include employeesof commercial businesses wheregovernment control or involvementexists. It also includes any employeeof the government, internationalorganization, department agency oranyone acting in an official capacity.This applies to any public officesregardless of rank.What does “anything of value”Q: mean?This includes cash orA: its equivalent, tangibleor intangible property, usefulinformation, promise of futureemployment, campaign or lobbyingpayments, college or universityscholarships, sports equipmentor recreational vehicles, servicesat inflated prices or payment forsexually explicit entertainment.Victaulic as a U.S. parent company with internationalsubsidiaries is subject to several specific laws governingimproper payments:Foreign Corrupt Practices Act (FCPA) of 1977 – prohibitscorrupt payments to foreign government officials forobtaining or maintaining business. It requires companiesto keep accurate books and records and ensure thatadequate accounting and financial controls exist.Furthermore, the actions of a third party acting as anagent, distributor or consultant of Victaulic can expose thecompany to liability under FCPA.The OECD Convention on Combating Bribery – requiresthe 38 signatory countries to enact laws to prohibitbribery in international business dealings and mandateaccounting changes to detect corrupt activities.U.S. Travel Act – provides for federal prosecution of violatorsof commercial bribery and bribery of public officials.These laws apply to all Victaulic subsidiaries.Generally, acceptable gifts are:• Not monetary• Customary in the trade or industry• Of nominal value• Given or accepted without an express or impliedunderstanding that the recipient is in any way obligated• Properly reported and recordedYou should clearly describe any gift and to whom it wasprovided to and their current relationship to Victaulic whenseeking reimbursement on your expense report. If there isany question whether a gift is acceptable or appropriate,you should ask your supervisor before you give it and ifnecessary, contact our legal department to ensure it doesnot violate company policy.Sexually explicit entertainmentSometimes customers, suppliers and even employeeshave an interest in having business meals andentertainment that involves sexually inappropriatebehavior. Regardless of local customs, Victaulic will notcondone or fund sexually inappropriate entertainment.[ 14 ] www.victaulic.com

Use of Agents, Consultants or Other Third PartiesIn many countries it is common practice to use agents,consultants, representatives, distributors or other thirdparties to arrange or broker deals with foreign governmentsor government entities (i.e. state mining companies)and private entities. These types of relationships can beproblematic.Accordingly, Victaulic has issued a Global Distribution &Agent Agreement Policy. This policy outlines the processfor reviewing proposed agency agreements and duediligence requirements.It also outlines when a written Distributor agreementis required to support our non-exclusive, unilateraldistribution strategy. The policy provides guidance on theDistributor appointment processes, sales to direct accountsand other business relationships for compliance with thecompany’s policy prohibiting improper payments.AgentsBefore entering into substantive discussion with anagent candidate the country, regional or divisionalmanager and their respective financial professional mustnotify the Victaulic chief financial officer and the legaldepartment and obtain approval to proceed. Due diligencerequirements will be provided by the legal department.Is it true that contracturalQ: compliance with anti-briberylaws is required for any Agent usedby Victaulic?Yes. The requirements ofA: the Victaulic Policy includecompliance with the FCPA, OECDconvention and all other applicableanti-bribery laws, and must becontracturally accepted andcomplied with by the agent.Victaulic country, regional or general managers and theirrespective finance professionals must complete a writtenreport to ensure we are dealing with individuals whocomply with the laws prohibiting improper payments,who are reputable and do not have a history of unlawfulbehavior as well as who have the requisite experienceand technical skills. The report will be submitted to theCFO or legal department and the CEO for approval prior toentering into an agency agreement.The requirements of Victaulic’s policy, includingcompliance with the FCPA and OECD convention, must becontractually accepted and complied with by the agent.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 15 ]

Use of Agents, Consultants or Other Third PartiesAll payments to agents require the approval of the chieffinancial officer of Victaulic.How do I know if aQ: relationship is one ofan independent distributor oran agent?The answer is “it depends.”A:Key questions to be answered are:• Do they sell other productsbesides Victaulic’s?• Do they sell other products orproducts for other customers?• Do they inventory products?• Do they take title and risk ofloss to the product?If the answer is “No” to anyof these questions there is thepotential that this is an agencyrelationship. Contact our legaldepartment for assistance.Although a third party may be called a consultant orrepresentative, they may in fact be acting as Victaulic’sagents. Any proposed agreements with consultants andrepresentatives must be reviewed by the legal department.DistributorsWorking closely with distributors is an important partof Victaulic’s global business. As part of its complianceand risk management program, Victaulic seeks to verifycompliance with anti-corruption and money launderinglaws in countries classified as high risk. Countries areclassified as “high risk” based on an independent, thirdparty assessment by Transparency International whichproduces an annual corruption index. Victaulic utilizesthis index to establish its risk threshold for its dealingswith third parties.All distributors in high risk countries require a third partyinvestigation. The first investigation will be performedprior to appointing a new distributor. Every two yearsthe investigation will be updated. If we become awareof a potential corruption or money laundering issue at adistributor during the two year period, a new investigationwill be performed. All investigations must be reviewed bythe chief compliance officer and the legal department.Victaulic also requires all distributors in high riskcountries to certify their annual and ongoing compliancewith both the FCPA and the applicable local anti-briberylaws of their country.Victaulic may require a written distributor agreement toprotect Victaulic and its IP, assets, and employees fromlegal or business risks.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.Third Party Brand UsageOccasionally, third parties may request to utilize Victaulicbrands, logos or other trademark/copyrighted material.These requests should be directed to the marketing orlegal departments.[ 16 ] www.victaulic.com

Accurate Books and RecordsEvery Victaulic location is required to keep accurate booksand records. Accurate, timely financial or operationalrecords, as well as robust export controls provide the coreinformation that is necessary to manage our business.All company payments and other transactions mustbe properly authorized and accurately recorded inthe financial statements which should be prepared inaccordance with U.S. general accepted accountingprinciples and Victaulic accounting policies. Adequateinternal controls must exist in all locations to ensure ourfinancial information is complete and accurate.No undisclosed or unrecorded company funds shall beestablished for any purpose, nor should company fundsbe placed in any personal or non-corporate account. Allcompany assets must be properly safeguarded and shouldbe periodically reconciled to financial records.Company assets and property should not be intentionallydamaged, nor taken or removed from company premiseswithout proper authorization. Company assets do includeelectronic information in any format.Financial information should not be provided to anyoutsider to the company without the approval of theChairman/CEO and CFO.No employee should bepressured to alter financialinformation or other data “to meetthe numbers.”Fear of Reporting “Bad News”Delays in reporting bad newsonly makes problems worse anddecreases the chance of solvingor lessening the problem. All badnews, financial or otherwise, shouldtravel very fast up the chain ofcommand.Holding Back Profits forFuture PeriodsHolding back reserves, profits orother contingencies to protectprofits in the future is unacceptable.Reserves, contingencies and profitsshould be analyzed and reportedusing proper generally acceptedaccounting practices and internalaccounting policies.An Example of Improper Financial Records andPoor Controls:Silvia, an accounting clerk, is asked by her supervisorto charge ordinary operating expenses against a specialaccounting reserve. When she objects stating this willmisstate the earnings of the division, she is told this willimpact everyone’s annual performance bonus and ifshe doesn’t “we will get someone who will.”Fred, a sales director in the company, instructs hisdirect reports to purchase costly training equipmentand report it on their expense reports. This practicebypasses the approval process for capital items.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 17 ]

Conflict of InterestMy spouse and I have a sideQ: business which is unrelatedto my job at Victaulic. Our sidebusiness can provide Victaulic witha superior product and lower cost.Can I be a supplier to Victaulic?This situation creates aA: potential conflict of interest.Sometimes these situations cannotbe avoided, but can be possiblymanaged with full disclosure ofpotential conflicts. This must bedisclosed and approved by yourmanager/supervisor.I am thinking about getting aQ: second job. Do I need to tellor get permission from anyone?Victaulic does not prohibitA: you from getting a secondjob; however, your primary workobligation is to Victaulic. Anysecondary employment must notinterfere with your Victaulic job.You may not use Company time,equipment, suppliers or computersto perform a secondary job. You mustalso ensure the secondary job doesnot cause a conflict of interest withVictaulic. Victaulic employees cannotbe simultaneously employed in theselling, marketing or representationof other piping related products.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.Our directors, officers, employees and representativesmust be loyal to Victaulic. A conflict of interest existswhen your private interests improperly interfere in anyway, or even appear to improperly interfere, with theinterests of Victaulic.Conflict of interests don’t end when you leave the office.You must manage all business relationships that youmay have with your Victaulic responsibilities in mind.Even outside the office, work to avoid any situation thatmight lead to a conflict – or the appearance of a conflict –between yourself and your work at Victaulic.Most importantly, if you knowingly have a conflict ofinterest or believe there is a risk that something might be aconflict of interest, your obligation is to disclose it. You cannotify your manager: contact human resources, regionalcompliance officer or the legal department; or disclose thisin our annual conflict of interest certification.Typical examples of conflict of interest include:• Ownership interest or investment (more than 5% ofstock in a company) in any product or service supplier,customer, distributor or competitor.• Consulting or employment relationships with anycustomer, supplier or competitor.• Outside business activity (ownership, employment, orsupplier/consultant relationship), which competes orcould compete with any of the company’s businesses.• Any outside activity that may interfere with anassociate’s ability to devote appropriate time andattention to company responsibilities.• Selling or buying transactions with the company (exceptany normal program of disposal of corporate propertywhich is offered to employees generally.)• Service on any board of directors of any customer,supplier, or competitor unless such board service hasbeen disclosed to the company.• Supervising, reviewing or having influence on the jobevaluation, pay or benefits of any member of yourimmediate family (includes person’s spouse, parents,grandparents, children, grandchildren, siblings, motherand father-in-law, sons and daughters-in-law, and[ 18 ] www.victaulic.com

Conflict of Interestbrothers and sisters-in-law), or close personal friend.• Obtaining any loan from a customer, supplier orcompetitor of the company other than a bank; and if youare an officer of the company, from any bank with whichthe company does business, unless a loan with similarterms is generally available to customers of the bank andis disclosed to the company’s chief compliance officer.I am a Victaulic sales managerQ: and my son works for adistributor that competeswith Victaulic. Is this a conflictof interest?It creates the potential for, andA: the appearance of, a conflictand should be disclosed to thecompany.Annual Electronic CertificationEach year employees receiving a copyof the Victaulic Code of Conduct willbe asked to acknowledge that theyread, understood and complied withthe code including the obligationto report violations orsuspected violations.An Example of a Conflict of Interest:A senior executive is also on the board of directors ofa corporation that supplies his company with services.The executive has not made it known to the companythat he is on the other company’s board.The employee should disclose anyactivity that might be deemed in anyway to constitute such a conflict, anddoubts should be resolved in favorof disclosure so that an informedjudgment can be thereafter made.Frank is an employee whose brother operates avending machine company. He learns that his plantwill soon be choosing a new vending service. Frankgives his brother the terms of the best proposalreceived thus far. He then submits a better proposalon behalf of his company.Sofia, a manager, is responsible for filling an openposition in her department, Sofia’s cousin is wellqualified and looking for a job. Instead of turning thehiring decision over to her director, Sofia hires hercousin as her direct report.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 19 ]

Vendor and Supplier RelationshipsI have a long time personalQ: relationship with our supplierof replacement motors. We socializeon the weekend and he often takesmy wife and I out for dinner. Am Idoing anything wrong?Considering your longtermrelationship with this A:individual you should be reportingthis as a conflict of interest to yourmanager. It would be in everyone’sbest interest to re-assign thisrelationship to another buyer orcommodity manager.Victaulic maintains zero tolerancefor bribery and expects oursuppliers and contractors to dothe same. Bribery is directly orindirectly giving or promisinganything of value to improperlyinfluence the actions of a thirdparty. Bribes may include money,gifts, travel expenses, hospitality,vacations, expenses or any direct orindirect benefit of consideration.Victaulic’s relationships with suppliers, vendors andsubcontractors will be based on lawful, competitive andfair trade practices. It is Victaulic policy to purchase allequipment, supplies and services based on merit – theability to meet our requirements for quality, price anddelivery. All suppliers will be treated with integrity, fairnessand without discrimination.We will do business only with suppliers that comply with localand other applicable legal requirements.Victaulic associates should not take unfair advantage ofanyone through manipulation, concealment, abuse ofprivileged information, misrepresentation of material facts orany other unfair dealing practice.We will safeguard Victaulic’s confidential and proprietaryinformation with a confidentiality agreement and safeguardany supplier-provided information protected by anyconfidentiality agreement.As a global company, Victaulic seeks to negotiate formalcontracts for ongoing services or large-scale purchases.Global procurement or legal should be utilized as needed.Background Checks – Suppliers/Contractors/ConsultantsWe should apply the same standards in hiring contractorsand consultants as we would with our employees: competent,professional, reputable and honest. Those employeesinvolved with procurement decisions and the hiring ofcontractors or consultants should also conduct appropriatebackground checks of the consultants and contractors.Examples of Improper Abuse in Supplier Relationship:Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.[ 20 ] www.victaulic.comFrancine, a buyer, directed business to a supplier ownedand managed by her cousin without conductingappropriate background checks and supplier compliance.Tim selected his new office supplies vendor because theygave him free school supplies for the next several years.John, foundry manager, selected a scrap dealer becausehe provided a 10 percent kick-back for every pound ofscrap material processed.

Money Laundering PreventionPersons involved in criminal activity, e.g., fraud, bribery,terrorism and narcotics, may try to “launder” the moneythey derive from their crimes to hide or legitimize them.More than 100 countries now have laws against moneylaundering, which prohibit conducting transactions thatinvolve proceeds of criminal activities. Another scenario ofconcern is the use of legitimate funds to finance terroristactivity – sometimes called ‘reverse’ money laundering.Victaulic will comply with all anti-money laundering andanti-terrorism laws throughout the world and will conductbusiness only with reputable customers engaged inlegitimate businesses, with funds derived from legitimatesources. Failure to detect customer relationships andtransactions that place Victaulic at risk can severelydamage Victaulic’s integrity and reputation.Be alert to the following activities:Requests to transfer money to a third party or to theowner or an employee of the actual customer or to anunknown or unrecognized account. Verify the owner of theaccount prior to any transfer.Payments that appear to have no connection tothe customer.A customer, distributor or agent who is reluctant toprovide complete information, provides false or suspiciousinformation, or attempts to avoid reporting or recordkeeping requirements.Offers to pay in cash.Orders, purchases or payments that are unusual orinconsistent with the customer’s business.Unusually complex payment arrangements that have noreal business purpose or unusually favorable paymentterms.Transactions involving locations identified as tax havensor areas of known terrorist activity, narcotics trafficking ormoney laundering activity.Transactions involving foreign shell or offshore banks ornon-bank financial intermediaries.The owner of our foreignQ: distributor offers to bring hisaccount current by paying an invoicetwice and requests that a portionof the second payment be returnedto his personal account in anothercountry. What should I do withthis request?This proposal is suspiciousA: and should be reported to yourmanager and the legal department.Our suppliers and contractors areexpected to follow applicable lawsthat prohibit money laundering andrequire the registry of cash andother suspicious transactions.IF YOU ENCOUNTERA WARNING SIGN ofsuspicious activity raiseyour concern with theVictaulic legal departmentand be sure to resolve yourconcern promptly beforeproceeding further withthe transaction. Ensurethe resolution is welldocumented.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 21 ]

Political ActivityPolitical contributions may includeany of the following:• Contributing to a local, state orfederal political candidate onbehalf of the company• Purchasing tickets for apolitical fund raising event withcompany funds• Providing anything of valueincluding meals, goods,services, travel accommodationsor tickets for sporting andentertaining events• Loaning personnel or othercorporate resources duringworking hours for political fundraising activities• Paying for politicaladvertisements or othercampaign expensesI accepted an invitation toQ: attend a fundraiser for myhometown congressman. I cannotattend but want to send in a check.May my assistant overnight apersonal check to the campaign?Yes, provided that the costA: of the overnight postage isreimbursed to the company.Lobbying and political activity are an important part ofdemocratic (political) process, but strict rules govern whatcorporations may and may not do in this arena. Victaulicis active in establishing good relationships with electedofficials to enhance the company’s business environment.However, in nearly all the countries in which Victaulicoperates, there are stringent legal restrictions on whata company can contribute, offer, promise or give to anelected official and their staff.Employees may not give, offer or authorize to offercompany funds or other company assets (directly orindirectly) for political purposes without consulting thelegal department who will seek approval of the chairmanand CEO.A political contribution could be construed as a bribe ifit is done, directly or indirectly, in exchange for an actionby the government official. This can be direct, such asrecommending Victaulic’s selection on a procurementdecision or other similar acts, or indirect, such aspromising to include Victaulic in the list of approved – oreven possible – vendors for a current or future payment.Personal Political ActivityVictaulic encourages political activity by employees insupport of candidates or parties of their choice. However,you cannot use company time, property or equipmentfor your own political activities. Personal participation inpolitical activities is an employee’s choice and must betotally voluntary.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.[ 22 ] www.victaulic.com

External CommunicationsNews & Trade MediaAll communications with and requests from newsor trade media should be directed to the corporatecommunications department. Media requests mightinclude desired insight into following subjects:• Workforce contract negotiations, management changes• Mergers, acquisitions, or significant business events• New products, policies, processes, or business strategiesSocial MediaThe use of social and business networking sites byVictaulic employees is becoming more commonplaceas these tools become a major method of business andpersonal communication, networking, and research.Engagement in social media is acceptable when adheringto the following guidelines:• Employees should not use these forums to referenceproprietary business information.• Victaulic employees are personally responsible for thecontent they publish on these forms of social media.• If you identify yourself as a Victaulic employee on agiven site, it is required that your profile and relatedcontent should be consistent with how Victaulic wouldexpect you to present yourself to colleagues and clients.• In any related comments or posting you must make itclear that you are speaking on your own behalf and noton behalf of Victaulic.• Be mindful that what you publish will be public fora long time.All communications and requests from bloggersand writers should be directed to the corporatecommunications department.If you see a comment or posting of concern, you areencouraged to bring it to the attention of the legaldepartment and the corporate communicationsdepartment.Examples of Improper ExternalCommunications:Phyllis, a marketing manager inChina, conducts an interview witha trade magazine and describesa new product that is still indevelopment and has not beenofficially launched. Phyllis shouldhave contacted the corporatecommunications departmentregarding this request and focuson approved product messaging forcommercially available products.Joe, a sales leader in Europe,posts on his LinkedIn profile thathe is responsible for sales in aVictaulic vertical market andlists the actual Victaulic salesrevenues of that vertical or lists hiscomments on Victaulic’s approachto growth in that vertical. Heshould simply state his role andresponsibility at Victaulic. Joeshould not disclose financial orother proprietary information.Janet, an administrative assistantin Forks Manufacturing, receivesa phone call from a reporter whoinquires about status of Unioncontract terms and she replies“I think that is true, but I willlet you know” versus taking theirinformation and passing along tothe corporate communicationsdepartment.Victaulic awareness lineRefer to the ‘Our Company’section of Victaulic.com forspecific contact information.www.victaulic.com[ 23 ]

Spanning the Globe with facilities and salessupport servicing more than 115 countries•••••• •••••••• •• •••• •••

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www.victaulic.comVictaulic CompanyVictaulic Company@VictaulicVictaulicCompanyVICTAULIC GLOBAL CONTACT INFORMATIONUS & WORLD HEADQUARTERSP.O. Box 31Easton, PA 18044-0031 USA4901 Kesslersville RoadEaston, PA 18040 USA1-800-PICK-VIC(+1-800-742-5842)(within North America)+1-610-559-3300+1-610-250-8817 (fax)pickvic@victaulic.comCANADA123 Newkirk RoadRichmond Hill, ON L4C 3G5+1-905-884-7444+1-905-884-9774 (fax)viccanada@victaulic.comCENTRAL ANDSOUTH AMERICAP.O. Box 31Easton, PA 18044-0031 USA4901 Kesslersville RoadEaston, PA 18040 USA+1-610-559-3300+1-610-559-3608 (fax)vical@victaulic.comUNITED KINGDOMUnits B1 & B2, SG1 Industrial ParkCockerell CloseGunnels Wood RoadStevenageHertfordshire, SG1 2NB (UK)+44-(0)-1438-310-690+44-(0)-1438-310-699 (fax)viceuro@victaulic.beEUROPEPrijkelstraat 369810 Nazareth, Belgium+32-9-381-15-00+32-9-380-44-38 (fax)viceuro@victaulic.beMIDDLE EASTP.O. Box 17683Unit XB 8Jebel Ali Free ZoneDubaiUnited Arab Emirates+971-4-883-88-70+971-4-883-88-60 (fax)INDIAVictaulic Piping ProductsIndia Priv. Ltd.Indialand Global Industrial ParkPlot 4, Hinjewadi, Phase I,MulshiPune 411057 (India)+91-20-67-919-300+91-20-67-919-361 (fax)ASIAUnit 06-10, Floor 3AA Mansion 291 Fumin RoadShanghai, China 200031+86-21-6170-1222+86-21-6170-1221 (fax)vicap@victaulic.comAustralia and New Zealand7 Chambers RoadUnit 1Altona North, VictoriaAustralia 30251-300-PIC-VIC(+1-300-742-842)(within Australia)+61-3-9392-4000+61-3-9392-4096 (fax)vicaust@victaulic.comwww.victaulic.comUpdated 04/2013VC-20 3708 Rev.gVictaulic is a registered trademark of Victaulic Company.© 2013 Victaulic Company. All rights reserved.