CODE
OF BUSINESS CONDUCT AND ETHICS
Precision
Aerospace Components, Inc.
TABLE
OF CONTENTS
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Introduction
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3
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1.
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Conflicts
of Interest
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3
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2.
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Interest
in Other Business Organizations
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4
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3.
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Gifts,
Gratuities and Payments to FCC Employees
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4
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4.
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Public
disclosure of the facts would not embarrass the Company
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4
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5.
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Corporate
Opportunities Converted to Personal Benefit
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5
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6.
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Fair
Dealing with Customers, Suppliers, Competitors and Others
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5
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7.
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Company
Records and Preservation of Assets
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5
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8.
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Proprietary
or Confidential Information
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6
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9.
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Compliance
with Laws, Rules and Regulations
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6
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10.
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Public
Communications
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6
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11.
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Insider
Trading
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6
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12.
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7
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13.
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Political
Contributions
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8
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14.
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Non-Discrimination
and Non Harassment
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8
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15.
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Substance
Abuse
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8
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16.
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Electronic
Communications
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8
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17.
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Environmental
Responsibilities
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9
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18.
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Compliance
with Antitrust Laws
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10
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19.
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Bidding,
Negotiation and Performance of Government Contracts
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12
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20.
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Protection
of U.S. Government Classified Information
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12
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21.
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Compliance
and Discipline
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12
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22.
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Questionnaire
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12
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23.
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Waivers
of the Code of Business Conduct and Ethics
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12
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24.
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Problem
Solving
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13
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25.
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Seeking
Advice/Reporting any Illegal or Unethical Behavior
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13
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26.
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Administration
of the Code of Business Conduct and Ethics
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13
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27.
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Non-Exclusivity
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14
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CODE
OF BUSINESS CONDUCT AND ETHICS
Introduction
We ask
for, and expect, a great deal from everyone associated with Precision Aerospace
Components Corp. and its subsidiaries (collectively, the "Company"). We ask that
you produce outstanding results and maintain high standards of business
conduct. We ask that you become deeply involved with our business in
its many forms. We ask that you work smart and make intelligent and
rational decisions, which make the difference in our ability to be successful
throughout the world in highly competitive businesses. At the same
time, we also ask that you, as members of this Company, act in ways that will
bring credit to yourselves, your families and your associates.
The
purpose of this Code of Business Conduct and Ethics (the "Code") is to set forth
the basic principles and guidelines for the employees, officers, and directors
of the Company, including the Company's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions (collectively, the "Employees"), and to codify
standards reasonably designed to deter wrongdoing.
In
addition to strict compliance with legal requirements, all Employees are
expected to be guided by the principles of honesty and professionalism in the
conduct of the Company's affairs, and to comply with the policies contained, or
referred to, in this Code. No code of business conduct and ethics can
replace the thoughtful behavior of Employees. However, such a Code
can focus the board and management on areas of ethical risk, provide guidance to
personnel to help them recognize and deal with ethical issues, provide
mechanisms to promptly report unethical conduct, and help to foster an awareness
of the Company's obligations to shareholders, other Employees, customers,
vendors, and the general public.
Please
read this Code carefully. After
reading this booklet, you must return the enclosed reply card to your Human
Resources Manager (defined as the chief Human Resources authority at your
operating unit), acknowledging that you have read and understand the Company's
Code of Business Conduct and Ethics. You are then responsible for
compliance with this Code and, if you are a supervisor or manager, for making
sure that those under your supervision know and adhere to it
also. Failure to comply with the Code in any respect will result in
disciplinary action, termination of employment, or other corrective action
determined legally appropriate by the Company. If you are in a
situation which you believe may violate or lead to a violation of this Code, a
law, or Company policy, follow the guidelines described in Section 23 of this
Code.
1.
Conflicts of Interest
To
maintain the highest degree of integrity in the conduct of the Company’s
business and to maintain an Employee’s independent judgment, each Employee must
avoid any activity or personal interest that creates or appears to create a
conflict of interest between the Employee's interest and the interests of the
Company. Generally, a "conflict of interest" exists when a person's
private interest interferes in any way with the interests of the
Company. A conflict situation can arise when an Employee takes
actions or he interests that may make it difficult to perform his or her Company
work objectively and effectively. Sections 2, 3 and 4 of this Code
provide specific examples of conflicts of interest. Loans to, or
guarantees of obligations of, Employees and their family members may also create
conflicts of interest.
Conflicts
of interest are prohibited as a matter of Company policy, except under
guidelines approved by the Board of Directors. Conflicts of interest
may not always be clear-cut, so if you have a question, you should consult with
your manager, or a higher level of management or Company legal
counsel. Any Employee who becomes aware of a conflict or potential
conflict should bring it to the attention of a supervisor, manager or other
appropriate personnel or consult the procedures described in Section 23 of this
Code.
2.
Interest in Other Business Organizations
Employees
or members of their families should not have a "significant financial
interest" in any business organization that does, or seeks to do, business with
the Company, or is a competitor of the Company, unless such interest has been
fully disclosed in writing to the Employee's Human Resources Manager, who will
determine whether the Employee's duties with the Company will require him or her
to make decisions that could be influenced by such interest.
As a
minimum standard, a "significant financial interest" is an aggregate interest of
an Employee and family member of more than:
1% of any
class of outstanding securities of the firm or corporation, or 10% interest in
any partnership or association, or
5% of the
total direct and beneficial assets or income of such company.
Family
members include spouse, minor or adult child, stepchild, parents, stepparents,
brothers, sisters, grandparents, grandchildren, in-laws and any person living in
the same household.
An
Employee must not conduct business on behalf of the Company with a member of
his/her family, or business organization with which the Employee or family
member has "significant financial interest" or is a director, officer, employee,
creditor or proprietor. An Employee whose duties bring him or her
into contact with an organization that employs a family member should take
appropriate precautions to avoid a potential conflict of interest or the
suspicion of preferential treatment. The Employee should consult with
his or her supervisor and, if necessary, disqualify himself or herself from
acting on behalf of the Company.
3.
Gifts, Gratuities and Payments to FCC Employees
No
Employee should accept gifts, loans, favors or entertainment directly or
indirectly from any person, firm or corporation doing business, or seeking to do
business, with the Company, other than nominal gifts or courtesies as described
further below. Gifts or loans of cash or other property, or gift
certificates in any amount whatsoever, or any form of bribe or kickback, to
Employees by existing or potential suppliers of the Company are
forbidden. This policy does not prohibit either giving or receiving
reasonable courtesies in the normal course of business.
In the
application of this policy, Employees may accept such courtesies only if they
meet all of the following criteria:
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1.
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They
are consistent with accepted business practice and in a form that is not,
will not appear to be, or will not be construed as, a bribe, kickback,
payoff or substantial personal benefit to the
Employee.
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2.
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They
are of nominal value or intended for business use, such as datebooks, desk
calendars or business meals.
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3.
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They
do not violate any applicable law, regulation or generally accepted
ethical standard.
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4.
Public disclosure of the facts would not embarrass the Company.
The
policy is not intended to eliminate participation in business-related functions
and activities that occur in conjunction with seminars, exhibits, meetings and
presentations, which often involve lunches, dinners
and entertainment. These can be, under the proper circumstances, in
the best interest of the Company; however, such contacts should be
limited. Under no circumstance should invitations to such events be
solicited. Failure to comply
with this prohibition in any respect will result in disciplinary
action, termination of employment, or other corrective action determined legally
appropriate by
the Company.
Services
offered by a supplier may be accepted by an Employee when the need for the
services are associated with a business relationship and the supplier provides
the service to other customers and prospects as a normal part of its business,
(e.g., travel agency services). The services should generally be of
the type normally used by Employees and allowable on the travel expense
account.
If in
doubt as to the propriety of any gift or activity, it should be rejected as
being contrary to Company policy. in making this judgment, the
Employee must go beyond the question of whether the gift or activity would
influence an Employee in any way and should consider what unfavorable appearance
or interpretation might be placed on this action by a critical third party who
has the advantage of hindsight.
5.
Corporate Opportunities Converted to Personal Benefit
Employees
are prohibited from taking for themselves personally any business opportunities
that are discovered or learned through the use of corporate property,
information or position without the consent of the Board of
Directors. No Employee may use corporate property, information, or
position for personal gain, and no Employee may compete with the Company
directly or indirectly. Employees owe a duty to the Company to
advance its legitimate interests when the opportunity to do so
arises.
6. Fair
Dealing with Customers, Suppliers, Competitors and Others
Employees who make or are involved in making business decisions for the Company
must do so using consistent and unbiased standards. We seek to outperform our
competition fairly and honestly by gaining competitive advantages through
superior performance and each Employee should deal fairly with the Company's
customers, suppliers, competitors and Employees.
7.
Company Records and Preservation of Assets
Accurate
and auditable records of all Company financial transactions must be maintained
in conformity with generally accepted accounting principles.
Employees
are responsible for safeguarding and preserving Company assets and properties
under their control. Employees are also responsible for providing an auditable
record of financial transactions related to the use of these
assets. No "off-the-books" funds (e.g., side cash funds, reserves or
allowances) or transactions that are not documented in the Company's regular
accounting system are permitted. Guidelines are as
follows:
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1.
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The
use of Company funds or assets for any improper or unlawful purpose is
prohibited. Improper purposes include the use of Company time,
materials, assets or facilities for purposes not related directly to the
Company's business, or the removal or borrowing of the Company's property
without permission.
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2.
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All
assets, liabilities, revenues, expenses and transactions must be
accurately reported on the books of the Company, in accordance with the
Company's accounting procedures.
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3.
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No
false or misleading entries may be made in the books and records of the
Company.
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4.
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No
undisclosed or unrecorded fund or asset of the Company may be established
or maintained for any purpose.
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5.
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No
payment on behalf of the Company may be approved or made with the
intention or understanding that any part of such payment is being made for
any purpose other than that in the
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described
in the documents supporting such payment.
Dishonest
reporting or failure to disclose information that by law or by contract must be
disclosed is strictly prohibited by this Code and will not be
tolerated. Violation of these guidelines may lead not only to
termination of employment, but could also lead to civil or criminal liability or
monetary damages for Employees or the Company.
8.
Proprietary or Confidential Information
You must
not disclose any Company confidential or proprietary information, or
confidential information entrusted to you by the Company's customers, to anyone
outside the Company, except when disclosure is authorized by the Company's
President or counsel, or required by laws or regulations. Furthermore, such
information is to be used only in the Company's business. These
obligations apply whether or not you developed the information
yourself. You should also limit the disclosure of proprietary
information within the Company to those Employees with a "need to
know."
Proprietary
or confidential information subject to the foregoing restriction on disclosure
includes all non-public information that might be of use to competitors, or
harmful to the Company or its customers, if disclosed, such as information of
the type contained in patents, copyrights or trademarks, or held as trade
secrets. It also includes the business, financial, marketing and
service plans associated with products; designs, engineering and manufacturing
ideas, know-how and processes; Company business and product plans with outside
suppliers and customers; manufacturing performance data; unpublished financial
data and reports; information pertaining to acquisition and divestiture plans,
directional strategy, and competitive position; product test results; a variety
of internal data bases; and personnel and salary information.
9.
Compliance with Laws, Rules and Regulations
The
Company's goal is not just to comply with the spirit and letter of the laws,
rules and regulations that apply to our business, but also to endeavor to abide
by the highest principles of ethical standards and honor. This means
obeying the law, both in letter and in spirit. All Employees must
respect and obey the governmental laws, rules and regulations of the cities,
states and countries in which we operate. Although not all Employees
are expected to know the details of these laws, it is important to know enough
to determine when to seek advice from supervisors, managers or other appropriate
personnel.
10.
Public Communications
All
disclosures in reports and documents that the Company files with the U.S.
Securities and Exchange Commission (the "SEC"), as well as all other public
communications made by the Company, should be complete, fair, accurate, timely
and understandable.
11.
Insider Trading
On
occasion, Employees of the Company come into possession of non-public
information concerning the Company and its affairs. This information
about the Company comes to us so that we can do our jobs better, not so we can
benefit personally by using inside information in the stock
market. Disclosure of material non-public information is against
Company policy and knowledge of such information may not be used under any
circumstances for the Employee's personal benefit in the stock
market. Failure to observe these rules could potentially expose an
Employee to civil or criminal penalties. Material information means:
"any information concerning the Company that is not yet public knowledge, but
that, if publicly known, could reasonably be expected
to affect the price of the Company's stock, or is likely to be considered
important by a reasonable investor." The Employee's responsibilities
are twofold under SEC rules:
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1.
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Employees
cannot buy or sell Precision Aerospace Components, Inc. stock at any time
when he or she has material information about the Company that is not
known to the investing public.
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2.
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Employees
cannot tip off others to buy or sell Precision Aerospace Components, Inc.
stock on the basis of his or her material information that is not known to
the investing public.
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Similar
restrictions apply to trading in the stock of other companies on the basis of
non-public information an Employee may learn in the course of his or her
employment at the Company.
Limitations
on use of information obtained as a result of employment for personal gain is
not limited to transactions involving stock. For example, the
purchase of real estate near property that an Employee knows is being considered
for purchase by the Company constitutes a conflict of interest.
All
customer relations are maintained on the fundamental premise that sales efforts
are based on product quality and performance at an agreed
price. Accordingly, Employees are prohibited from attempting to sell
Company products and services, or to gain improper concessions for the Company
by giving any bribe, kickback, payment, gift, loan or special favor to
customers, except casual entertainment or items of nominal value. Any
form of indirect payment also is prohibited under this policy. A
legitimate use, however, of accepted sales techniques, such as employment of a
reputable, independent commissioned agent, is proper if done in accordance with
established Company policies and procedures and under terms by which the agent
is expected to adhere to the similar policies prohibiting improper payments or
actions.
Gifts,
favors and entertainment may be given to others at Company expense only if they
meet all of the following criteria:
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1.
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They
are consistent with accepted business practices and in a form that is not,
will not
appear to be, or will not be construed as, a bribe, kickback, payoff or
substantial benefit.
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2.
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They
are of normal value or intended for business use such as datebooks, or
desk calendars.
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3.
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They
do not violate any applicable law, regulation or generally accepted
ethical standard.
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4.
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Public
disclosure of the facts would not embarrass the
Company.
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5. |
The
cost is allowable under the applicable expense account
policy. |
The
recipient's policies regarding such gifts, favors and entertainment should be
respected.
Business
gifts, loans or favors to U.S. federal, state, or municipal employees are
strictly forbidden. Business gifts or favors to overseas customers
must conform to the Foreign Corrupt Practices Act, local law and Company
policy.
The
Company adheres to the letter and spirit of the Foreign Corrupt Practices
Act. This Act prohibits giving money or items of value to foreign
officials for the purpose of obtaining or retaining business from a foreign
government or influencing foreign legislation or regulations. The
Foreign Corrupt Practices Act further
prohibits giving money or items of value to any person or firm where there is
reason to believe that it will be passed on to a government official for this
purpose. The law also requires that accurate records and accounts be
maintained in reasonable detail and prohibits the establishment of off-the-books
corporate slush funds. The Foreign Corrupt Practices Act has severe
penalties, including fines and imprisonment. All matters pertaining to this
statute must be coordinated with the Company's President or
counsel.
13.
Political Contributions
Contributions
by the Company to federal candidates or political parties are prohibited by law
and may not be made. State and local laws often prohibit and restrict
contributions by corporate organizations. It is Company policy that
no contributions may be made at the state or local level that do not comply with
applicable law and without the written approval of the Company's President or
counsel. Laws regarding foreign contributions vary by country and no
contributions may be made except in compliance with applicable law, and with
written approval of the Company's President.
The
Company encourages its Employees to become involved in civic affairs and to
participate in political activities. Employees must recognize,
however, that their involvement and participation must be on an individual
basis, on their own time, and at their own expense. Employees may not
use any Company facilities, such as supplies, telephones, copy machines, or
Company letterhead in connection with political activities, candidates or
parties.
Unless
specifically directed by the Company, when an Employee speaks on public issues,
it must be clear that the comments or statements made are those of the
individual and not those of the Company.
14. Non-Discrimination
and Non Harassment
It
is the policy of the Company that all Employees should be able to work in an
environment free from all forms of unlawful discrimination and
harassment. The Company strives to comply fully with all applicable
local, state and federal laws and to manage its human resources and business
operations in ways that promote equitable and respectful treatment of Employees
and expects all Employees to follow this practice. The Company
strives to hire, recruit, train and promote Employees in job classifications
without regard to race, color, sex, sexual orientation, religion, age, national
origin, disability, veteran's status or other status protected under applicable
law. Personnel decisions such as compensation, benefits, transfers,
layoffs, return from layoffs, training, company-sponsored education, tuition
assistance, social and recreation programs will be administered without
discrimination. Only valid job requirements will be imposed for
promotional opportunities, so that promotion decisions are in accord with the
principles of equal employment opportunity and, as applicable, affirmative
action.
Sexual or
other unlawful harassment by any Employee(s) also is inconsistent with our
obligation to provide all Employees with a nondiscriminatory work
environment. It is also a violation of law. The Company
will not tolerate sexual or other unlawful harassment, whether by an Employee
toward another, by an Employee toward a customer or a supplier or by a customer
or a supplier toward an Employee.
Employees
of the Company are expected to know and follow the Company's policies on equal
employment opportunity, affirmative action, discrimination and
harassment. Copies of these policies are available in Employee
handbooks, on bulletin boards, or through Human Resources personnel at each
facility. Reports of discrimination or harassment should be directed
to the Employee's Human Resources Manager for prompt investigation and
appropriate corrective action. The Company's policies prohibit
retaliation against any Employee who raises a complaint of discrimination or
harassment in good faith.
15. Substance
Abuse
The
unlawful possession, use, dispensation, distribution, or manufacture of a
controlled substance is prohibited within any Company facility. Employees who
fail to comply with this policy may be terminated.
16.
Electronic Communications
All data
that is composed, transmitted or received via the Company's computer
communications systems may be considered to be part of the official records of
the Company and, as such, may be subject to disclosure to law
enforcement or other third parties. Consequently, Employees
should always ensure that the information contained in e-mail messages and other
transmissions is accurate, appropriate, ethical and lawful.
Computers,
computer files, voice mail, the e-mail system, internet access, and software
furnished to Employees are the Company’s property intended for appropriate
business use. Employee’s use of this equipment and systems may be
monitored at any time at the Company’s discretion and is subject to the
following requirements:
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1.
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All
software provided by the Company must be used in accordance with the
software license agreement of the vendor. Illegal duplication
of software and its related documentation is
prohibited.
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2.
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An
Employee's personal software, unauthorized, and undocumented software may
not be used on Company equipment or otherwise be accessible for use by
Employees without explicit
permission.
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3.
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Willful
infringement of a copyright and willful violation of a software license is
prohibited and may expose the Company and the Employee to substantial
damages, including criminal
penalties.
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4.
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All
use of Company electronic communications equipment and Internet access
must be consistent with Company policies, including without limitation
policies referenced in this Code.
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5.
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Information
maintained in, or distributed through, Company electronic communications
equipment must be consistent with Company policies, including, without
limitation, policies referenced in this
Code.
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6.
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Only
authorized Employees may establish or modify Company web sites or access
records, files, or equipment of
others.
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Copies of
Electronic Communications policies applicable at individual Company sites
supplemental to this policy, if in existence, may be found in Employee handbooks
or through the Human Resources Manager at the site. Failure to comply
with these policies in any respect will result in disciplinary action,
termination of employment, or other corrective action determined legally
appropriate by the Company.
17. Environmental
Responsibilities
The
Company recognizes the importance of protecting our natural environment and
conserving natural resources. The Company is committed to its
Employees, customers and the public to operate its business in a manner
consistent with environmental stewardship. Toward these ends, the
Company strives to meet or exceed the following policies in its operations and
in its business decisions:
The
Company operates its facilities in compliance with all environmental laws and in
an environmentally responsible manner;
The
Company minimizes its release of pollutants that may cause environmental damage
to the air, water or earth or its inhabitants;
The
Company minimizes the creation of waste, especially hazardous waste, recycles
materials whenever practicable and disposes of all wastes in a safe and
responsible manner and in compliance with applicable laws;
The
Company minimizes its use of toxic substances to the extent consistent with its
primary business purposes;
The
Company minimizes the environmental, health and safety risks to its Employees
and the communities in which it operates by employing safe technologies and
procedures and by being prepared for emergencies;
As the
Company develops generally applicable technologies for the control of pollution,
waste generation or the reduction in use of toxic substances, it will share its
knowledge to assist others in implementing similar technologies;
The
Company communicates openly with the public and its Employees regarding its
management of environmental matters.
Employees
of the Company are expected to know and follow this policy in the performance of
their individual duties. In addition, the Company encourages Employees to
identify and report to management any activities or conditions that may be in
conflict with this environmental policy. Any concerns related to
compliance with environmental laws or this environmental policy should be
reported immediately to the respective General Manager.
18. Compliance
with Antitrust Laws
The
objective of U.S. antitrust laws and State antitrust laws is to promote vigorous
competition in open markets. Violation of U.S. antitrust laws is a
serious offense and can result in criminal and/or civil penalties for business
entities or imprisonment and/or fines for individuals. An individual
who willfully violates the antitrust laws will receive no protection from the
Company. Failure to comply with the antitrust laws in any respect will result
in disciplinary action, termination of employment, or other corrective action
determined legally appropriate by the Company.
Generally
speaking, antitrust laws of the United States prohibit agreements,
understandings or actions whether oral or written, tacit or explicit, which
unreasonably restrain trade. Among the activities found to be clear
violations of the law regardless of the intentions of the parties involved ("per
se" violations) are any agreements or understandings among competitors to fix or
control prices; to boycott specified suppliers or customers; to allocate
customers, product, territories, or markets; or to control, limit or reduce
production or sales. Such agreements are against public policy and
against the policy of the Company.
Relations with
Competitors
The
antitrust laws prohibit any understanding whatsoever between competitors with
respect to price or any element of price (such as discounts or credit terms),
including price stabilization. Thus, agreements between competitors
to adhere to a specific formula for the determination of price, to restrict
production, or to communicate with each other with respect to their prices are
just as unlawful as an agreement regarding price itself.
In this
regard, Employees must not:
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1. |
Engage
in any discussions of such matters with representatives of other
companies.
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2.
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Exchange
information with competitors relating to prices or other terms or
conditions of sale.
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3.
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Attend
a meeting with a competitor at which such matters are likely to be
discussed.
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To avoid
even the appearance of possible infringement of antitrust laws, Employees are
encouraged to avoid unnecessary contact with competitors, even at social events
where matters involving business would not be expected to be
discussed. Employees are to report to their supervisor any instances
in which such discussions are initiated by other companies.
The
Company's relationships with its customers are also subject to a number of
antitrust statutes aimed at protecting its customers.
(a) Restrictive
Agreements The antitrust laws prohibit all understandings or agreements
that unreasonably restrain trade. In addition to the per se violations
outlined above, which are considered unlawful by themselves without specific
proof as to their effect, there are certain types of agreements between sellers
and buyers which, while not unlawful by themselves, fall into a danger
zone. They should not be considered or consummated without prior
consultation with the President of Precision Aerospace Components,
Inc.
(i) Refusals to Deal A
company generally has the right to select the customers with which it chooses or
refuses to do business. However, this is a right which must be exercised by
the company alone
without consultation with any other outside party.
(ii) Resale Restrictions A
basic tenet of the law is that a purchaser of a product has the right to do with
it as he chooses without restriction by the seller; thus, an agreement or
understanding by the seller and customer with respect to the prices at which the
customer will resell the product violates antitrust
laws. Restrictions on the area in which re-sales can be made can also
cause serious problems.
(iii) Tying Arrangements
Any arrangement under which a seller having a substantial market position in one
product coerces a
customer to take a product the customer does not want as a condition for
the sale of another product it does want constitutes a "tie-in"
sale. Such arrangements should be regarded as per se unlawful and
strictly avoided. The commingling in a bid of two products where the
commingled price is different from the price of the two articles purchased
separately should receive legal review. “Teaming” arrangements, by
which the Company and another party cooperate in making a bid to a customer, are
not unlawful but should also be reviewed in advance by the President or
counsel.
(b) Discrimination in
Pricing The Robinson-Patman Act prohibits sales of products of like grade
and quality at different prices to competing customers where the effect may be
to injure competition. To determine whether a Robinson-Patman problem
exists, an Employee should ask initially whether the Company has made sales (i)
at different prices; (ii) within a reasonably contemporaneous period; (iii) of
products of like grade and quality; (iv) to customers who were using or
reselling the product in substantially the same competitive
market. The Robinson-Patman Act is also applicable to
purchasers. It is unlawful to procure a price from a supplier on the
basis that the supplier must meet a competitive price which has not actually
been offered by another supplier.
Relations with
Suppliers
Reciprocal Dealing
The antitrust laws make reciprocal buying and selling illegal where a purchaser
with substantial buying power intentionally uses that power as a lever to make
sales of its products to its suppliers. The law does not prohibit our
purchasing products from companies that purchase from us. It does
prohibit
any understanding or agreement, whether written or oral and whether expressed or
implied, that purchases by one party are contingent upon purchases by the
other.
International
Transactions Certain U. S. antitrust laws also apply to international
operations and transactions related to imports to, or exports from, the United
States. Moreover, the international activities of the Company could
be subject to antitrust laws of foreign nations or organizations such as the
European Economic Community.
As with
other complex laws, it is important that legal advice be sought on any questions
regarding antitrust matters, particularly before entering into any agreement,
understanding or arrangement.
19. Bidding,
Negotiation and Performance of Government Contracts
The
Company will carefully follow the laws, rules and regulations that govern
acquisition of goods and services by the U.S. Government. In many
areas of business, the U.S. Government has rules of behavior that may be
different from acceptable commercial practices; for example, accounting,
timekeeping and recordkeeping, proposal and bidding procedures, pricing, and
quality.
We will
compete fairly and ethically for business opportunities with domestic and
foreign government entities. Employees involved in the negotiation of
government contracts should make sure that all statements, communications and
representations to customer and/or government representatives are
accurate. Care must be taken to properly report and charge all time
and costs to the appropriate account, regardless of status of the budget or
account. The falsification of time or cost records will not be
tolerated. Every supervisor is responsible for overseeing the prompt
and accurate reporting of employee time.
The
submission or concurrence in the submission, of any fraudulent documents (e.g.,
claims, bids, or proposals) by any Employee is strictly
prohibited. Such acts could result in criminal prosecution of the
Company and the Employee involved. Heavy civil penalties also can be
imposed. The Company is dedicated to developing, producing and
furnishing products of a high quality at a fair price. This
commitment can be accomplished only with continuing dedication to ethical
negotiation and adherence to contractual obligations.
20.
Protection of U.S. Government Classified Information
It
is Company policy and a contractual requirement to protect information which is
vital to the United States. U.S. Government classified information may be
received and maintained only at "cleared" facilities, locations specifically
covered by a Security Agreement. Please contact the Company's
President or counsel if you have any questions about applicable legal
requirements.
21. Compliance
and Discipline
Failure
to comply with the standards contained or referenced in this booklet will result
in corrective action that may include disciplinary action, termination, referral
for criminal prosecution, requirement to reimburse the Company for any losses or
damages or other measures determined appropriate by the Company. If
an Employee is charged with a violation of this Code, the matter normally will
be dealt with in a manner consistent with any grievance procedure or complaint
resolution process applicable in the Employee's worksite.
22. Questionnaire
At least annually, Company personnel
in sensitive positions must complete a questionnaire affirming their commitment
to the Code of Business Conduct and Ethics and disclosing violations of the
Code. Completion of this questionnaire will be requested by the Chief
Executive Officer of the Company and a report of responses will be made to the
Board committee designated with overseeing and enforcing this Code.
The annual questionnaire does not
relieve Employees of the continuing obligation to disclose relevant information
immediately and, whenever possible, in advance of any proposed
action.
23. Waivers
of the Code of Business Conduct and Ethics
This Code
has been adopted by the Company's Board of Directors and it applies to all
employees, officers and directors of the Company. Any waiver of this
Code, including any waiver with respect to the Company's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, may he made only by the
Company's Board of Directors or a Board committee designated with overseeing and
enforcing this Code. Any such waiver approved by the Board or
committee will be promptly disclosed to shareholders in compliance with the
relevant rules issued by the SEC or any exchange on which the
Company's stock is listed.
24. Problem
Solving
While
this Code aims to provide answers to Employees, it is impossible to address all
possible problems. Often a question presented to an Employee will not
have a clear-cut answer and may present difficult choices. As a
result, the Company encourages Employees to use the following steps to solve
problems regarding policy:
2. Determine
what specifically you are being asked to do.
3. Clarify
your responsibility and whether others should be involved.
4. Is
it legal?
5. Even
if it is legal, is it appropriate?
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6.
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Discuss
the problem with your supervisor or any other person identified in the
"Seeking Advice" section.
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25. Seeking
Advice/Reporting any Illegal or Unethical Behavior
The
Company wants to make sure that all Employees fully understand the Company's
Code of Business Conduct and Ethics and are able to seek
advice. Employees are encouraged to ask questions and seek advice
before acting, rather than after.
If you
are unsure of what a policy requires of you, if you are concerned that the
Company may be in violation of the law, or if you feel that a Company policy is
being violated, you should seek advice from your supervisor or a Human Resources
representative. If you are uncomfortable raising a question about
policy with your supervisor, or if you are not satisfied with the resolution by
your supervisor, you may contact any higher level manager, the Human Resources
Manager, the President of Precision Aerospace Components, Inc. or, if your
question or concern relates to accounting, internal accounting controls or
auditing matters, the Chairman of the Audit Committee of the Company's Board of
Directors.
Disciplinary
action will be taken against any Employee who retaliates, directly or
indirectly, or encourages other to do so, against an Employee who reports a
violation or suspected violation of the Company’s Code of Business Conduct and
Ethics. The Company wants Employees to communicate concerns or report
misconduct without fear of retribution. It is your responsibility to
report misconduct if you become aware or it.
26. Administration
of the Code of Business Conduct and Ethics
The Code was adopted
by the Board of Directors on
August 7, 2008. The Board of Directors shall
be responsible for the administration and enforcement of this Code, but may
delegate responsibility for administration of the Code to a committee of the
Board. The Board (or a Board committee designated with overseeing and
enforcing this Code) shall take reasonable steps to monitor and audit compliance
with the Code, including establishment of monitoring and auditing systems
reasonably designed to detect violations of the Code by
Employees. The Board (or a Board committee designated with overseeing
and enforcing this Code) shall periodically review the Code and recommend
changes when desirable or necessary to (i) ensure continued compliance with
applicable rules and regulations, and (ii) make certain that any weaknesses
revealed through monitoring, auditing and reporting systems are eliminated or
corrected.
No
amendments or changes to the Code shall be made by anyone other than the Board
of Directors of the Company (or a Board committee designated with overseeing and
enforcing this Code). Amendments to this Code shall be publicly disclosed in
compliance with rules of the New York Stock Exchange and applicable law, rule
and regulation.
A copy of
the most up-to-date version of the Code shall be posted at all times on the
Company's website and intranet, and the Company's Internet address and the fact
that the Company has posted this Code on its website will be disclosed in the
Company's annual report. In addition, a copy of the most up-to-date
version of the Code will be made available in print to any Company shareholder
who requests it, and this availability of the Code will be stated in the
Company's annual report.
27. Non-Exclusivity
This Code
of Business Conduct and Ethics is not the exclusive set of policies and
procedures of the Company. You are expected to comply with all
policies and procedures applicable to you, whether or not set forth or
referenced in this Code. Further, remedies for noncompliance
with this Code of Business Conduct and Ethics are not exclusive and references
to possible actions set forth herein shall not limit the Company's options in
addressing noncompliance. Mention of a remedy upon a failure to
comply in any one instance shall not limit the applicability of all remedies to
all circumstances of non-compliance.
