codeofconduct

QA11I have been asked to serve on the board of a nonprofit organization. Isthat a problem?You must consult with your supervisor. Your board activities should notconflict with your working time and you should not use corporateresources to communicate with others in your capacity as an outsidenonprofit board member. Positions on for-profit company boardspresent additional risks and will require additional review andpreapprovals. 

Chapter 4.2Gifts, Gratuities, and EntertainmentWe pride ourselves on building strong relationships with customers,suppliers, government officials and other business associates. At times,and where allowed by law, it may be appropriate to exchange modestgifts or entertainment. Good judgment and common sense are alsocritical in determining the appropriateness of a gift or entertainment.Avoid any relationship that could give the appearance of impropriety orotherwise affect or influence your ability to make good businessdecisions. Offering, giving, soliciting or receiving any form of bribe orkickback is strictly prohibited.  Gifts are defined very broadly and can include anything of value, suchas cash or cash equivalents, travel, transportation, lodging, meals,drinks, entertainment, use of company materials, facilities or equipmentnot available or offered to the general public, employment offers, apromise of future business opportunities, scholarships and charitablecontributions.As a general rule, do not provide or receive anything of value orgive special treatment of any kind, to or from any individual,organization or government official that seeks to conduct orconducts business with the company, or that competes with orregulates the company unless: It is lawful, ethical, of limited value and supports a valid business purpose. It creates no real or perceived business obligation. Public disclosure of the transaction would not embarrass the company. Proper approval is received.The following also applies when giving or receiving anything ofvalue: No gifts of cash should ever be given or accepted.   No gift cards, certificates or other cash equivalents should ever be given or accepted including those only redeemable for in- store merchandise. Exchange options exist which could result in the recipient exchanging the gift for an alternate preference or even convert the gift to cash. Exceptions may be appropriate in limited circumstances and are permitted only when the pre- approval requirements of your Koch company have been met. This exception does not apply to government officials in the U.S. or to foreign government officials outside the U.S. Do not solicit anything of value from any customers, suppliers, government officials or business associates. Any improper request for anything of value from any customers, suppliers, government officials or business associates must be reported.   Giving or receiving anything of value must be approved by an employee’s supervisor if the value, given or received, exceeds U.S. $100.    When providing anything of value, it must be limited to those directly responsible for the business at issue unless the participation of others is reasonably necessary for the legitimate business purpose of the expense.

Giving or receiving gifts, entertainment or other gratuities is likely to require documentation on your part. Giving or accepting gifts may also result in taxable income to you and/or the recipient. You should ensure that you understand such requirements and take appropriate action.Ethical dealings with the government or a state-owned enterprise,requires following guidelines, especially when providing anything ofvalue to a government official. Additional government interactioninformation, including the definition of “government” is located in thesection of this Code on Government Interaction. Do not authorize, offer,provide, or deliver anything of value, either directly or indirectly, for thepurpose of rewarding or improperly influencing any political official orgovernment official, or their contractor or agent.The following additional requirements apply: Government officials and state-owned enterprises in some jurisdictions may be subject to specific gift limitations well below the U.S. $100 limit. Pre-approval, documentation and tracking requirements of your Koch company must be followed when providing anything of value to a government official.  Non-U.S. government officials or employees of state-owned enterprises outside of the U.S. are subject to the independent review requirements of your Koch company, when providing anything of value.The requirements associated with providing anything of value,especially to a government official or employee of a state-ownedenterprise, can be complex and may require the involvement of yourcompliance and ethics resource, Government & Public Affairs office orLegal. You should ensure that you understand these requirements andtake appropriate action.Additional information pertaining to corruption and commercial briberyis located in the section of this Code on Anti-corruption andCommercial Bribery.Tag_Set_D

QA1Is the U.S. $100 approval limit on gifts an annual limit?No. The limit relates to the value of gifts given at any one time.However, frequent gifts to or from one individual would likely violate thepolicy.

QA2One of the vendors we used to work with is having a charitable event.May I attend if I pay for the event with my own money? What if I win aprize; may I accept it?Generally, yes, but you should advise your supervisor to ensure thatthere is not even an appearance of impropriety. Generally, you couldaccept the prize. However, the issue should be raised withmanagement to avoid any potential conflict of interest issues.

QA3May I accept an offer to vacation with my family at a customer’smountain condominium even though the customer will not be present?Since you are not going to be with the customer to discuss business orotherwise further your relationship, there probably will not be asufficient business purpose to justify the offer. You may pay thecustomer fair market value for the condominium after seeking approvalfrom your supervisor or your compliance and ethics resource.

QA4What if my customer is offended that I cannot accept a gift that is overthe U.S. $100 limit?Usually a polite explanation that company policy prohibits you fromkeeping the gift will be sufficient.

QA5May I accept a business meal from a customer or supplier?You may let a customer or supplier pay for a meal arranged for thepurpose of discussing business. However, it probably is not appropriateto let customers or suppliers repeatedly pay for your meals.

QA6I’m responsible for securing temporary help through outsideemployment agencies. One of the agencies sent me a gift during theholiday season. May I keep it?You may accept the gift if it meets each of the following tests: it isunsolicited; it is less than U.S. $100; it is not cash or a cash equivalent;and it will not influence or be perceived as influencing your businessjudgment. If you are unsure, discuss the situation with your supervisoror compliance and ethics resource.

QA7One of my customers has invited me to attend a three-day conferencesponsored by his company at a major resort. The conference agendaincludes some business activities but also provides for leisure activities.May I accept the invitation to attend at the customer’s expense?Suppose the same invitation came from a supplier; could I accept?In either case, you should only attend if there is a reasonableexpectation that your attendance will create value for your business,that the event is typical of your industry and your supervisor approvesin advance. Participation at such conferences can help build goodcustomer or supplier relations. Participating in events that do notpresent significant business opportunities is inappropriate.

QA8My spouse and I have been invited by a supplier and his spouse to jointhem for a weekend golf outing. Is it acceptable for my spouse toattend?There must be a reasonable expectation that some business benefit tothe company will result. You and your spouse’s travel andentertainment should be treated as a gift and if the value of the tripexceeds U.S. $100, approval must be received prior to youracceptance.

QA9Are the Gifts, Gratuities and Entertainment requirements different whenentertaining an employee of a government agency or state-ownedenterprise?It depends. Providing anything of value, such as “entertaining,” must beconsistent with applicable laws in the relevant countries, meet therequirements of the Gifts, Gratuities and Entertainment section of thisCode and any additional requirements imposed by your Koch company.If you have any questions, seek the advice of Legal before takingaction.  

Chapter 4.3Resolving Conflicts of InterestIf you think that you may have a conflict, real or perceived, report allrelevant details to your supervisor, compliance and ethics resource orLegal. Most conflicts of interest can be resolved in a mutuallyacceptable way, but they must be addressed.

Chapter 4.4Insider and Personal TradingIn the course of your everyday work, you may gain confidentialinformation regarding the business of the company or third-parties,such as customers, suppliers, acquisition targets or ventureparticipants.The company and its employees are prohibited from buying, selling orotherwise transferring securities of an issuer while in possession ofmaterial, non-public information relating to that issuer, or its securities.In addition, you must not “tip” other people; that is, you must notdisclose such information to others. If others act on the information youprovide, you could both be violating the law and subject to severepenalties.Your awareness of material, non-public information at the time youpurchase or sell a security of an issuer may be enough to violate insidertrading laws. It may not matter whether you actually use the informationin making the purchase or sale.Some examples of “securities” are: Shares of corporate common or preferred stock, a limited partnership interest or other forms of ownership. A bond, such as a corporate bond. A derivative, such as a future, option, warrant or swap relating to a corporate common stock.“Material” information is generally regarded as information that areasonable investor would consider important in deciding to buy, sell orhold a security. Either positive or negative information may be material.Some examples of possible material information include: Projections of future earnings or losses. Information regarding a potential or proposed merger, divestiture, acquisition or venture. Changes in key management. Significant new products or discoveries. Impending bankruptcy or financial liquidity problems. Major litigation. Gain or loss of a substantial customer or supplier. Significant changes in credit rating or credit status.Information is considered “non-public” until it has been effectivelydisclosed to the investing public and enough time has passed for theinvesting public to be able to evaluate the information.If you violate the laws regarding insider trading, you and others that youdisclose information to may be subject to severe criminal and civilpenalties, including substantial fines and imprisonment. In addition, youmay expose the company to considerable fines.Personal Trading RestrictionsIn addition to observing the insider trading laws, you must observethe following restrictions in your personal trading activity:

Do not buy, sell or otherwise transfer securities of a particular issuer, such as corporate stocks or bonds, if you have been informed that transactions in the securities of that issuer are prohibited. Do not buy, sell or otherwise transfer any physical commodity, future or derivative of a physical commodity that has been prohibited by your Koch company. Personal trading must not create a conflict of interest, such as trading securities of a key customer, competitor or supplier of your Koch company.These restrictions also apply to your family members and others wholive in your household. You are expected to ensure that they comply.These restrictions also apply to any account over which you havecontrol or discretionary trading authority, even if that account is not inyour name. If you are designated as an Employee with Access toSensitive Information, you must follow the pre-trade clearancerequirements of your Koch company.

QA1I’ve become aware of a proposed venture between the company and apublicly traded company. It hasn’t been publicly announced. May Itrade in the other company’s securities or pass along the information tosomeone else?No. Since you are aware of material, non-public information about thepublicly traded company, you must not trade in any security of thatcompany or pass along such information to anyone else.

QA2I’ve become aware of financial information about one of our customersthat indicates the customer is in better financial condition than mostpeople realize. I want to purchase stock in the customer’s company.May I do so?No. You may not purchase this stock until the financial information isknown to the investing public. The information may have beenentrusted to us in confidence by the customer to help us determinehow to best meet the customer’s needs. Using this information forpersonal gain or disclosing it to others would violate insider tradinglaws as well as our policies regarding the use of confidential andproprietary information.

QA3I work for a subsidiary of the company and have learned that thecompany will announce an acquisition of a publicly traded companynext week. May I purchase stock of the public company before theacquisition is disclosed to the investing public?No. Your awareness of the expected acquisition would be material,non-public information, and you may not trade in any security of thatcompany or pass along such information to anyone else.

QA4I would like to purchase a security of a major customer of my businessgroup. May I purchase the security of the customer for my personalaccount?If you are aware of material, non-public information relating to thecustomer, in addition to violating company policies, you could beviolating the insider trading laws if you purchase the security of thecustomer. If, however, you are not aware of material, non-publicinformation relating to the customer, you might be allowed to purchasethe security of the customer if it does not create an actual or perceivedconflict of interest. Questions regarding conflicts of interest should bedirected to your compliance and ethics resource or Legal.

Chapter 5\"Achieving EHS excellence is not easy, but it is essential for our survivaland success. By EHS excellence we mean going beyond compliance toensure that we’re keeping people safe and protecting the environment.The highest priority must be placed on risks that could cause the mostserious harm to people, the environment or the business.\" —CharlesKochEnvironmental, Health and Safety Excellence

Chapter 5.1Environmental, Health and Safety ExcellenceOur companies worldwide will manage all aspects of business in a waythat protects the health and safety of people, protects the environmentand creates long-term value for customers, the company and societywhile complying with applicable laws and regulations. By applyingMBM® and through the use of good practices, we will pursue a goal of10,000% compliance, zero incidents and Environmental, Health andSafety (EHS) Excellence.Fundamental Expectations of Employees: Place protection of health and safety and the environment first, no matter how urgent the job. Never accept noncompliance, unsafe behaviors or unsound environmental practices for the sake of production or financial objectives. Seek an understanding of the key EHS risks of his or her role, and the best knowledge regarding EHS issues. Compliance with applicable regulations, requirements and job procedures. Report all incidents and near misses, raise concerns and challenge the status quo in order to prevent incidents and drive continuous improvement in EHS performance. Report any EHS issue that he or she believes has not been appropriately resolved, even if it means raising it with another available resource as described in chapter one of this Code. Full commitment to these EHS expectations and engagement in achieving this level of performance, throughout the organization.Any employee who knowingly violates applicable environmental, healthand safety policies, laws or regulations will be subject to disciplinaryaction, up to and including dismissal.Fundamental Expectations of our Companies: Place protection of health and safety and the environment first, and equip employees to work effectively in the workplace. Require the same level of performance from contractors, vendors, visitors and other third-parties in our facilities as we do from our employees. Identify and manage EHS risk, placing the highest priority on those which could cause the most serious harm to people, the environment or the business. Integrate consideration of EHS performance into all business and product planning decisions. Utilize materials, natural resources and energy efficiently to increase value and reduce environmental impact. Respond in a timely and appropriate manner if an EHS incident does occur; learning from incidents and taking action to prevent such incidents in the future. Audit and assess our performance and practices regularly, and take appropriate actions where needed to continuously improve our EHS performance. Engage employees, customers and suppliers, government officials, communities, and non-government organizations to

advance effective approaches to health and safety, and environmental protection. Ensure all products are manufactured and placed on the market in a manner that is compliant with applicable laws, regulations and relevant standards of safety for customers, consumers, employees and the environment.Tag_Set_H

QA1I am aware of a local law, applicable to the location where I work, that Ido not believe we are complying with. I have talked to a few coworkersabout my concern and their point of view is that the law is out of touchwith today’s manufacturing process, other companies in the region donot comply with it either, and it is rarely enforced by the regulators sowhy bother complying with the law. Are my coworker’s views alignedwith what the company expects?No. The company’s expectation is to comply with all applicable legalrequirements. Our commitment to compliance does not rely on howother companies manage their compliance obligations or the extent ofenforcement activity. You must raise your concern using one of themany options available to you so the appropriate resources can assistin evaluating the circumstances and help make a determination thatmeets the company’s expectation.

QA2I work at a small facility and I am aware of a safety issue that may costa lot of money to fix. I am afraid the plant will not be profitable if wehave to spend the money. Should I still report the issue?Yes. Report the issue using one of the many reporting options availableto you. Protection of health, safety and the environment must comefirst, no matter what. Safety is more important than profits.

QA3I work in a high noise area and some of my coworkers refuse to weartheir required hearing protection. I don’t want to be a trouble-maker, butI am concerned about them. What should I do?Share your concern with your coworkers and encourage them to wearthe required hearing protection, if you feel comfortable doing so. Notwearing required hearing protection or any other required personalprotection equipment is a violation of our policies and possibly the law.You should also use one of the many reporting options available to youso the company can understand the issue. Maybe the hearingprotection is uncomfortable and needs to be redesigned, or maybeadditional training is needed.

QA4We just implemented some new safe work practices. I have been doingthis kind of work for more than 20 years and have never been hurt. Whydo I have to change the way I do things?The company values your safety. The company is not trying to makeyour job harder. The procedures are necessary to identify hazards andreduce risks so that you and your coworkers are protected, and toensure compliance with regulations and our EHS Policy. Everyone mustfollow the procedures, however if you have concerns about them or ifyou think you can improve them, talk to your supervisor or your localsafety professional.

QA5Are you really serious about 10,000% compliance? What about “minorpaperwork” violations that do not really harm the environment?Our expectation is 100% of employees fully complying 100% of thetime. This includes all legal and regulatory requirements, no matter howinsignificant they may seem to you. “Paperwork” violations can result insignificant civil and criminal penalties for you and the company. 

Chapter 6\"We believe communities and governments are more likely to allowcompanies to grow and prosper when those firms are leaders in EHSand other regulatory compliance. Everyone benefits when new andbetter jobs are created by practicing Principled Entrepreneurship™.\" —Charles KochInteractions with the GovernmentWe are obligated to know the applicable laws and ethical standards ofa government with which we deal. These laws and standards may bemore rigorous than those that apply to our non-government customersand suppliers. In general, these laws are intended to assure accurate,timely and complete disclosure to the government, and thatinteractions with the government are conducted in an ethical manner.All communications and information provided to a government must beaccurate, timely and complete. Never engage in misrepresentation,misstatement or omission of material fact, and avoid even theappearance of impropriety when dealing with government agencies ortheir officials, employees or contractors. Payments or providinganything of value for any purpose to a governmental entity or officialmust be recorded in accordance with the company’s policies andpractices. This applies to payments provided directly by the companyand also to payments provided on behalf of the company by an agentor representative.Violations of these requirements can lead to criminal and/or civil liabilityfor the company and the individual.

Chapter 6.1Interactions with the GovernmentThe definition of “government” can be very broad, including: Officials or agencies that one may readily identify as the government, such as members of the legislature, the judiciary, the executive branch or administration, or other elected or appointed political leaders and their respective staff. Municipalities and their emergency responders, such as law enforcement, fire departments and emergency medical services. In some circumstances, relatives of government employees. Non-government agents acting on behalf of the government agency. Primary contractors operating on behalf of or under contract to a government agency. Public or state-sponsored hospitals, universities or research organizations. Government “instrumentalities,” including officers and employees of companies under government ownership or control.The law may consider interactions with employees of government-owned companies as government interactions; even if the companiesare operated like privately-owned corporations or the employees do notbelieve themselves to be agents of the government.Tag_Set_D

Chapter 6.2Government Submittals andCommunicationsGovernment submittals and communications may include oral orwritten statements made to government officials or other writtenreports or statements that are prepared in response to a governmentrequirement or request.If you or an agent or representative of the company haveinteraction with a government entity or its representatives: Ensure that all documents and reports are accurate, timely and complete. This includes all supporting documentation that may be required. Disclose immediately to your supervisor any misstatement, misunderstanding, material omission or other mistake, whether intentional or unintentional, so that the issue can be resolved in accordance with the law and company policy.You must be authorized by appropriate management to represent thecompany in government submittals and communications. If you are notspecifically authorized to submit information to the government, you donot have authority to take such action.Government submittals and communications may include: Making commitments to the government on behalf of the company. Certifying compliance. Agreeing to permitting, operating or other business conditions not already prescribed by law.Tag_Set_C

Chapter 6.3Government ContractsContracting and commercial relationships with government entities ismaterially different from contracting with other entities. In commercialcontracting, the parties have, within certain limits, the power to fashiontheir own terms, conditions and remedies. This is not the case withcontracts between private parties and government. Governmentcontract terms, conditions and remedies are largely established by law.For these reasons, only certain individuals in the company areauthorized to negotiate or enter into a contract with any governmententity.It is unlawful to make any untrue statement or unsubstantiated claim toa government official, to collude in bidding or to request payment forwork not performed. There may also be additional requirements fordocumentation or performance certification that are defined by law andnot stated in the terms of the contract. In addition, you must be alert forgovernment contracting requirements or terms and conditions that mayflow down from a primary contractor of the government to the companyas a subcontractor. It is also unlawful to offer gratuities or inducementssuch as future employment, trips or even meals to public officials whenthe offer may influence or be intended to influence a public official inperforming official duties.If you have reason to believe that an employee has engaged in any ofthe behavior described above or has otherwise violated the terms of agovernment contract, contact your supervisor, a compliance and ethicsresource, Legal or the GuideLine. 

Chapter 6.4Political InvolvementThe company encourages us to exercise any right we may have to voteand participate in the political process. If you are involved in politics,you must be sure to express your views as an individual, not as arepresentative of the company. In general, involvement in personalpolitical activities or donations must be on your own time, at your ownexpense, without the use of company supplies or facilities. Companyreimbursement of an employee’s personal political contribution isprohibited. Like all responsible citizens, the company may participate in thepolitical process. However, corporate political participation is highlyregulated and complex. Therefore, using corporate resources for, ormaking corporate payments to, any political party, candidate orcampaign may occur only if permitted by law and approved in advanceby a compliance and ethics resource, Government & Public Affairs orLegal. This includes visits to company locations by candidates runningfor public office. Tag_Set_D

QA1A friend of mine is running for local political office and I’d like to helphim out in his campaign. There’s no problem with this, right?Right. Your personal support is your personal business. Just make surethat you don’t use company resources, such as office equipment orsupplies, your company working time or the company’s name toadvance the campaign.

QA2I am thinking of running for a public office in my community. Is thatacceptable?If you intend to serve on or run for a public office, be sure to contactyour supervisor and compliance resource who will assist you in gettingthe appropriate reviews and approvals, as allowed by local law, toensure no conflicts of interest exist and ensure you receive theappropriate guidance and training, and that all reporting requirementsare adhered to. 

QA3The mayor of the town I live in has asked me to serve on a special taskforce to study transportation issues and priorities. Is that acceptable?If you intend to serve on a government board, commission or task forceof any type, such as public-financed school board, college or universityboards, or city planning commissions, be sure to contact yoursupervisor and a compliance and ethics resource who will notify theappropriate resources in Government & Public Affairs and Legal. Thesegroups will coordinate a review to ensure that any potential orperceived conflicts of interest are reviewed, that you have or will receivethe appropriate guidance and training, and that all reportingrequirements are adhered to.

Chapter 6.5Lobbying (Advocating Government Policy)Lobbying activities can include direct and indirect interactions withgovernmental agencies or their officials or employees that are intendedto influence current or future government action. Such activities arestrictly regulated in most countries, as well as in many states, provincesand localities. The company will engage in lobbying activitiesconsistent with our philosophy and our Guiding Principles and inaccordance with the law. Such activities must be authorized andguided by a compliance and ethics resource, Government & PublicAffairs or Legal.Tag_Set_D

QA1My cousin is mayor of our town and we meet every Sunday for a familydinner. She often inquires how she can help the company. When doessomeone become a lobbyist?It depends on the local and/or state laws, which vary greatly withrespect to what type of contact with a government official constituteslobbying. Seek guidance from a compliance and ethics resource,Government & Public Affairs or Legal.

QA2I communicate with federal and state agency employees on policyissues affecting the company, but I don’t talk about pending legislation.Am I a lobbyist?Federal and state lobbying laws apply to contact with certain executivebranch officials and employees on many subjects, including laws,regulations, or government policies and programs. These laws alsomay apply to certain activities relating to those contacts, likebackground research. Seek guidance from a compliance and ethicsresource, Government & Public Affairs or Legal.

Chapter 7\"A positive reputation is built by behaving consistently with soundprinciples, creating real value, 10,000 percent compliance and living upto commitments. We do not act this way just because it may berequired or is beneficial. We act this way because it is the right thing todo.\" —Charles KochConducting Commercial Activity Lawfullyand with IntegrityThis Code addresses some of the key areas of law that govern ourcommercial activity; however, the Code is not intended to address allthe laws that may apply to our activities, nor does it necessarily providecomplete guidance for those areas of law covered. You should alwaysensure you understand the law and business requirements that apply toyour role.

Chapter 7.1Anti-corruption and Commercial BriberyMost countries where we conduct business have enacted strict anti-corruption laws and regulations and international anti-corruptionconventions. It is company policy to fully comply with the United StatesForeign Corrupt Practices Act, United Kingdom Bribery Act, BrazilianClean Companies Act, and all other applicable anti-corruption laws.These laws generally forbid soliciting, accepting, offering, providing orapproving to provide anything of value to anyone, either governmentofficials or business associates or their immediate family members forthe purpose of improperly obtaining or retaining business, or gainingany improper advantage or influencing a person to perform their dutiesimproperly or to reward any such conduct. These laws apply to the company and its employees but, in certaincircumstances, we can also be held responsible for the actions of ouragents and representatives.Facilitation PaymentsFacilitation payments are prohibited except under emergencycircumstances. Emergency circumstances only exist when there is areasonable belief that there is imminent jeopardy of serious bodily harmand no other prudent alternative is available, or a necessary means tosecure governmental services in response to a safety or securityemergency. In addition, facilitation payments are often illegal underapplicable local law and can carry significant legal risk.Never: Offer, promise, make or approve any unauthorized payment (cash or otherwise) to a foreign government official. Induce a government official to do something illegal. Establish an unrecorded fund for any purpose. Issue a payment without accurate documentation. Make a false entry in company finance or accounting records. Induce someone else to violate these rules or look the other way when there might be a violation. Do business with an agent, partner, distributor consultant or other representative who may deal with foreign government officials or employees of state-owned enterprises on behalf of the company without proper vetting and documentation before appointment. You must ensure they understand our company’s expectation to behave ethically and in compliance with these laws.If you learn of a payment made or requested that might be in violationof any country’s anti-corruption laws, immediately report your concernsto one of the many options available to you.Additional requirements may be applicable as described in the sectionof this Code on Gifts, Gratuities and Entertainment.Tag_Set_D

QA1I have been interviewing candidates for an open role in China. Amanager at the plant is recommending I hire a certain individual. Theyhave indicated to me that this individual would provide additional valueto the company because the individual is the adult child of a high-ranking Chinese government official. Should I be concerned?Yes. The hiring of this individual could be seen as a form of bribery andin violation of anti-bribery laws, which forbid offering or giving anythingof value, directly or indirectly, to a foreign government official for thepurpose of obtaining or retaining business, or for any improperpurpose. You must immediately report your concern to one of the manyoptions available to you.

QA2I was told that I could hire a consultant to assist us in obtaining acontract with a foreign government-owned company. He requested aU.S. $40,000 retainer and said that he would use the money to “helpget the job done.” Since we don’t really know where the money isgoing, do we have to worry about it?Absolutely. Our company requires us to take steps to help ensure thatthis money is not used as a bribe or any other improper purpose. Youmust seek the advice of Legal.

QA3Suppose we have a shipment stuck in customs abroad and ourcustoms broker suggests that we just pay a local customs official U.S.$250 to expedite the process. Can we make this payment?No, the payment is very likely to be unlawful under the local country lawand U.S. laws. You must inform Legal when any such payments aresuggested and prior to responding or taking any action in response.

Chapter 7.2Antitrust and Competition LawsOur fundamental market-based philosophy strongly supports freemarkets. We believe free competition in the marketplace benefits all ofus as consumers. Antitrust and competition laws exist to protect freeand fair competition. We succeed by the economic means because wesuccessfully compete in the marketplace — we provide customers withoutstanding value for their money.In general, it is illegal for competing companies to formagreements that unreasonably restrain trade.  Therefore,employees must never agree with competitors: To fix prices or other terms of sale or of purchase. To allocate or divide customers or markets. To limit products or services. On competing bids or solicitation of contracts. To boycott a customer or supplier.Antitrust laws also cover agreements that may restrict labor practices.You must not agree to not hire employees from other organizationsunless that agreement is with a service provider under a contract thathas been reviewed by Legal.An action does not always have to be written or even spoken to beconsidered an agreement for antitrust purposes. In some cases, non-verbal actions, such as saying nothing when inappropriate items arediscussed between competitors, can be misconstrued as anagreement.Other types of conduct that may be illegal in some cases, andrequire prior review by Legal, are: Total requirements contracts. Agreements to set wages, benefits or salaries. Exclusive dealing arrangements. Tying or bundling together different products and services. Charging similarly situated customers different prices for the same products at similar times and for similar volumes. Non-competition and non-solicitation agreements. Directly soliciting wage information from competing employers.Never discuss with competitors such things as prices, sales or otherdiscounts, who will serve what markets or any other commercial matteron which the parties compete. In circumstances where contact withcompetitors does occur, such as trade associations, limit discussionsto permissible subjects. Before attending any meeting wherecompetitors will be present, be sure to know the antitrust rules well.Always be prepared to state your objection and walk away frommeetings and discussions if an inappropriate discussion occurs.Antitrust and competition laws are vigorously enforced. You mustcontact Legal immediately if you believe any employee has hadinappropriate contact with a competitor, or a competitor has made aproposal that is inappropriate under competition laws.Tag_Set_M

QA1In developing our marketing strategy, it helps to have as muchinformation as we can get on what our competitors are doing. Is itacceptable simply to call our competitors and ask for their price lists orinformation about their production costs?No. You should get “competitive information” from the marketplace,such as customers, suppliers and public sources, not fromcompetitors. Any “benchmarking” studies where information will becollected from or given to a horizontal competitor, including acompeting employer, must be approved by Legal. This is true whetherthe study is conducted internally or through a third-party.

QA2Our competitors are often either our customers or our suppliers. Whatdiscussions with competitors are proper in a buyer-seller context?Genuine buyer-seller discussions are appropriate. For example, youmay provide a competitor who is a potential customer for a productwith information about that product. Take care to limit discussions witha competitor to the products or services you are buying or selling. Ifpossible, limit who participates in the discussion, for example companysales representatives should not be a part of most purchasingdiscussions. You should not talk about resale prices, margins or whichone of you will sell to particular customers. It is a good idea to checkwith Legal before dealing with any customers or suppliers who are alsocompetitors. Also, consult with Legal before sharing information aboutor from your customer or supplier with another Koch company thatcompetes with that customer or supplier.

QA3A competitor tells me that “we’re killing each other by trying to takeaway each other’s long-standing customers with low prices.” Shesuggests that both firms will be better off if they stick to their owncustomers. I think that she may be right. How should I respond?You must not enter into agreements or understandings withcompetitors to allocate customers, territories or product lines. Suchagreements, like price-fixing agreements, can result in criminalprosecution. Even suggestions to competitors to fix prices or allocatecustomers may result in a criminal investigation. Any offer to participatein such an agreement must be immediately and clearly rejected.Immediately contact Legal to report the competitor’s request.

QA4Next week I am attending a trade association meeting wherecompetitors may be present. If the talk turns to the state of the marketand where people expect prices to go, is it acceptable to participate inthe discussion?You should not participate in or remain at a trade association meetingof competitors at which current or future pricing, supply or capacity arediscussed. Clearly voice your objection to such discussions, leave themeeting if the discussion continues despite your objection, and reportthe incident to Legal. There might be instances at larger trade showswhere independent third-parties, such as consultants or industryanalysts, may permissibly make such presentations, provided they arespeaking for themselves and not on behalf of any competitive producer.Your Koch company may have requirements, such as training or pre-approval, prior to attending a trade association meeting. Contact yourcompliance and ethics resource or Legal if you are unsure what yourKoch company’s requirements are.

QA5How about if the association, of which we are a member, wants tocollect historical information from members; can we participate?There are permissible ways for associations to collect historical data.Contact Legal for guidance before providing any company commercialdata to an association.

QA6My neighbor owns a small business in the same town in which I’m aplant manager. He commented last night at a neighborhood party thatthe price of entry-level workers in our town is out of control. He askedme if we’d agree to start our people at the same rate. Can we do that?No. Just as you cannot agree to fix sale prices, you also cannot agreeto set prices on goods or services we purchase with those whopurchase similar goods or services. Wages, salaries or benefits are allconsidered parts of the overall purchase price for labor services.