Regal Code of Conduct

THECODE OFBUSINESSCONDUCTAND ETHICSwww.regalbeloit.com

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CONTENT 03Message from Mark 04Why We Have a Code of Business Conduct & Ethics 06Compliance with Legal Requirements; Conflicts betweenLaw and the Code 06Our Responsibilities 07Reporting 08No Retaliation 09Violations 09INTEGRITY 12 13Protecting Our Assets 14Company Information 16Company Books and Records 17Document and Records Management 18Intellectual Property Rights 19Insider Trading and Stock Tipping 19Communications with Media and Public Reporting 20Social Media 21Avoiding Conflicts of Interest 22Giving and Receiving Gifts and Hospitality 22Gifts 23Entertainment 23MealsGifts, Entertainment and Meals with the Government 26 27HIGH ENERGY 27 28Fair Employment Practices 29Safe Work Place 30Substance-Free Workplace 31Violence-Free WorkplaceEnvironment, Health, Safety, and Sustainability 34Supplier Relationships 35Personal Data Privacy 37 38PERFORMANCE 39 40Product Safety and Quality 41Fair Competition 43Working with GovernmentsAnti-Corruption ProgramPolitical Contributions and ActivitiesInternational Trade ControlsMoney Laundering and Corruption PreventionIntegrity Alert Line

04 Message from Mark At the core of our company is a strong culture characterized by values of Integrity, High Energy and Performance. Our Code of Business Conduct and Ethics expresses these three values and is at the heart of all of our actions, wherever we do business. While our business can change with new products, acquisitions, locations and people, our core values and this Code will always remain our guide for proper behavior. By understanding and following our Code, we can help ensure our long-term success. Just as our company grows and changes to meet new demands, our Code must grow and change too. In response to changes and the growth of our company, we have updated our Code. The new Code is easier to understand, covers more topics and includes scenarios about situations you could face and how to react to them. We should exercise good judgment and always ask for help when the right course of action is not clear. When you ask a question or make a report about possible misconduct, you are contributing to making our company a great place to work now and in the future. If you make a report about possible misconduct in good faith, you have my personal assurance that you will be protected against acts of retaliation. It takes courage to make a report and we support people that try to do the right thing. Our Code applies to everyone at Regal. We are all held to the same standards including executives, managers, directors and supervisors. We can all be proud of the reputation and business success we have built at Regal. Thank you for all you do to make Regal great! Chairman and Chief Executive Officer

05 WE CONVERT Our core values are linked to the guidance we find in POWER INTO our Code. By acting in an ethical and legal way, weMOTION TO HELP make Regal a great place to work and help ensure THE WORLD the long-term success of our company for all of our stakeholders. RUN MORE EFFICIENTLY. At the heart of all our actions are our three core values: INTEGRITY We are a company that is honest, trustworthy, candid, transparent and fair. HIGH ENERGY Our culture promotes a strong work ethic with high energy teams fostering a culture of inclusion and respect for all. PERFORMANCE Everyone is expected to perform and our stakeholders count on us to execute, meet commitments and continuously improve. By relating our behaviors to these values, we can better understand the impact of our actions. Keep these values in mind if you are ever faced with a situation where you aren’t sure what to do. When we act with Integrity, High Energy and a focus on Performance we are guided to make the right choices.

06 Our Code and Our Responsibilities WHY WE HAVE A CODE OF COMPLIANCE WITH LEGAL BUSINESS CONDUCT & ETHICS REQUIREMENTS; CONFLICTS BETWEEN LAW AND THE CODE In the business environment of today, legal and ethical concerns often arise. We have a Regal employees and representatives Code of Business Conduct and Ethics to help must comply with all applicable legal guide our daily business decisions and actions requirements. No one at Regal has to reflect our core values. While this Code authority to direct anyone to violate the cannot cover or anticipate all of the potential law or require any act that would result issues that might come up or all of the in a law being broken. situations where the right choice may not be apparent, it offers examples and direction on Compliance means not just obeying situations that you might face. Through our laws but also conducting business in an business decisions and behavior, every person ethical way so that we are recognized working with Regal influences our reputation, as a company with a commitment to and our culture. Our Code is not a contract integrity and excellence. No employee but following the Code is a condition of should ever assume or believe that employment. When we comply with the Code Regal’s interests ever require unethical it demonstrates our good judgment and ability or illegal actions. We must not to live up to our values. Our Code applies in knowingly facilitate illegal conduct, all of our locations and at every level of our inaccurate bookkeeping or fraud by business including our directors, officers, and others, regardless of local customs or employees as well as suppliers, contractors, pressure from others. agents, vendors and business partners whose role may involve representing us to others. There may be a rare situation where a local law conflicts with a particular action or policy prescribed by this Code. If this does happen, you must comply with the law. If a local custom or another company’s policy conflicts with our Code, we must comply with our Code. If you think there might be a conflict, you are unsure about what to do or you have questions, contact the Legal Department.

07Our Code andOur Responsibilities continuedOUR RESPONSIBILITIES Additionally, our managers, team leaders and supervisors have special obligationsWe go beyond the minimum standards because they lead others and set the tone forrequired by the law and conduct ourselves the employees they supervise. If you are awith the highest levels of ethical behavior supervisor, team leader, or manager, then weand avoid even the appearance of impropriety, also expect you to:illegal or unethical behavior. The followingresponsibilities apply to all of us: • Take time to explain to others about the areas of this Code that deal with their work; • Read, understand and follow this Code; • Create an environment where everyone • Apply the principles found in this Code, feels comfortable speaking up, asking review Regal policies and understand questions and making reports without fear of legal requirements; retaliation; • Be truthful and honest; use common sense • Be diligent in detecting and preventing and good judgment; actions that could violate this Code; • Consult with your manager, the Ethics & • Act promptly to make sure all reports about Compliance Office, Legal Department or potential violations are included in our other company resources regarding any system, investigated as needed and resolved concerns or questions about our policies appropriately when someone comes to you and how to act ethically. We should use with a concern or is unsure about what to do; resources available to us when we aren’t sure what to do; • Look for opportunities to discuss and address ethical questions and challenging situations • Promptly report misconduct or potential with others to encourage open, honest and violations of our policies, the law or our trustful dialogue; and Code; • When a report is made anonymously, do • Cooperate in investigations of ethical or not try to determine who made that report compliance concerns; and and remember that reports should not be considered a challenge to authority in any • Periodically acknowledge your way. understanding of this Code and your obligation to follow it.

08 ReportingNormally, the best course of action when you have a concern ETHICS & COMPLIANCE OFFICE:or suspect misconduct is to report it to your direct supervisor,team leader or manager because she or he is the person most TEL: 608.361.7416 (direct)likely to be in a position to resolve the concern. If you are not 800.833.7901 (US toll free)comfortable reporting to your local team or management, we 608.364.8800 (Beloit office)have several other options for reporting concerns. FAX: 608.364.8817To ask for help with a business ethics or compliance concern orto report suspected, planned or actual violations of this Code EMAIL: [email protected] corporate policies, express your concern(s) to: MAIL: Ethics and Compliance Office • your direct supervisor or manager; Regal Beloit Corporation 200 State St • the next level above your supervisor, team leader, or Beloit WI 53511 USA manager; INTEGRITY ALERT LINE PHONE LINE: • the appropriate functional manager or expert (for example, Human Resources or Finance); A third party service provider takes your report live. Dial according to the country • the Legal Department; specific instructions on the back of this Code booklet or look online where numbers • the Ethics & Compliance Office; are posted at http://media.corporate-ir. net/media_files/IROL/11/116222/pdf/ • the Integrity Alert Line phone or web portal; or IntegrityAlertLineNumbers.pdf. Calls are answered by a third party in your local • the Audit Committee of our Board of Directors by directing language, or you may stay on the line to request postal mail to our headquarters location in the US: 200 an interpreter to help you report concerns or State St, Beloit WI 53511 USA. ask for guidance.ANONYMITY – Except where expressly prohibited by law such INTEGRITY ALERT LINE WEB PORTAL:as certain countries in the European Union, we may report This external website hosted by a third partycompliance concerns and seek guidance anonymously. We service provider has a form to complete andhave tailored the Integrity Alert Line reporting systems to submit in the language you choose.comply with regional requirements. Note that, if you doreport a concern anonymously, then it is very important to In the European Union (except Spain/Portugal):provide enough detail so that we can proceed with a thorough www.regalbeloitEUintegrity.alertline.cominvestigation. In Spain/Portugal:CONFIDENTIALITY – If you do not report anonymously, your www.regalbeloitSPintegrity.alertline.comidentity and the information you provided will be disclosedonly as needed to resolve the concern. Rest of the World: www.regalbeloitintegrity.alertline.comINVESTIGATION PROCESS – Regal will investigate eachreported concern. The investigation will result in findings andif appropriate corrective action recommendations. We willprovide feedback to you where possible but we will not shareindividual disciplinary actions.

09No Retaliation Speaking up takes courage. We should feel secure and protected when asking questions or making reports. We do not retaliate for good faith reporting or participating in an investigation or report. A good faith report is one that you believe is true and not made falsely with the sole intent to harm or disrupt others. The protection against retaliation also extends to those of us who are involved in investigations into misconduct. People that do retaliate against others will face discipline up to and including termination of employment.Violations Failing to follow this Code and our policies may result in discipline up to and including termination of employment and in some situations fines and jail time. For example, if we break the rules or tell others to do something that breaks the rules, we have violated our Code and could be disciplined. Staying quiet when we know of or have good reason to suspect something is wrong may result in discipline for not following our Code.

10INTEGRITY Integrity is the cornerstone of our business. Our reputation as an honest, fair and respectful company has been critical to our success; that success can only be maintained by all of us placing personal Integrity high on our list of priorities. Wherever and whenever we work, we are committed to working with Integrity. Working with Integrity means doing the right thing even when no one is watching. We work with Integrity by not taking the easy way out and always acting consistently with our Code. Integrity means being fair to our customers, suppliers, investors and each other. The following sections describe our guidelines about how we can work with Integrity and ensure our long term success.

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12 Protecting Our Assets We protect and preserve our tangible and intangible assets. Company assets must only be used for company purposes and for the company’s benefit. Incidental personal use may be permitted when it does not consume a significant amount of resources and does not interfere with our ability to do our jobs. Our assets include tangible assets such as buildings, equipment, computers, office supplies, manufacturing materials, and other physical property. Assets also include intangible items such as technologies, intellectual property, confidential information, software, business strategies and plans, financial data, marketing and sales plans, etc. All of the company’s information systems and resources such as cell phones, personal computers, e-mail, etc. are the company’s property. Exercise care when using company systems to ensure communications are professional and appropriate. Use these systems according to our Electronic Communications Policy. Our communications resources should not be considered private or personal and there should be no expectations of privacy unless local privacy laws have a different requirement.SITUATIONSarah, a sales manager, works in a busy office.She goes to the printer to pick up a few reportsand notices that one of her coworkers, Jessica,is picking up a few hundred pages. Sarah says toJessica, “It sure looks like you have your hands full,what are all of those?” Jessica explains that she is ina theater group and these are 500 flyers to advertisetheir upcoming play. Is this ok? OUTCOME No, this would not be acceptable. While occasional personal use of the computer, printer and other equipment is permitted if done in moderation and with little extra cost to the company, this should not be abused. By using the company printer to make 500 flyers for a theatrical play, Jessica has gone beyond reasonable personal use and is not being responsible with the use of company assets.

13Company Information Company information is a highly valuable asset. It includes all information in all formats that is not generally available to the public. It also includes information that we develop, purchase or license and information that we receive from others (including customers and suppliers). We must maintain the confidentiality of information entrusted to us by the company, our customers and our vendors except when disclosure is properly authorized or otherwise required by law. We should only use and share confidential information on an as-needed basis to perform our jobs. We must: • Keep information secure and confidential and not share it unnecessarily; • Not share information with others outside the company unless they have a legitimate need to know it and have agreed through an appropriate confidentiality or similar agreement to maintain its confidentiality; • Use company information only for its intended purpose and never for personal reasons; • Responsibly copy documents containing company information, and only remove documents from the work area as required to perform our jobs properly; and • Dispose of company information appropriately. All company records (documents, emails, and other materials) containing company information are the company’s property. The company reserves the right to monitor or access all such records at any time and without notice, where there is a business reason to do so and it is permitted by law. Sometimes, there may be a need to disclose company information to people outside Regal for legitimate business reasons. Before disclosing or receiving information, we must enter into an agreement that describes how the parties may use and must protect the information. Regal maintains standard forms of Confidentiality Agreements to be used and signed by both parties before an employee may disclose any non-public Regal information. We may not use confidential information that employees may have gained from their former employer in our work at Regal. Both current employees and those leaving Regal are expected not to disclose our confidential information. Employees must take reasonable precautions to avoid disclosing company information in public places.SITUATION OUTCOMEBill, a procurement manager, has been working with a supplier Bill should stop reading the email and contact the Legalon a bid for magnet wire. He has been emailing back and forth Department. We cannot use information of a competitorabout prices and specifications for a new contract. An email that was sent to us accidentally to our advantage.arrives to his inbox that is addressed to one of Regal’s competitorswith a similar email address to Bill’s. He reads a few sentencesand realizes that some confidential information of the competitor isincluded in the email. What should he do?

14 Company Books and Records All our books and records, including financial documents and employee-related forms and information, must be timely, accurate and complete. We must sign and authorize transactions appropriately and consistently with our Authorities Policy. We do not create intentionally false or misleading records for any purpose. We maintain accurate books and records by ensuring: • Transactions are properly authorized, and completely and correctly recorded based on appropriate standards and policies for accounting; • Our assets are properly protected; • Financial and management reporting is reliable, unbiased and accurate, and reflects actual business activities. Every business unit and each function must maintain and apply controls to ensure that relevant information is reported on a timely basis to the appropriate levels of Regal.SITUATIONMelissa is a new accountant in our office and she has beenfamiliarizing herself with the books and records. Whilelooking at the documents and transactions she sees somethings that seem incorrect. She notices costs that might nothave been capitalized properly and that appeared improperly onthe balance sheet, double booking on some sales with resultinginventory discrepancies, and that certain expenses had beenconcealed in secret books. What should Melissa do? OUTCOME Recording false or inaccurate information and concealing information to evade taxes, or for any other reason, violates our high standards for accurate record keeping and reporting transparency. Never exaggerate costs or expenses to hide activities. This could be a very serious act of fraud and appropriate steps need to be taken to ensure that our records are accurate and complete. Melissa needs to file a report with the Integrity Alert Line and alert her next level finance manager or someone in Internal Audit about her discovery.

15Company Books andRecords continued Whether records are timecards, expense reports, general accounting records or purchasing or manufacturing records, each of us has a personal responsibility to ensure that the documents are complete and accurate. Some of the ways we do that are to: • Implement controls and procedures that improve accuracy and reliability of our company books; • Record financial and business information, transactions and metrics accurately and timely; • Regularly assess systems and processes for weaknesses; make or suggest corrections where needed; • Know the internal controls and authorities which apply to your work • Cooperate with audits and investigations ; • Speak up about any concerns you may have relating to financial and business information recording to your manager, the company controller, Internal Audit, the Integrity Alert Line, the Ethics & Compliance Office, or the Audit Committee of the Board of Directors.SITUATIONWhile going over some weekly reports about sales figuresand inventory, George, a warehouse manager, notices that anorder of motors has been marked as paid and shipped while heknows that the motors are still with Regal. He confronts the salesmanager that processed the order and he’s told, “I’m positive thecustomer is going to place the order next week but I really need tomeet my numbers this quarter and this sale will really help me out.I’m sure we’re going to win the deal, so what’s wrong with processingit early to get a head start?” OUTCOME This is not in line with our Code or our high standards for accurate record keeping. George needs to let the sales manager know that this is not acceptable and alert his manager to the situation. While the customer could eventually place the order, we need to wait until it actually happens to record it as completed.

16 Document and Records Management We must maintain our business records in an organized manner. Retaining information properly helps us meet our legal requirements and makes it possible to keep track of all of our work and manage our business more effectively. To make it clear which records we need to keep and for how long, we published our Records Retention Policy with an accompanying Schedule. It is our responsibility to familiarize ourselves with the policy, procedures and related documents and refer to them when managing records. The term “records” generally means all evidence of activities and documents in any format, whether paper, electronic or other media, made or compiled by the company and our employees. Alteration or the unauthorized destruction of any record is a violation of company policy and, in many cases, is illegal. In the case of actual or potential litigation or other legal or governmental proceeding or investigation, the company’s Legal Department will provide special records retention instructions. Often these legal holds come with instructions on preserving and keeping records longer than usual.

17Intellectual Property Rights Innovation and new product developments are critical to our long-term success. Where appropriate to our jobs, we are expected to contribute to the research and development of new technologies and products. Our intellectual property includes all of the innovations that we create. Intellectual property can include such things as patents, trademarks, copyrights, trade secrets and other proprietary information such as discoveries and ideas. Our Intellectual property is among Regal’s most valuable assets. We must all preserve and protect our intellectual property rights. To protect our intellectual property, we must: • Ensure that appropriate confidentiality and nondisclosure agreements have been completed; • On a timely basis, thoroughly review new company products, services, processes and software for the identification of possible inventions and trade secrets; • Mark products, product literature and advertising with intellectual property notices; • Report promptly any suspected infringement of our intellectual property rights; and • Before developing discoveries and ideas with someone outside the company, consult with the Legal Department and ensure that a technology development agreement is in place. Just as we expect others to respect our intellectual property, we respect the property of others. We should never knowingly infringe on the intellectual property rights of others. Employees must take appropriate steps to conduct timely searches for conflicting patents or trademarks. Employees must not make use of software, music, photos or other images, etc. that are not authorized or licensed to Regal. New inventions and ideas can revolutionize our company and industry so we must properly document and safeguard this information. We have established a number of tools to help with intellectual property as we create new innovations. Access these when working with existing or establishing new intellectual property: • Patent Docket Form; • Patent Search Requests; • Idea Capture Tool; • Patent Awards Program.

18 Insider Trading and Stock Tipping We may not buy or sell company stock – or encourage others to do so – based on material inside information. Material inside information is information that is not publicly available and could affect the price of our stock or investors’ decisions to buy, sell or hold our stock. Inside information can include financial results, earnings estimates, new products or services, acquisitions or other significant business developments. In addition, you may not recommend or suggest that someone else buy or sell our stock (commonly referred to as “tipping”) based on inside information. We have adopted a Policy Prohibiting Insider Trading that applies to everyone. This is, however, more than a company policy – it’s also the law. The penalties that can result from insider trading are serious and could include criminal prosecution. The duties of our directors, officers and certain key employees make them subject to additional company requirements relating to buying and selling securities which are detailed in a separate policy. Affected directors, officers and employees must comply with the Certificate for Directors, Officers & Key Operational and Financial Staff.SITUATIONA big order just came in from one of our customers andSandra, who works in shipping and receiving, is talkingto her manager about it. Her manager says “They haven’tannounced this yet, but I have a good friend who works forthe company that placed this order. She told me they just hada major breakthrough that is going to be a game changer. If Ihad the money, I’d buy all the stock I could in them.” Sandrathinks that since it’s not Regal stock she’s buying, she could goahead and buy some shares in the customer’s stock. Is she right? OUTCOME No. Trading on any inside information that we obtain even if it does not relate to Regal, is against our Code and could be against the law. Violations can include severe monetary penalties and even jail time.

19Communications with Mediaand Public Reporting Regal communicates with the media and the public to share information about what we do. We must communicate in a way that is accurate, timely and respectful of all of our business dealings. We need to be careful when we discuss financial information with potential investors, regulators or the media as these types of communications can have a direct impact on investments made in the company. Only certain designated individuals are allowed to release financial information to the public as there are strict regulations as to how and when this information may be released. The news media such as newspapers, television reporters and websites want to know what Regal is doing. People in the media may contact us in many ways including for example through phone calls, meeting requests, text messages, email, social media platforms or trade association gatherings. It does not matter exactly how we are contacted, we must respond in the same way. If you are contacted by a member of the media but don’t have pre-approval to speak with them or comment on behalf of the company, then inform the VP of Investor Relations, the Chief Financial Officer, the General Counsel or the VP of Marketing and Communications who handles requests from the media. Only these designated spokespeople are allowed to speak to the media or investors on behalf of our company. SOCIAL MEDIA The increased popularity of social media sites like Facebook, Twitter and many other similar sites allows us to communicate in new and exciting ways. While social media can be exciting, using it carries special responsibilities. We should keep in mind our values of Integrity, High Energy and Performance and our Code when using social media. For example, we should not disclose trade secrets or material inside information on social media. Only certain people are selected and approved to post on social media on behalf of Regal.

20 Avoiding Conflicts of InterestEmployees must deal fairly with each other, our customers, suppliers, business partners and thecompany. A conflict of interest arises when someone has a personal, financial or other relationshipthat could interfere with his or her duty to deal fairly with each other, or when someone uses hisor her position with Regal for personal gain and at the expense of the company.No decision or action, whether made on the job or outside of work, should conflict with yourresponsibilities to Regal. Misusing resources or the influence of your position with the Companyis prohibited. We must avoid even the appearance of a conflict of interest as this can havenegative effects. You should always consider how your decisions or actions will appear toothers inside and outside the company.All actual or potential conflicts must be disclosed in writing to your manager and the Ethics& Compliance Office ([email protected]) promptly for review, including thosecircumstances where there is doubt about the existence of an actual or potential conflict.Actual or potential conflicts can include, but • Personal use of Regal assets or equipmentaren’t limited to: outside of limited or incidental personal use; • A financial or stock ownership interest • A romantic relationship with another in another company that is a supplier, employee with whom you have a direct or customer or competitor; indirect reporting relationship; • Giving or accepting gifts or anything of • Outside business or other interest that value from others doing business with or diverts significant time or attention from seeking to do business with Regal (except our work at Regal; in accordance with our policies about gifts, entertainment and meals); • Accepting a director or officer position at any company or organization (including • When a member of your household or not-for-profit) without approval from your immediate family works for or is themselves manager and the Ethics & Compliance a supplier or customer; Office.SITUATIONPatrick’s children are getting ready to go off to college and he is tryingto earn some extra money to pay for their expenses. He works as a welderand is very good at his job at Regal. He is looking at taking another job at acompany that supplies parts to Regal. They have an opening for him and hecan work on the weekends after he’s done with his work week at Regal. Shouldhe take the job with the supplying company that does business with Regal? OUTCOME Possibly. There are many factors that could influence the situation. Depending on the circumstances there could or could not be the risk for a conflict of interest. Patrick should talk about the situation with his supervisor and HR or the Ethics & Compliance Office before accepting the position to determine if a conflict could exist.

21Giving and Receiving Giftsand Hospitality We sell and market our products and services based on their quality, efficiency, reliability and consistency. By relying on these characteristics to win and retain business we do not need to resort to unethical or illegal tactics to meet our goals. The purpose of gifts, entertainment and meals in our work is to create goodwill and sound working relationships. We should never offer, promise or accept anything of value for an improper financial benefit or other advantage. Anything of value can be tangible such as tickets to a sporting event or meals as well as intangible such as jobs for friends and family or even sharing information. Our Code is not meant to restrict us from having normal and customary business exchanges. Our Code helps us to know what is proper and defines situations where we need to ask for more help before acting. All of our dealings must be free from even the appearance that improper benefits are being exchanged to gain a business advantage. This also applies to others acting on Regal’s behalf, such as representatives, agents, suppliers and business partners. We cannot ask someone else to do something that we know is against our Code or the law. Generally speaking all gifts, entertainment and meals must be infrequent, reasonable for the market but never lavish, and connected to a proper business purpose. The following guidelines apply to most private, non-government situations. Special rules apply in the case of public or government employees. Offering or giving any gift, entertainment or meal to public or government employees may be prohibited altogether by laws and regulations. Knowing what is permitted and what is prohibited regarding gifts and hospitality like entertainment and meals can be confusing and may need further research, so please speak up if you are not sure what to do.

22 Gifts Gifts are given to establish goodwill with others that we work with and as a way of promoting a company or its brand. Gifts need to be of nominal value for the market, permitted by law (and the recipient’s company policy), not asked for by the recipient, appropriate, related to a proper business purpose, and not given regularly. For example, in the US, we do not offer or accept gifts that have a market value of $100 USD or more without prior approval and giving or receiving promotional items of nominal value (usually less than $25 USD) is usually ok. Other regions and businesses will have a lower acceptable value; be aware of the market where you are doing business and check for local requirements. Gifts of cash or cash equivalents (i.e. gift cards, vouchers, etc.) are never appropriate. Appropriate donations to charitable organizations approved by company officers are permitted when not done in return for influencing a business transaction or to gain an improper benefit.SITUATION OUTCOMEAt an annual electronics, power and automotive show in the Yes, this is ok. Accepting promotional items (that are notUS, Bethany, a Regal engineer, goes up to a booth of a supplier. cash equivalents) on an infrequent basis is a normalShe hears about their new products and takes some pamphlets. business practice. Likewise, giving promotionalThe representative at the supplier booth also offers her a mug,calendar and some pens. She knows that Regal has high standards items of nominal value is usually an appropriate waywhen it comes to accepting gifts, is it ok to accept these items? to promote a brand and a company.EntertainmentAccepting entertainment from and providing entertainment to our clients and business partners can also be a way of advancingbusiness dealings and fostering a good working relationship. However, we need to be sure that all entertainment that we participatein is appropriate and reasonable, not lavish. As with gifts, we want to avoid even the appearance that the entertainment might be away to encourage or get any type of payback or a favorable business outcome, or, that it is any kind of bribe for doing business withRegal. It can be hard to determine what is acceptable and what is not. Acceptable entertainment is: • Reasonable in value; • Not lavish; • Infrequent; • Legal; • Permitted under recipient’s code of conduct; • Available and open to mixed genders.Typically, something is only considered entertainment if both a Regal employee and an outside business associate are attending.For example, going with a potential customer on a golfing outing would be entertainment, while receiving or providing a voucherfor a round of golf would be a gift. Further, if you would not be comfortable attending with your spouse or a parent because of thetype of venue, it is likely not appropriate for business. When providing entertainment (or any other business courtesy), it is ourresponsibility to ask if the company for which the recipient works has a policy in place that limits the recipient’s ability to accept theentertainment (or gift) before offering it.

23MealsWe can share reasonable meals and refreshments with our customers and businesspartners in the normal course of business. Sharing a meal with someone we are doingbusiness with may be another good way to establish or improve a business relationshipand conduct a business meeting. However, we should be careful to only have mealswith others that are: • Reasonable and in connection with a business meeting (light refreshments such as tea, coffee, fruit, pastries, are good choices); • Consistent with the region or market where offered and the recipient’s business policies; • Infrequent in nature; and • Neither lavish nor extravagant.In all of these situations – gifts, meals, entertainment - it can be difficult to define“nominal,” “lavish” or “extravagant” with a specific monetary amount since the costsfor such courtesies vary around the world. If you are unsure if something is permittedor might be either inappropriate or illegal, ask before acting. If you would like to askconfidentially, send an email to [email protected] OUTCOMEA big project just ended and Dean, the project No, Dean provided what any reasonable person would consider anmanager, wants to take the customer’s team and elaborate and lavish dinner. We can provide reasonable meals andthe Regal team out to a nice dinner. He’s booked entertainment to our customers and business partners as a waya table at the best restaurant in town. During thedinner, expensive bottles of wine and champagne to advance the business relationship and establish goodwill butare ordered along with an abundance of food, drinks Dean overdid it. He should have used better judgment in using theand desserts. The bill totals several hundred dollars company’s resources. And, even if Dean had paid for the dinnerper person. Dean pays for the meal with the companycredit card, is this ok? himself (using his own money), it would still be inappropriate. Regardless of who ultimately pays the expense, the same rules apply for gifts, entertainment and meals.Gifts, Entertainment and Mealswith Government PeopleThere are very strict rules all over the world about providing gifts, entertainmentand meals to government employees. Actions that are legal and common place in acommercial business setting can be illegal if provided to a public person, governmentemployee or other “government official.” We strictly comply with applicable lawswherever we work. Except as approved in advance by the Ethics & ComplianceOffice, we are prohibited from giving anything of value (even light refreshments orpromotional items of small value) to public or government employees, representatives,officials - or their family members.

24HIGH ENERGY We promote a strong work ethic with high energy teams that foster a culture of inclusion and respect for all. High energy teams have a group identity and are committed to each other—celebrating our successes and sharing the challenges. Many things make a High Energy workplace possible such as the ability to dream and achieve our goals. Other attributes of a High Energy work environment include being respectful, inclusive and accepting of others. We rely on each other to be productive and deliver the most value to our customers. Having a work environment where everyone feels respected and safe is fundamental to how we operate.

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26 Fair Employment Practices We value and respect our diversity. We work every day to create an atmosphere where each of us knows that we are valued as an individual and everyone is treated with dignity and respect. We are an equal opportunity employer in all of our locations worldwide. We employ and promote qualified people without discrimination. Any treatment of a person, either less or more favorably, with respect to a person’s race, color, religion, gender, gender identity, sexual orientation, marital status, age, national origin, disability, military or veteran status is not allowed. This applies to all aspects of the person’s employment, including recruitment, hiring, training and development, compensation, transfer, promotion, discipline or discharge. We are committed to complying with applicable labor and employment laws in all the places where we do business, including those related to freedom of association, privacy, collective bargaining, immigration, fair working conditions, employment discrimination and harassment. We treat everyone with respect -- meaning fairly, professionally, and with honesty. We are committed to maintaining a workplace free from physical, psychological, verbal and nonverbal harassment, including sexual harassment. We will promptly and impartially investigate all complaints of harassment and discrimination. Harassment is a behavior related to a person’s race, gender, gender identity, color, religion, national origin, age, sexual orientation, marital status, veteran status, disability or other characteristic that creates an intimidating, hostile or offensive work environment or that unreasonably interferes with an employee’s work performance. All forms of harassment by anyone, including customers, visitors and suppliers, are strictly prohibited. For more information on this topic and how we can contribute to our value of High Energy, please read our Respect and Dignity Policy.SITUATIONThe company is looking for a new machine operator and has had anumber of qualified people apply for the job. During the interviewprocess, Sean, a man in his early twenties, is interviewed. It seems tomost of the team that he has a good attitude, the required skills and astrong work ethic. However, one member of the team says, “Sean is justtoo young to know how to do things right. We don’t want to hire a youngman who is bound to make mistakes due to his inexperience. We should hiresomeone older who knows how things really get done.” Is this ok? OUTCOME No, this is not in line with our Code, our values or our stance of diversity and inclusion. While we can consider factors such as work experience, attitude and skills necessary to get the job done, we do not discriminate based on age or other factors. The fact that Sean is being discriminated against due to his age is wrong and has no place at Regal. We need to hire the best person for the job without discriminating.

27Safe Work Place SUBSTANCE-FREE WORKPLACE We do our best work with a clear mind and body that is not impeded by drugs or alcohol. We do not tolerate the use of drugs or alcohol that can negatively affect the safe and successful conduct of our business. In accordance with local policies, we discourage the use of tobacco products while inside company facilities or in company vehicles. We do not permit possession or use of alcohol or illegal drugs during business hours, including lunches and break periods. Possession, use, purchase, transfer or sale of drugs or controlled substances without documented medical authorization is cause for immediate disciplinary action. There can be exceptions for use of alcohol during special events (such as a holiday party) with advance approval by a company officer.SITUATIONAfter returning to work from a meal out, Jake noticesthat his manager smells like alcohol. Jake’s manager isacting strangely and slurring his words. Jake confronts hismanager but he reassures Jake that he’s fine and often has acouple beers before returning to work to “take the edge off”.What should Jake do? OUTCOME Jake needs to act so that his manager doesn’t hurt himself or others. His manager is creating an unsafe work environment by being under the influence of alcohol at the job. Jake should let someone else in management and HR know about the situation so that it can be addressed immediately.

28 Safe Work Place continued VIOLENCE-FREE WORKPLACE Our workplace is free from violence, intimidation and bullying. Violence can mean causing physical harm, such as shoving or pushing as well non- physical contact such as shouting or threatening. Those people that engage in violence, including suppliers, visitors and customers, go against our values, our Code and our way of doing business. We prohibit the possession of weapons while on Regal’s premises including in personal vehicles (unless expressly permitted by local law). Weapons include guns, knives, explosives, and any similar items with the potential to cause harm.

29Safe Work Place continued ENVIRONMENT, HEALTH, SAFETY AND SUSTAINABILITY We maintain work environments that are safe and healthy. We track progress at facilities in our Compliance Citizenship Review (CCR). We are committed to meeting all applicable environmental requirements and conducting our operations in a manner that minimizes environmental impact. This applies to all our activities, not just managing our waste and emissions, but everything we do. It also includes using resources efficiently, recycling and operating all facilities in accordance with laws and our policies. Safety must always be a top priority. Follow proper procedures in case of a fire or other emergency. We need to know how to use our tools and equipment safely and properly. No deadline or sale is ever worth endangering people or compromising safety. If you see something that could potentially be a hazard, speak up. Everyone has the authority to stop work in order to correct a safety issue. Understand and follow Regal’s Social Accountability and Environmental Sustainability policies.SITUATIONIt is nearing the end of the day and an order has to becompleted to meet a customer’s deadline. Nadine worksin machining and has been working hard all day to meet thedeadline. She notices that one of her coworkers has rigged upsome wire and tape to disable a safety guard on a drill press. Sheasks her coworker what’s going on and the reply is, “Listen, I knowthis machine like the back of my hand and this safety guard reallyslows me down. We need to get this order done and I work faster likethis.” What should Nadine do? OUTCOME Nadine’s coworker must put the necessary safe guards back in place before continuing work. Nothing (including meeting a deadline or profits) is worth endangering anyone’s safety. Sometimes, we can get distracted by pressure to meet our goals but sacrificing on safety and increasing the likelihood of an accident is never the right way to get things done. If her coworker will not put the guard on, then Nadine should alert her manager or someone in EHSS immediately and stop work until the safety issue is corrected.

30 Supplier Relationships Our suppliers are a vital part of our business and we rely on them to provide quality products and services to us. We partner with suppliers based on the value and quality of products as well as their commitment to doing business the right way. To be successful, we need to partner with suppliers that share our value of High Energy and ethical business dealings. Our expectations for supplier quality and ethical dealings are detailed in our Supplier Quality Assurance Manual and other documents on our website. We partner with suppliers that respect human rights. All our suppliers must maintain safe and healthy working environments where their employees are respected and treated with dignity. We also require that our suppliers comply with our Conflict Minerals Policy and laws about chemical and hazardous substances. At times, it may be necessary for suppliers to verify that they are meeting with our expectations. Suppliers can prove this by providing documents to us such as certifications, policies and manuals; it can also be accomplished with site visits, inspections and audits. Compliance with high ethical standards and having appropriate supply chain security are mandatory for doing business with Regal. We can require suppliers to make improvements or, if needed, terminate a business relationship with suppliers that will not conduct business to our expectations. Our relationships with suppliers are based on trust. We provide confidential and sensitive information to our suppliers (and vice versa) and we expect that suppliers will protect our information as we protect their information.

31Personal Data Privacy We must respect individuals and their personal information. We are committed to a workplace where sensitive personal information is protected. In the course of our business, we collect and maintain personal information such as names, contact information and identification numbers of our employees, suppliers and customers. People that disclose personal information to us should do so with confidence that we will maintain and use it responsibly for legitimate business purposes and in compliance with applicable privacy laws. Our employees and representatives must handle personal information for only its intended purpose and on a “need-to-know” basis. Many countries have laws about the collection and use of personal information. These laws govern the handling of information provided by consumers as well as personal information of Regal employees and representatives. We collect, use and disclose personal information with appropriate security and in a manner consistent with the laws of the countries in which we do business. Appropriate safeguards must be in place to ensure that data is properly controlled such as securely transferring personal information. Inform your supervisor, team leader, Human Resources, the Integrity Alert Line, or the Legal Department if you learn or suspect that personal information has been improperly disclosed or misused.SITUATIONTobias, who works in Human Resources at Regal inWisconsin, is working on a project with other Regal peoplein Europe, China and Mexico. He is about to go on vacationand needs to have some information while he is out of theoffice. He has a file with the names, addresses, ID numbersand bank account information of the Regal employees that are apart of the project he needs. He sends the file to his personal (notcompany) email account so he has access to the information. Wasthis the right thing to do? OUTCOME This was not the right thing to do. When we send information to email addresses outside of the Regal email network it increases the likelihood that it can be stolen by others. This can be particularly risky when the data that is being shared involves private personal information. Tobias should let his manager and IT know about his actions so that appropriate steps can be taken to maximize the chances of the data remaining safe and secure in the future.

32PERFORMANCE Our stakeholders count on us to execute, meet commitments and continuously improve. Our focus on Operational Excellence ensures the alignment of our corporate objectives with our teams, resulting in exceptional performance. How we make our products can be just as important as the products themselves. We are entrusted by our stakeholders, investors, customers and communities to meet our obligations in an ethical and responsible way. We are always innovating and thinking of new, exciting ways to meet the demands of a changing world. Regal is made up of demanding and ethical people and this is reflected in our Performance. At the end of the day, how we perform is how we will be remembered.

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34 Product Safety and Quality Our business purpose is “We convert power into motion to help the world run more efficiently.” We do this by bringing world class performance to our customers through innovation, quality, delivery, responsiveness and cost. Our products need to be of the highest quality possible and safe to use to achieve their purpose. We all share responsibility for utilizing Regal’s resources to improve the reliability and safety of our products. We are aware of the differences between operating efficiently and cutting corners to get the job done. We have rigorous quality control and production standards in place to make sure that all of our products meet legal, regulatory and customer requirements. Creating the best products possible in an ethical and safe way will ensure our long term success. Refer to our Quality intranet home page for information on creating quality products. We make products that perform well and are safe when used as intended. We have many standards and tests in place to make sure that the products we sell are in line with all standards for product safety. If we become aware of any safety issues with our products, we need to look into and address those concerns. When we invent a new product, we need to follow our New Product Development process. This process is structured to ensure that our products will be designed and manufactured to meet or exceed appropriate quality and regulatory standards governing health and safety. Refer to the Technology intranet page to find the appropriate person to contact if any product safety or quality questions or concerns arise.

35Fair Competition We are dedicated to winning customers through the quality and total value of our products and services. We do not win by creating unfair disadvantages for our competitors. It is critical that we avoid even the appearance of impropriety while competing in the marketplace. Competition laws (called antitrust laws in some countries) promote fair and honest competition and protect suppliers and customers from practices that limit competition. Violations of these laws can mean potential damages and fines for the company and large fines and imprisonment for the people involved. These laws are complex, can apply globally, and may operate differently in different circumstances. We comply with all applicable competition laws. It is essential that the Legal Department be consulted before discussions or agreements with a competitor are entered, before appointment or termination of business partners (including distributors) or before change pricing practices or processes. We do not make any agreements or arrangements, formally or informally, with competitors, customers, suppliers or others to intentionally limit or reduce competition. We independently determine the prices and terms of sale for our products and services. We do not “price fix” and we avoid agreements – written or unwritten, formal or informal - with competitors about prices. No price fixing means that our prices must be reached independently. Agreements with competitors related to prices are strictly prohibited. This prohibition includes, but is not limited to, agreements that decrease prices, increase prices, set minimum or maximum prices, or establish a formula for computing prices. We do not allocate territories, product lines or customers with competitors and make no agreements to allow these activities. These types of agreements are strictly prohibited.

36 Fair Competition continued Communications with competitors must only be done in limited situations and with pre-approval. Only meet with a competitor representative (outside of trade or professional association gatherings) after first consulting with the Legal Department. While sometimes we must meet with suppliers or customers who are also competitors, you must report situations where you are meeting with a supplier or customer who is also a competitor when the discussion goes outside the scope of the supplier or customer relationship. If a competitor attempts to initiate communication regarding anti-competitive subjects, you must immediately stop the communication and tell the competitor that our policy forbids you from having such a discussion. If these subjects arise in a meeting or other setting and the discussion is not immediately stopped, you should leave the meeting. Then, immediately report the situation to the Legal Department. Participation or membership in trade and professional associations frequently involves communication between competitors. When you participate in trade or professional associations pay careful attention to our policy on antitrust laws and avoiding discussing competition-sensitive topics. Gathering information about our competitors and competing products and services is a necessary and routine part of business. However, in gathering such information, we will not use improper means such as theft or deception.SITUATIONWhile at a conference in Hong Kong, Francis who sellsvariable frequency drives, meets with customers, businesspartners and experts in our industry. Francis is approachedby a sales manager at one of Regal’s competitors. At first,the conversation is about the conference and weather. Thenthe sales manager says, “Between you and me, we are wastingour time and money in Brazil. I’ll tell you what, if Regal wants todominate in Brazil, that’s fine but stay out of India. This way weboth make more money, think about it.” Then he walks away. Whatshould Francis do? OUTCOME Francis needs to notify the Legal Department about the conversation. Although it could seem like an off-hand comment, we need to make a record of this activity to protect Regal. The competing sales manager was trying to induce anti-competitive activity that would hurt our customers and endanger Regal’s long term success.

37Working with Governments We do business with a variety of private and public companies, including municipal, provincial, state and national governments and government-owned entities (sometimes called “state- owned”). We routinely work with government regulatory agencies and officials in connection with our non-government business. When contracting with governments, certain unique and special rules often apply to accounting, pricing, reporting, product specifications and how we comply with their requirements. It is essential that we fully review and understand applicable government requirements, especially as to the US Government or its agencies, before submitting proposals or accepting contracts. We only enter into an agreement with requirements that we can fully meet. Any proposal for the sale of goods or services to a government agency, military unit, branch of government, any entity owned even in part by any type of government, including a sale to a non-government customer or contractor for later sale to a government agency, requires prior review and approval by the Legal Department. All company communications with government personnel must be truthful, accurate and complete. We are committed to following government rules for competing fairly. We will honor limitations applying to government employees, such as restrictions related to gifts and offering employment to former government officials. Any activities involving government officials and changes to laws and regulations affecting the company (such as lobbying) require advance approval from the Legal Department. Such activity may require advance registration or reporting under lobbying or other laws.

38 Anti-Corruption Program No short term gain is ever worth damaging our long term success or reputation. We are against corruption and bribery in all forms and do not tolerate it in our business or from our business partners. Anti-corruption laws are in place all over the world. These laws, including ones like the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act, prohibit companies from improperly giving anything of value to get, keep or influence a decision or action. We do not engage in bribery or corrupt activities to gain or retain an improper business advantage. A bribe can be anything of value (including favors and other non-tangible items) that is meant to improperly influence a business decision. We do not allow others to provide bribes on our behalf. We need to carefully monitor the actions of our business partners and agents, because the actions of individuals acting on Regal’s behalf can have a direct impact on Regal. Some laws make no distinction between Regal employees and business partners acting on our behalf if misconduct occurs. There may be situations where a government official requests a small cash payment to facilitate or speed up or complete an otherwise routine task such as setting up a phone line or issuing a permit. We do not make or pay these types of payments which are sometimes called “facilitation payments.” There can be very limited and extreme circumstances where we do make a payment we would not otherwise make. If we are faced with a life threatening situation or serious harm to ourselves or property, then a payment may be necessary, however if you are faced with these situations, contact the Legal Department as soon as possible. Another key issue regarding bribery and corruption are gifts and entertainment provided to government officials and accurately recording transactions. For additional definitions, processes and policy information review our Anti-Corruption Program documents online and the “Giving and Receiving Gifts and Hospitality” section of our Code. If something does not feel right, don’t do it. If you have questions, talk to your manager or someone in the Legal Department before acting. Understand your obligations as a Regal employee under the Anti-Corruption Program.SITUATIONWe are setting up a new office in South America and Eugene is incharge of obtaining the necessary permits and approval from thelocal government. He is working with government liaison in chargeof utilities who says, “I am glad that you want to set up offices butyou need to know how things get done here. A gift in appreciationfor my time and effort is greatly appreciated for obtaining thesepermits for you. If I don’t get these, it could take a long time to getwhat you need or you may not get it at all.” Eugene is torn betweengetting the new office set up in time and giving improper gifts. Wouldthis be a bribe?OUTCOMEYes, this would be a bribe and Eugene should not pay it. Even though thegovernment liaison is merely calling this a “gift” it is still a bribe. Eugeneshould report what happened to his manager and the Legal Department. Wedon’t make bribes, period. We will find another, legal way to get the permit.Eugene has the full support of everyone at Regal to do the job the right way.

39 Political Contributions and Activities We comply with all national, state and local laws regulating our participation in political affairs, including limitations on contributions to political parties, organizations, and individual candidates. Those who make contacts on behalf of the company with political parties, organizations, candidates or government officials must fully comply with all applicable laws and rules. We encourage our directors, officers and employees to be informed voters and to be involved in the political process. Participation in the political process is a personal, voluntary and individual decision. However, making contributions to political activities can sometimes be a way to provide bribes to members of the government. We should be careful to avoid even the appearance of bribery when involved with political activities. Those who choose to participate in the political process, whether in contribution of time or resources, may not do so as a representative of Regal. We must not use company time, resources or facilities to work on political activities or fundraisers without pre-approval. These restrictions apply to political activities and payments in all countries, unless applicable laws allow such activities. However, even where permitted by law, the responsible business leader and the Legal Department must approve in advance any political activities or payments made on behalf of the company.SITUATIONMike works as an office manager at Regal and recentlyjoined the campaign of a local politician running for re-election. He needs to make some phone calls and designsome pamphlets for the campaign but can’t find the time todo it. To save time, he uses a few hours during his shift atRegal to make some phone calls as well as using his companycomputer to design the pamphlets. Was this ok?OUTCOMENo, this was not ok. Regal systems, resources, equipment, time andfunds should not be used for personal or political purposes withoutprior approval.

40 International Trade Controls As a leading global company with operations all over the world we need to be aware of and comply with laws when doing business across country borders. All countries have specific legal requirements governing the movement of goods across their borders. Exports are when products, services or information are moved out of a country. Imports are when products, services or information are brought into a country. Depending on the type of transactions, we may be responsible for the import, export or both. Employees involved in export or import activities must: • Obtain proper authorization as applicable; • Establish eligibility of those who will receive products being exported by the company; • Execute and deliver required documentation that is timely, truthful, accurate, and complete; and • Retain records in accordance with applicable requirements. International trade involves the movement of both physical products such as motors, generators and components as well as information such as software and technical know-how. Laws in many countries prohibit or restrict the export of certain types of commodities, technology, software, information and other items. An export can occur through shipments, carrying items across a border, electronic transmission (emails, web access, telephone, etc.) or in-person conversations. U.S. laws prohibit companies from doing business with or exporting our goods and services to citizens, companies and representatives of certain countries. This prohibition also applies to individuals and companies that appear on various restricted party lists. Laws also forbid U.S. companies from cooperating with certain boycotts of other countries and require U.S. companies to report requests for support of boycotts. We need to know sufficient information about our customers to be certain that we are dealing with reputable entities to whom we can legally sell and export. It is important that we know our customers when doing business both internationally and domestically. Our customers should provide clear answers about their operations, owners, locations and end use of our products before we engage in the export process. We need to be sure that our customers are not engaged in acts of terrorism, illegal weapons manufacturing or included on banned lists for dangerous and illegal activity. As a global leader, we have to be sure that the products we make do not end up in the wrong hands. We do this by knowing our supply chain and our customers. If you aren’t sure what to do when doing international business ask the Global Trade Compliance Team ([email protected]) for help and reference our Import and Export Manuals. All of our entities and businesses, regardless of location are responsible for making sure they are complying with these rules, our policies and procedures.

41Money Laundering andCorruption PreventionMoney laundering is an attempt by individuals or organizations to hide or to make legitimate the moneyconnected to crimes, including terrorism, drug sales, bribery and fraud. They may attempt to concealtheir improperly obtained funds by using them to purchase products such as those sold by Regal.We are committed to complying with anti-money laundering laws around the world. Stopping moneylaundering is a key step in combating serious criminal activities. It is essential to take reasonable stepsto detect and avoid potential customer relationships that place us at risk for money laundering. We willdo business only with customers that are engaged in legitimate business activities and that use fundsobtained through legitimate sources.Before engaging any representative, distributor, third party agent or other business partner that mayrepresent Regal in any way, we must perform appropriate due diligence and follow the Business PartnerEngagement and Re-Engagement Procedure.Certain types of business activity should cause us to consider whether Regal is being used to laundermoney or participate in other illegal activities. The following are some examples:• Attempts or requests by a customer or potential • Attempts to structure business to evade record- customer to pay in cash, money orders or keeping and reporting requirements, such as travelers checks; multiple cash transactions below the amounts requiring reporting to authorities or two sets of• Attempts or requests by a customer or potential books where information is omitted from one customer to pay through a third party; intentionally;• Requests by a supplier for the company to make • Unreasonably complicated transactions; a payment to a third party; • Customer or customer representative providing• Orders or purchases by a customer that are false information or is reluctant to provide unrelated to its normal business; complete customer identifying information; and• Transactions involving locations commonly • Commissions, bonuses, success fees and other associated with terrorism, narcotics trafficking payment arrangements that are above the usual rate. or money laundering;SITUATIONA new customer just cancelled an order. Janice, a Regal accountant manager,is working on processing the refund. The customer has requested that therefund be issued in the form of a check made out directly to the CEO of thecompany (Mr. John Smith); not to the same company (Company ABC) thatinitially paid for the order. This seems unusual to Janice. What should she do?OUTCOME Janice is correct to feel that something is not right. This can be one of the many ways that corrupt companies and individuals launder money. She should let her manager and the Legal Department know about the situation before issuing the refund.