Statement of Principles Policy
This entire policy, including the Statement of Principles and its Interpretations, is intended to be a Code of Ethics within the meaning of Securities and Exchange Commission rule 17 CFR Part 229, Section 406(b)
Pulse Electronics Corporation (Pulse) is a highly ethical company and will comply with all laws applicable to its operations. In addition, Pulse has an obligation to its shareholders and other stakeholders to make certain that the actions of its officers, directors and employees are above reproach and suspicion. Therefore, Pulse has adopted the following Statement of Principles (SOP).
Pulse's Statement of Principles
- We are a highly ethical company with a strong tradition of complying with all applicable laws in letter and in spirit even when/where others depart. This Principle applies to the conduct of all directors, officers, employees and consultants of Pulse and its Business Segments, anywhere in the world.
- We employ a global work force whose background is very diverse. We respect its differences and applaud its positive effects on the company. The diversity of our operations and our employees is a bedrock strength. We are, wherever we are, a local, global company.
- We value our customers by understanding their businesses, listening to their needs and building high quality products on time and within an agreed upon pricing structure.
- We value and reward professional competence, leadership at every level and teamwork with a capital "T".
- We want to grow with our customers, have a business relationship based on honesty, trust and respect and be their component supplier of choice.
- We establish financial and non-financial practices competitive with our peer group companies so our employees can do their best work at all times on behalf of our customers.
- We respect the privacy and innate human dignity of all people. We treat all persons with dignity and respect and endeavor to provide a work environment consistent with this Principle. Harassment of any type is inconsistent with this Principle and is not tolerated.
- We: 1) ensure that our global operations and all of our products do not harm the environment or endanger the health and safety of our employees, customers or the public, and 2) insist on strict compliance with all applicable environmental laws in all countries where we do business. Where reasonably possible outside of the United States, we apply United States environmental and employee safety standards to our operations.
- We do not discriminate in the hiring, discharge, compensation, promotion or benefits offered to any employee or applicant on the basis of race, sex, religion, age, disability, sexual orientation, or any other basis. We treat all qualified people equally.
- We conduct our business in compliance with the laws of the United States and other antitrust and similar laws that apply to our global operations. We will encourage fair competition in the marketplace for our products.
- We want employees who are honest, trustworthy, hardworking, and completely committed to the application of our Statement of Principles and to our success (financial and otherwise) as a business enterprise.
- Within the context of varied social systems where we do business around the world, we strive to: 1) improve the working lives of our employees, 2) improve the overall lives of our employees as whole persons, and 3) influence progress in local social conditions whether only in the context of our own operations or, if reasonably possible, more broadly.
- We prefer to do business with companies, agents and vendors, who endorse Pulse's Statement of Principles.
APPOINTMENT OF ETHICS OFFICER
The SOP is the responsibility of Pulse's Ethics Officer who shall be appointed by, and report to, Pulse's Chief Executive Officer. The Ethics Officer is responsible for the administration and implementation of the SOP, including the periodic training of employees regarding the interpretation of the SOP. He/she is authorized to retain professional advisors in furtherance of these objectives and Pulse will make sufficient resources available to the Ethics Officer to accomplish his/her goals.
The Ethics Officer will deliver a report at least annually to the Board of Directors concerning the SOP.
The name, telephone number and email address of the current Ethics Officer is available at every Pulse location and is posted on Pulse's website at www.PulseElectronics.com. The Ethics Officer also maintains a 24-hour "hotline" which can be reached from anywhere in the world. The "hotline" telephone number is:
- In the United States: 1-215-354-0549
- Outside the United States: 001-215-354-0549
Pulse has interpreted the SOP to prohibit and/or require certain standards of conduct. Certain of these interpretations are listed below. This is by no means an all inclusive list. Any questions regarding what is required or prohibited by the SOP should be immediately discussed with the Ethics Officer on a confidential basis.
- Conflicts of Interest; Prohibition in Self-Dealing
We interpret our SOP to embrace the duties of loyalty and fairness on the part of our employees to the Company. Therefore, our SOP prohibits conflicts of interest and/or self-dealing between any employee and Pulse. So, no employee may have a financial interest in any transaction in which Pulse is involved. In addition, no employee may retain for him or herself an opportunity that is available to Pulse. Any such financial interest must be disclosed to the Ethics Officer and any conflict of interest, self-dealing or corporate opportunity involving an employee must be disclosed to the CEO who will, in turn, bring this matter to the attention of the Audit Committee of the Board of Directors. A conflict of interest, or self-dealing or personal use of a corporate opportunity may be waived only by Pulse's Board of Directors and any such waiver will be promptly disclosed to Pulse's shareholders. A "financial interest" includes any direct or indirect ownership, any debtor-lender relationship, any employment, managerial or partnership relationship and any consulting or agency relationship, by an employee or member of his/her immediate family and any related trust or estate in which the employee has a fiduciary capacity, in any case with an entity with which Pulse does business, irrespective of materiality except as set forth in the next sentence. "Corporate opportunity" includes financial benefits available to the Company which are instead taken by an employee (e.g., IPO stock allocations; purchase of property which could have been purchased by the Company). "Financial interest" excludes ownership of less than 1% of the capital stock of a company whose shares are listed on a national securities exchange or traded on the NASDAQ and where quotations are regularly available in The Wall Street Journal. If an employee has any questions about whether or not any activity or interest may appear to be improper, or may meet the definitions of this paragraph, the employee should check with the Ethics Officer before engaging in the activity or interest.
- Political Contributions
Our Statement of Principles is interpreted to mean that no political contribution of corporate funds or property shall be made, directly or indirectly, by Pulse to any candidate or political party anywhere in the world, and no unlawful or questionable contribution or payment by or on behalf of Pulse shall be made, directly or indirectly, to or for the benefit of any official or employee or entity of any government anywhere in the world. Among other things, this prohibition applies to direct or indirect contributions or payments consisting of:
- cash, gifts in kind, subscriptions, memberships, loans, advances, deposits, purchase of tickets, purchase of advertising space on behalf of a third party, furnishing of supplies and payment of expenses on behalf of a third party;
- furnishing services of employees or performing services;
- the use of any of Pulse's property; and
- undercharging for services or materials sold or leased.
The restrictions set forth above relate only to the use of Pulse's funds or property and in no way are intended to discourage directors, officers, employees or agents from voluntarily making personal contributions from their own funds or property to candidates, political parties or political organizations of their own free choice. Exceptions to this general policy may be made only on the written authorization of the Chief Executive Officer of Pulse after he has determined that such payment or contribution is not contrary to the ethical standards of Pulse and he has obtained a written legal opinion approved by General Counsel that such contributions are lawful and not questionable.
- Bribes, Kickbacks, Under the Table Payments, Rebates, Discounts and Other Promotional Activities
Our Statement of Principles is interpreted to mean that no director, officer, employee or agent of Pulse shall, directly or indirectly, to or with any person, whether or not an agent or employee of a current or prospective purchaser or supplier, undertake any of the actions set forth below for the purpose of inducing such person to use his influence (whether real or perceived) to extend preferential treatment to Pulse, any of its subsidiaries or employees to cause the purchase or sale of products or services:
- make or approve payments;
- provide gratuities or other emoluments;
- enter into any type of arrangement, formal or informal, to the effect that Pulse or any of its subsidiaries will make or receive payments, gratuities or other emoluments; or
- pay or receive any rebates, kickbacks, unlawful discounts or other one-of-a-kind promotional allowances.
- Irregular Accounting Practices
Our Statement of Principles is interpreted to require strict adherence to Pulse's prescribed internal accounting policies, practices, controls and procedures which have been devised as to provide reasonable assurances that transactions have been executed in accordance with management's general or specific authorization. (See Policy No. 4 relating to "Financial Controls, Records and Reporting"). Our accounting records must always reflect accurately and completely the transactions that have occurred so as to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain accountability for all assets. All irregular accounting practices are specifically prohibited. By way of example, prohibited irregular accounting practices include the following:
- "off-book" accounts and "slush funds";
- false entries in Pulse's books, records and supporting documents of any nature;
- over billing arrangements;
- payments for goods or services in excess of fair market value in exchange for purchases by our customer of goods or services from Pulse ("Round tripping");
- payments made with the understanding that part or all of the payment is to be used for purposes other than described by the documents supporting the payment;
- use of Special Purpose Entities to move liabilities off of the balance sheet.
It is Pulse's policy to keep books, records and accounts which in reasonable detail accurately and fairly reflect the transactions and disposition of all of Pulse's assets, and to make full, fair, accurate, timely and understandable disclosure in reports and documents filed with or submitted to the SEC or in other public communications.
- Securities Transactions
Our Statement of Principles requires that applicable persons obey all rules and regulations of the Securities Exchange Commission and New York Stock Exchange. For example, ALL employees will be subject to rules requiring that possession of material non-public information be protected and that such information not be used for personal gain. Policies regarding these matters will be published from time-to-time. See, e.g., Policy No. 7 "Insider Trading Policy" and Policy No. 8 "Corporate Disclosure and Communication".
- Antitrust and Other Legal Questions
Our Statement of Principles is interpreted to mean that United States and applicable foreign antitrust laws apply to our operations. It is Pulse's policy to comply with these laws, which are often complex. Corporate Policy No. 5 addresses Antitrust Compliance. Other legal questions should be referred to the Corporate Staff or General Counsel.
Our Statement of Principles is interpreted to require all employees, officers and directors of Pulse to maintain the confidentiality of information entrusted to them by Pulse or its customers, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that might be of use to competitors, or harmful to Pulse or its customers, if disclosed.
- Protection and Proper Use of Company Assets
Our Statement of Principles is interpreted to require all employees, officers and directors of Pulse to protect Pulse's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on Pulse's profitability. All company assets should be used for legitimate business purposes.
- Applicability of Policy
This policy statement is applicable to all directors, officers and employees of Pulse and its business segments, and the word "Pulse" shall include all units within each business segment.
- Disclosure of Knowledge of a Prohibited Act
Any director, officer, employee or agent having information or knowledge of prohibited acts shall report the matter at once to the Ethics Officer and/or to the Chairman of the Audit Committee of the Board of Directors of Pulse. The name and telephone number of the current Chairman of the Audit Committee is available at every Pulse location. No person disclosing a violation of this policy will be punished in any way unless such person has also committed a violation of this policy.
- Questions Relating to Policy
Anyone who has any question whatsoever regarding this Policy or its application should review the matter with the Ethics Officer. The services of the General Counsel of the Company are available for advice and consultation. All such consultation from the Ethics Officer and General Counsel is available on a confidential basis.
This policy will be administered and enforced by the Chief Executive Officer. Each employee is required to observe the policy and to report possible violations. In furtherance of this, employees designated by the Ethics Officer shall annually provide to Pulse and the Audit Committee of the Board of Directors a statement in writing, in a form prescribed by the Ethics Officer and commonly known as a "Business Conduct Questionnaire", to the effect that he/she knows of no violations of this policy.
- Disciplinary Action
Anyone who violates the prohibitions set forth in this policy will be subject to disciplinary action including, as appropriate, suspension or termination of employment. These provisions do not waive Pulse's right to take legal action against individuals in appropriate situations.
This policy will be published on the Pulse website at www.PulseElectronics.com.