VII. DEALINGS WITH PERSONS WHO PROVIDE US GOODS AND SERVICES

The Company is a valuable customer for many suppliers of goods, services and facilities. People who want to do business, or to continue to do business, with the Company must understand that all purchases by the Company or any of its reporting units will be made exclusively on the basis of price, quality, service and suitability to the Company's needs.

A. Reciprocity

Providers of goods and services will not be asked to buy goods and services from the Company or any of its reporting units in order to become or continue as a supplier. The Company considers such reciprocal dealing a harmful practice and a hindrance to assuring purchase of the best available materials or services at the lowest possible prices. The Company will not attempt to influence its suppliers to purchase from its customers or any of its reporting units. When the Company makes purchases, it will not favor firms who are customers of the Company or any of its reporting units.

B. "Kickbacks" and Rebates

Corporate purchases or sales of goods and services must not lead to employees or their families receiving personal kickbacks or rebates. Employees or their families must not accept any form of under-the-table payment.

C. Receipt of Gifts and Entertainment

Even when gifts and entertainment are exchanged out of the purest motives of personal friendship, they can be misunderstood. They can appear to be attempts to bribe our employees into directing corporate business to a particular supplier. To avoid both the reality and the appearance of improper relations with suppliers or potential suppliers, the following standards will apply to the receipt of gifts and entertainment by employees:

1. Gifts

Employees are prohibited from soliciting gifts, gratuities or any other personal benefit or favor of any kind from suppliers or potential suppliers. Gifts include not only merchandise and products, but also personal services, theater tickets and tickets to sports events. Employees are discouraged from accepting unsolicited gifts. They are prohibited from accepting gifts of money and gifts in any form that would induce or obligate them to give special consideration to the person or company making the gift.

Employees may accept unsolicited, non-monetary gifts provided:

1. they are items of nominal intrinsic value; or
   
   
2. they are advertising and promotional materials, clearly marked with company or brand names.

Any gift of more than nominal intrinsic value must be reported to the recipient's supervisor to determine whether it can be accepted. Some gifts may be personalized or perishable so as to make their return impractical. Supervisors can permit acceptance of such gifts, but can require employees to tactfully inform givers that such gifts are discouraged.

Supervisors can also allow employees to keep returnable gifts of more than nominal value. In so doing they must require employees wishing to keep such gifts to pay the donors the reasonable value of the goods or services involved or to pay the equivalent to the Company. In these cases, supervisors can also require that employees tactfully discourage future gifts.

In the transaction of some international business, such as major capital facilities investment, it is lawful and customary for business leaders in some countries to give unsolicited gifts to employees. These gifts can be of more than nominal value. Moreover, under the circumstances, returning the gifts or paying for them may constitute an affront to the giver. In such cases, the Company can permit the recipient to retain the gift, or it may require the recipient to transfer ownership of such gift to the Company or to pay the Company the reasonable value of such gift.

2. Entertainment

Employees shall not encourage or solicit entertainment from any individual or company with whom our Company does business. Entertainment includes, but is not limited to, activities such as dinner parties, theater parties and sports events.

From time to time employees may accept unsolicited entertainment, but only under the following conditions:

1. the entertainment occurs infrequently;
   
   
2. the entertainment arises in the ordinary course of business;
   
   
3. the entertainment involves reasonable, not lavish, expenditures. The amounts involved should be ones employees are accustomed to spending normally for their own business or personal entertainment;
   
   
4. the entertainment takes place in settings that also are reasonable, appropriate and fitting to employees, their hosts and their business at hand; and
   
   
5. the employee is not tempted to give, and does not feel obligated to give, any special consideration to the individual or company providing the entertainment.