May 21, 2002
To: Ladish Co., Inc. Employees Required to Certify Compliance with Subject
Policy
From: Wayne E. Larsen, Vice President Law/Finance
Subject: LADISH CO., INC. POLICIES REGARDING - I. CONFLICT OF INTEREST, II.
COMPLIANCE WITH ANTITRUST LAWS, III. IMPROPER PAYMENTS, IV.
FALSIFICATION OF RECORDS, AND V. INSIDER TRADING
I. CONFLICT OF INTEREST
A. Policy - It is the policy of Ladish to prohibit employees from obtaining
a personal financial interest in any company, or transaction, with which
Ladish is doing business. Further, employees shall not use or disclose
confidential, nonpublic information of Ladish for their own personal,
financial benefit.
B. Guidelines - The following activities and examples are provided to
assist employees in identifying potential problems in this area. The list
is not all inclusive and employees are encouraged to refer any questions in
this area to corporate legal.
1. Employees should not, directly or indirectly, solicit or accept any
gift, payment, excessive entertainment, loan, service or anything of
value from any person or company which does, or seeks to do, business
with Ladish.
2. General transactions between Ladish and businesses in which an
employee, or a member of his immediate family, has a substantial
interest should be avoided.
3. Employees should not serve, or be associated in any capacity with
any person or concern which does business with Ladish or competes with
Ladish.
4. Employees must not use corporate assets for their own personal
benefit.
5. The use or disclosure of nonpublic, confidential or inside
information of, or about, the Company by an employee is prohibited.
6. Ladish employees may have ownership interests in concerns which do
business with Ladish providing that ownership interest is not of
sufficient size (5% or more) as to render the Ladish employee a
controlling person of the concern.
II. COMPLIANCE WITH ANTITRUST LAWS
A. Policy - It is Ladish's policy that the federal and state antitrust laws
be complied with by all employees. A violation of these laws can be a
criminal, as well as a civil, offense and can subject the employee and
Ladish to significant penalties and possible imprisonment of the employee.
The basic federal and state antitrust laws are set forth in statutes which
appear to be relatively simple. In reality this area of the law is
extremely complex as a result of many
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Ladish Co., Inc. Policies (cont'd) May 21, 2002
years of court interpretation. Thus, even seemingly innocuous questions in
this area should be referred to corporate legal for review.
B. Guidelines - A general guideline by which to base your conduct in this
area is "to conduct your business in an independent, ethical manner,
without the aid or assistance of any competitor." The following list of
guidelines is intended to be a starting point and is not all inclusive.
Particular problems should be directed to corporate legal.
1. Don't attend any meetings, discussions or informal gatherings where
a competitor is present and at which prices are discussed or
mentioned.
2. Don't exchange any price information with a competitor at any time,
whether during business hours or not.
3. Don't talk to or with competitors about terms or conditions of
sale, production levels, distribution practices, or territories of
sale.
4. Don't talk to competitors about dividing up product markets,
geographic markets, or customers.
5. Don't be a member of a trade association where prices are discussed
or mentioned and leave immediately if someone begins to talk about
price or other terms and conditions of sale.
6. Don't tell your customer to whom or at what price he must resell
your product.
7. Don't restrict the selling territory of any customer.
8. Don't charge two competing customers different prices for the same
product, unless the lower price is cost justified or meeting of a
competitive price.
9. Don't try to justify different prices to two competing customers at
the same level of distribution (e.g. wholesalers) by attempting to say
one is at a different level of distribution (e.g. retailer) if there
is no substantial difference in their actual function.
10. Don't offer to furnish advertising or promotional allowances or
services to a customer unless you also make these available to all
competing customers.
11. Don't prohibit a customer from buying a competitor's product.
12. Don't require a customer to buy an unwanted product in order for
him to be able to buy the product he wants from you.
13. Don't use your buying power as an aid to selling your products to
your suppliers.
14. Don't use loose talk when dealing with competitors; remember that
such conversations can be illegal under the antitrust laws.
15. Don't agree with competitors (a) to fix price of a bid on a job or
(b) who will bid on particular jobs, or (c) to refuse to bid on jobs.
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Ladish Co., Inc. Policies (cont'd) May 21, 2002
III. IMPROPER PAYMENTS
A. Policy - It is the policy of Ladish to conduct its business with the
highest integrity and in strict compliance with the letter and the spirit
of the law. As such, Ladish expects its employees to comply with the law in
all matters and to refrain from assisting others to violate or improperly
evade the laws of this, or any other, country.
Should an employee of Ladish fail to comply with this policy and
intentionally violates the law, that act will constitute grounds for
dismissal with cause. In addition, Ladish will have no further obligation
to provide a defense for the individual or indemnify him/her for said acts.
B. Guidelines - The following acts are considered to be improper business
payments and employees are prohibited from entering into any transaction on
behalf of Ladish which would provide for:
1. Bribes, payoffs or kickbacks made directly or indirectly to obtain
an advantage in a commercial transaction.
2. Gifts, gratuities, entertainment or similar payments, except to the
extent customary and provided they are reasonable in amount (gifts and
gratuities - either given or received shall not exceed $25.00 in
value) and not in consideration for any improper action by the
recipient.
3. No gratuity or gift may be provided to an employee of the Unites
States Government, or any branch, agency or department thereof.
4. Agency or distributor commissions or discounts, and consulting or
professional fees, not reasonably related in value to the services
performed.
5. Corporate political contributions, direct or indirect, to any party
or campaign in the United States or from within the United States to
any foreign candidate, party or campaign.
IV. FALSIFICATION OF RECORDS
A. Policy - It is the policy of Ladish to comply with the contractual
commitments it undertakes with its customers, including the United States
Government. A portion of that commitment is to assure that the customers
are receiving what was contractually required and that all representations
regarding the products are accurate and complete. The intentional
concealment of defective material or falsification of records could
threaten lives and may likely subject the individual and the Company to
criminal and civil prosecution.
B. Guidelines - The following activities and examples are provided to
assist employees in identifying potential problems in this area. The list
is not all inclusive and employees are encouraged to refer any questions in
this area to corporate legal.
1. Employees must not willfully conceal defective work or misrepresent
the quality of the work or the material.
2. No document, or entry thereon, is to be falsified or intentionally
altered. This includes certifications, shop records, test reports,
correspondence, etc.
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Ladish Co., Inc. Policies (cont'd) May 21, 2002
3. Unless appropriate permission has been received from the customer,
or the author of the requirement, there should be no deviation from
contract requirements, including specifications, drawings, etc.
V. INSIDER TRADING
A. Policy - It is Ladish policy that federal and state securities laws be
complied with by all employees. This area of the law is extremely complex
and a violation of these laws can subject an employee and Ladish to
material penalties and possible imprisonment of the employee. Particular
questions should be addressed to corporate legal.
B. Guidelines - The federal securities laws prohibit you from purchasing
and selling the Company's stock while in possession of "material" nonpublic
information about Ladish. "Material" information generally means
information which is likely to have an impact on the market price or
trading volume of Ladish stock. The following guidelines are not all
inclusive and any questions should be referred to corporate legal.
1. Avoid buying or selling Ladish stock within two weeks prior to and
after the end of a fiscal quarter until three days after the Company
publicly announces earnings.
2. Do not disclose "material" information to third parties outside of
Ladish. It could subject you and the recipient to liability for
"tipping."
3. The only persons authorized to discuss the financial performance of
the Company with analysts or the investment community are the CEO and
CFO.
4. Purchases of Ladish stock through an independent vehicle, such as a
mutual fund, are not as strictly controlled as individual purchases of
Ladish stock directly.
5. Any questions in this area should be referred to corporate legal.
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