NANOMETRICS INCORPORATED
CODE OF BUSINESS CONDUCT AND ETHICS
(as approved by the Audit Committee of the Board of Directors
on November 18, 2003)
NANOMETRICS INCORPORATED
CODE OF BUSINESS CONDUCT AND ETHICS
(as approved by the Audit Committee of the Board of Directors
on November 18, 2003)
I. INTRODUCTION
This Code of Business Conduct and Ethics (the "Code") is intended to
help ensure compliance with legal requirements and our standards of business
conduct. All officers, directors and employees of Nanometrics Incorporated (the
"Company") are expected to read and understand this Code, uphold these standards
in day-to-day activities, comply with all applicable policies and procedures,
and ensure that all agents, contractors and consultants are aware of, understand
and adhere to these standards.
Because the principles described in this Code are general in nature,
you also should review all applicable Company policies and procedures for more
specific instruction and contact the Human Resources Department or Legal
Department if you have any questions.
Nothing in this Code, in any company policies and procedures, or in
other related communications (verbal or written) creates or implies an
employment contract or term of employment.
We are committed to continuously reviewing and updating our policies
and procedures. This Code, therefore, is subject to modification. This Code
supersedes all other such codes, policies, procedures, instructions, practices,
rules or written or verbal representations to the extent they are inconsistent.
Please sign the acknowledgment form at the end of this Code and return
the form to the Human Resources Department indicating that you have received,
read, understand and agree to comply with the Code. The signed acknowledgment
form will be located in your personnel file.
II. COMPLIANCE IS EVERYONE'S BUSINESS
Ethical business conduct is critical to our business. As an officer,
director and/or employee, your responsibility is to respect and adhere to these
practices. Many of these practices reflect legal or regulatory requirements.
Violations of these laws and regulations can create significant liability for
you, the Company, its officers, directors and employees.
Part of your job and/or ethical responsibility is to help enforce this
Code. You should be alert to possible violations and promptly report possible
violations to the Human Resources Department or the Legal Department. You must
cooperate in any internal or external investigations of possible violations.
Reprisal, threats, retribution or retaliation against any person who has in good
faith reported a violation or a suspected violation of law, this Code or other
Company policies, or
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against any person who is assisting in any investigation or process with respect
to such a violation, is prohibited.
Violations of law, this Code, or other Company policies or procedures
should be promptly reported to the Human Resources Department or the Legal
Department. Violations of law, this Code or other Company policies or procedures
can lead to disciplinary action, up to and including termination.
In all cases, if you are unsure about the appropriateness of an event
or action, please seek assistance in interpreting the requirements of these
practices by contacting the Legal Department.
III. YOUR RESPONSIBILITIES TO THE COMPANY AND ITS SHAREHOLDERS
A. General Standards of Conduct
The Company expects all officers, directors, employees, agents,
contractors and consultants to exercise good judgment to ensure the safety and
welfare of officers, directors, employees, agents, contractors, and consultants
and to maintain a cooperative, efficient, positive, harmonious and productive
work environment and business organization. These standards apply while working
on our premises, at offsite locations where our business is being conducted, at
Company-sponsored business and social events, or at any other place where you
are a representative of the Company. Officers, directors, employees, agents,
contractors or consultants who engage in misconduct or whose performance is
unsatisfactory may be subject to corrective action, up to and including
termination. You should also be aware of our company policies for more detailed
specific situations.
B. Applicable Laws
All Company officers, directors, employees, agents, contractors and
consultants must comply with all applicable laws, regulations, rules and
regulatory orders. Company employees located outside of the United States must
comply with laws, regulations, rules and regulatory orders of the United States,
including the Foreign Corrupt Practices Act and the U.S. Export Control Act, in
addition to applicable local laws. Each officer, director, employee, agent,
contractor and consultant must acquire appropriate knowledge of the requirements
relating to his or her duties sufficient to enable him or her to recognize
potential dangers and to know when to seek advice from the Legal Department on
specific Company policies and procedures. Violations of laws, regulations, rules
and orders may subject the officer, director, employee, agent, contractor or
consultant to individual criminal or civil liability, as well as to discipline
by the Company. Such individual violations also may subject the Company to civil
or criminal liability or the loss of business.
C. Conflicts of Interest
Each of us has a responsibility to the Company, our shareholders and
each other to avoid any actual or apparent conflict of interest whenever
possible. Although this duty does not prevent us from engaging in personal
transactions and investments, it does demand that we avoid situations where a
conflict of interest might occur or appear to occur. The Company recognizes that
certain potential conflicts of interest may arise from time to time that may be
unavoidable. For this reason,
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all potential conflicts of interest must be reported to the subject individual's
supervisor and to the Company's Chief Financial Officer for review and approval.
A conflict of interest exists where the interests or benefits of one
person or entity conflict with the interests or benefits of the Company, unless
expressly approved by the Company. While it is difficult to exhaustively
identify what constitutes a conflict of interest, set forth below are general
examples of situations that could create a conflict of interest. Examples
include:
(i) Employment/Outside Employment. You are expected to devote
your full attention to the business interests of the Company. You are prohibited
from engaging in any activity that interferes with your performance or
responsibilities to the Company or otherwise is in conflict with or prejudicial
to the Company. Our policies prohibit any employee from accepting simultaneous
employment with a Company supplier, customer, developer or competitor, or from
taking part in any activity that enhances or supports a competitor's position.
In addition, you must disclose to the Company any interest that you have that
may conflict with the business of the Company. If you have any questions
regarding this requirement, you should contact your supervisor or the Human
Resources Department.
(ii) Outside Directorships. It is a conflict of interest to
serve as a director of any company that competes with the Company. Although you
may serve as a director of a Company supplier, customer, developer, or other
business partner, our policy requires that you first obtain approval from the
Company's Chief Financial Officer before accepting any such directorship. Such
approval may be conditioned upon the completion of specified actions. Any
compensation you receive should be commensurate to your responsibilities.
(iii) Business Interests. If you are considering investing in
a Company customer, supplier, developer or competitor, you first must take great
care to ensure that these investments do not compromise your responsibilities to
the Company. Many factors should be considered in determining whether a conflict
exists, including the size and nature of the investment, your ability to
influence the Company's decisions, your access to confidential information of
the Company or of the other company and the nature of the relationship between
the Company and the other company.
(iv) Related Parties. As a general rule, you should avoid
conducting Company business with a relative or significant other, or with a
business in which a relative or significant other is associated in any
significant role. Relatives include spouses, sisters, brothers, daughters, sons,
mothers, fathers, grandparents, aunts, uncles, nieces, nephews, cousins, step
relatives, and in-laws. Significant others include persons living in a spousal
(including same sex) or familial fashion with an employee.
If such a related party transaction is unavoidable, you must fully
disclose the nature of the related party transaction to the Company's Chief
Financial Officer. If determined to be material to the Company by the Chief
Financial Officer, the Company's Audit Committee must review and approve in
writing in advance such related party transactions. Any dealings with a related
party must be conducted in such a way that no preferential treatment is given to
the related party.
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The Company discourages the employment of relatives and significant
others in positions or assignments within the same department and prohibits the
employment of such individuals in positions that have a financial dependence or
influence (e.g., an auditing or control relationship or a supervisor/subordinate
relationship). If a question arises about whether a relationship is covered by
this policy, the Human Resources Department is responsible for determining
whether an applicant's or transferee's acknowledged relationship is covered by
this policy. Willful withholding of information regarding a prohibited
relationship/reporting arrangement may be subject to corrective action, up to
and including termination. If a prohibited relationship exists or develops
between two employees, the employee in the senior position must inform his/her
supervisor. The Company retains the prerogative to separate the individuals at
the earliest possible time, either by reassignment or by termination, if
necessary.
(v) Interested Party Transactions. In general, you should
avoid situations that give rise to apparent conflicts between your own private
interests and the interests of the Company. An interested party transaction
exists if an officer, employee or director would benefit, directly or
indirectly, from the payment of monies or other consideration by the Company to
a party or entity in which such person has a direct or indirect pecuniary
interest.
If you have any concerns about a proposed transaction that may appear
to be such an interested party transaction, you should consult the Legal
Department immediately.
D. Corporate Opportunities
Employees, officers and directors may not exploit for their own
personal gain opportunities that are discovered through the use of corporate
property, information or position unless the opportunity is disclosed fully in
writing to the Company's Board of Directors and the Board of Directors declines
to pursue such opportunity.
E. Protecting the Company's Confidential Information
The Company's confidential information is a valuable asset. The
Company's confidential information includes product architectures; source codes;
product plans and road maps; names and lists of customers, dealers, and
employees; and financial information. This information is the property of the
Company and may be protected by patent, trademark, copyright and trade secret
laws. All confidential information must be used for Company business purposes
only. Every officer, director, employee, agent, contractor or consultant must
safeguard it. THIS RESPONSIBILITY INCLUDES NOT DISCLOSING COMPANY CONFIDENTIAL
INFORMATION, SUCH AS INFORMATION REGARDING THE COMPANY'S PRODUCTS OR BUSINESS
OVER THE INTERNET. You also are responsible for properly labeling any and all
documentation shared with or correspondence sent to the Company's Legal
Department or outside counsel as "Attorney-Client Privileged." This obligation
extends to confidential information of third parties that the Company has
rightfully received under Non-Disclosure Agreements. See the Company's policy
dealing with Handling Confidential Information of Others set forth in Section
IV.D of this Code.
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(i) Proprietary Information and Invention Agreement. When you
joined the Company, you signed an agreement to protect and hold confidential the
Company's proprietary information. This agreement remains in effect for as long
as you work for the Company and after you leave the Company. Under this
agreement, you may not disclose the Company's confidential information to anyone
or use it to benefit anyone other than the Company without the prior written
consent of an authorized Company officer.
(ii) Disclosure of Company Confidential Information. To
further the Company's business, from time to time our confidential information
may be disclosed to potential business partners. Such confidential information,
however, never should be disclosed without carefully considering its potential
benefits and risks. If you determine, in consultation with your manager, if
applicable, and other appropriate Company management, that disclosure of
confidential information is necessary, you then must contact the Legal
Department to ensure that an appropriate written nondisclosure agreement is
signed prior to the disclosure. The Company has standard nondisclosure
agreements suitable for most disclosures. You must not sign a third party's
nondisclosure agreement or accept changes to the Company's standard
nondisclosure agreements without review and approval by the Company's Legal
Department. In addition, all Company materials that contain Company confidential
information, including presentations, must be reviewed and approved by the
Company's Legal Department prior to publication or use. Furthermore, any
employee publication or publicly made statement that might be perceived or
construed as attributable to the Company, made outside the scope of his or her
employment with the Company, must be reviewed and approved in writing in advance
by the Company's Legal Department and must include the Company's standard
disclaimer that the publication or statement represents the views of the
specific author and not of the Company.
(iii) Requests by Regulatory Authorities. The Company and its
officers, directors, employees, agents, contractors and consultants must
cooperate with appropriate government inquiries and investigations. In this
context, however, it also is important to protect the legal rights of the
Company with respect to its confidential information. All government requests
for information, documents or investigative interviews must be referred to the
Company's Legal Department. No financial information may be disclosed without
the prior approval of the Chief Financial Officer.
(iv) Company Spokespeople. Specific policies have been
established regarding who may communicate information to the press and the
financial analyst community. All inquiries or calls from the press and financial
analysts should be referred to the Chief Financial Officer. The Company has
designated its Chief Executive Officer and Chief Financial Officer as official
Company spokespeople for financial matters. The Company has designated its Chief
Executive Officer or Marketing and Sales Department as official Company
spokespeople for marketing, technical and other such information. These
designees are the only people who may communicate with the press on behalf of
the Company.
F. Obligations Under Securities Laws-"Insider" Trading
Obligations under the U.S. securities laws apply to everyone. In the
normal course of business, officers, directors, employees, agents, contractors
and consultants of the Company may come into possession of significant,
sensitive information. This information is the property of the
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Company -- you have been entrusted with it. You may not profit from it by buying
or selling securities yourself, or passing on the information to others to
enable them to profit or for them to profit on your behalf. The purpose of this
policy is both to inform you of your legal responsibilities and also to make
clear to you that the misuse of sensitive information is contrary to Company
policy and U.S. securities laws.
Insider trading is a crime, penalized by fines of up to $5,000,000 and
20 years in jail for individuals. In addition, the Securities and Exchange
Commission may seek the imposition of a civil penalty of up to three times the
profits made or losses avoided from the trading. Insider traders also must
disgorge any profits made. Finally, insider traders may be subjected to civil
liability in private lawsuits.
Employers and other controlling persons (including supervisory
personnel) also are at risk under U.S. securities laws. Controlling persons may,
among other things, face penalties of the greater of $5,000,000 or three times
the profits made or losses avoided by the trader if they recklessly fail to take
preventive steps to control insider trading.
Thus, it is important both to you and the Company that insider-trading
violations do not occur. You should be aware that stock market surveillance
techniques are becoming increasingly sophisticated, and the chance that U.S.
federal or other regulatory authorities will detect and prosecute even
small-level trading is significant. Insider trading rules are strictly enforced,
even in instances when the financial transactions seem small. You should contact
the Chief Financial Officer or the Legal Department if you are unsure as to
whether or not you are free to trade.
The Company has imposed a trading blackout period on directors,
executive officers and certain designated employees who, as a consequence of
their position with the Company, are more likely to be exposed to material
nonpublic information about the Company. These directors, executive officers and
employees generally may not trade in Company securities during the blackout
period.
For more details, and to determine if you are restricted from trading
during trading blackout periods, you should review the Company's Stock Trading
Policy for Insiders. You can request a copy of this policy from the Legal
Department.
G. Use of Company's Assets
(i) General. Protecting the Company's assets is a key
responsibility of every officer, director, employee, agent, contractor and
consultant. Care should be taken to ensure that assets are not misappropriated,
loaned to others, or sold or donated, without appropriate authorization. All
Company officers, directors, employees, agents, contractors and consultants are
responsible for the proper use of Company assets and must safeguard such assets
against loss, damage, misuse or theft. Company equipment and assets are to be
used for Company business purposes only. Officers, directors, employees, agents,
contractors and consultants may not use Company assets for personal use, nor may
they allow any other person to use Company assets. Employees who have any
questions regarding this policy should bring them to the attention of the
Company's Human Resources Department.
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(ii) Physical Access Control. The Company has and will
continue to develop procedures covering physical access control to ensure
privacy of communications, maintenance of the security of the Company
communication equipment, and safeguard Company assets from theft, misuse and
destruction. You are personally responsible for complying with the level of
access control that has been implemented in the facility where you work on a
permanent or temporary basis. You must not defeat or cause to be defeated the
purpose for which the access control was implemented.
(iii) Electronic Usage. The purpose of this policy is to make
certain that officers, directors, employees, agents, contractors and consultants
utilize electronic communication devices in a legal, ethical, and appropriate
manner. This policy addresses the Company's responsibilities and concerns
regarding the fair and proper use of all electronic communications devices
within the organization, including computers, e-mail, connections to the
Internet, intranet and extranet and any other public or private networks, voice
mail, video conferencing, facsimiles, and telephones. Posting or discussing
information concerning the Company's products or business on the Internet
without the prior written consent of the Company's Chief Financial Officer is
prohibited. Any other form of electronic communication used by officers,
directors, employees, agents, contractors and consultants currently or in the
future also is intended to be encompassed under this policy. It is not possible
to identify every standard and rule applicable to the use of electronic
communications devices. Officers, directors, employees, agents, contractors and
consultants, therefore, are encouraged to use sound judgment whenever using any
feature of our communications systems.
H. Maintaining and Managing Records
The purpose of this policy is to set forth and convey the Company's
business and legal requirements in managing records, including all recorded
information regardless of medium or characteristics. Records include paper
documents, CDs, computer hard disks, email, floppy disks, microfiche, microfilm
or all other media. The Company is required by local, state, federal, foreign
and other applicable laws, rules and regulations to retain certain records and
to follow specific guidelines in managing its records. Civil and criminal
penalties for failure to comply with such guidelines can be severe for officers,
directors, employees, agents, contractors, consultants and the Company, and
failure to comply with such guidelines may subject such individuals to
disciplinary action, up to and including termination of employment or business
relationship at the Company's sole discretion.
I. Payment Practices
(i) Accounting Practices. The Company's responsibilities to
its shareholders and the investing public require that all transactions fully
and accurately be recorded in the Company's books and records in compliance with
all applicable laws. False or misleading entries, unrecorded funds or assets, or
payments without appropriate supporting documentation and approval strictly are
prohibited and violate Company policy and the law. Additionally, all
documentation supporting a transaction fully and accurately should describe the
nature of the transaction and be processed in a timely fashion.
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(ii) Political Contributions. The Company reserves the right
to communicate its position on important issues to elected representatives and
other government officials. It is the Company's policy fully to comply with all
local, state, federal, foreign and other applicable laws, rules and regulations
regarding political contributions. Under no circumstances may the Company's
funds or assets must not be used for, or be contributed to, political campaigns
or political practices without the prior written approval of the Company's Chief
Financial Officer and, if required, the Board of Directors.
J. Foreign Corrupt Practices ActThe Company requires full compliance
with the Foreign Corrupt Practices Act (the "FCPA") by all of its officers,
directors, employees, agents, contractors and consultants.
The anti-bribery and corrupt payment provisions of the FCPA make
illegal any corrupt offer, payment, promise to pay, or authorization to pay any
money, gift, or anything of value to any foreign official, or any foreign
political party, candidate or official, for the purpose of influencing any act
or failure to act, in the official capacity of that foreign official or party or
inducing the foreign official or party to use influence to affect a decision of
a foreign government or agency, in order to obtain or retain business for
anyone, or direct business to anyone.
All Company officers, directors, employees, agents, contractors and
consultants whether located in the United States or abroad, are responsible for
FCPA compliance and the procedures to ensure FCPA compliance. All managers and
supervisory personnel are expected to monitor continued compliance with the FCPA
to ensure compliance with the highest moral, ethical and professional standards
of the Company.
K. Export Controls
A number of countries maintain controls on the destinations to which
products or software may be exported. Some of the strictest export controls are
maintained by the United States against countries that the U.S. government
considers unfriendly or as supporting international terrorism. The U.S.
regulations are complex and apply both to exports from the United States and to
exports of products from other countries, when those products contain
U.S.-origin components or technology. Software created in the United States is
subject to these regulations even if duplicated and packaged abroad. In some
circumstances, an oral presentation containing technical data made to foreign
nationals in the United States may constitute a controlled export. The Legal
Department can provide you with guidance on which countries are prohibited
destinations for Company products or whether a proposed technical presentation
to foreign nationals may require a U.S. Government license.
L. Public Disclosure of Information
The federal securities laws require the Company to disclose certain
information in various reports that the Company must file with or submit to the
SEC. In addition, from time to time the Company makes other public
communications, such as issuing press releases.
The Company expects its Chief Executive Officer, Chief Financial
Officer and all other officers, directors and employees who are involved in the
preparation of SEC reports or other public
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documents to ensure that the information disclosed in those documents is full,
fair, accurate, timely and understandable.
Moreover, if any officer, director or employee becomes aware of any
material information that you believe should be disclosed to the public in the
Company's reports filed with the SEC, it is your responsibility to bring such
information to the attention of the Chief Financial Officer or any member of the
Legal Department. To the extent that you reasonably believe that questionable
accounting or auditing conduct or practices have occurred or are occurring, you
should report those concerns to the Chief Financial Officer or the Legal
Department.
IV. RESPONSIBILITIES TO OUR CUSTOMERS AND OUR SUPPLIERS
A. Customer Relationships
If your position puts you in contact with any Company customers or
potential customers, it is critical for you to remember that you represent the
Company to the people with whom you are dealing. Act in a manner that creates
value for our customers and helps to build a relationship based upon trust. The
Company and its employees have provided products and services for many years and
have built up significant goodwill over that time. This goodwill is one of our
most important assets and the Company officers, directors, employees, agents,
contractors and consultants must act to preserve and enhance our reputation.
B. Payments or Gifts from Others
Under no circumstances may officers, directors, employees, agents,
contractors or consultants accept any offer, payment, promise to pay, or
authorization to pay any money, gift, or anything of value from customers,
vendors, consultants, etc. that is perceived as intended, directly or
indirectly, to influence any business decision, any act or failure to act, any
commitment of fraud, or opportunity for the commission of any fraud. Inexpensive
gifts, infrequent business meals, celebratory events and entertainment, provided
that they are not excessive or create an appearance of impropriety, do not
violate this policy. Questions regarding whether a particular payment or gift
violates this policy are to be directed to Human Resources or the Legal
Department.
C. Publications of Others
The Company subscribes to many publications that help officers,
employees, agents, contractors and consultants better perform their jobs. These
publications include newsletters, reference works, online reference services,
magazines, books, and other digital and printed works. Copyright law generally
protects these works, and their unauthorized copying and distribution constitute
copyright infringement. You first must obtain the consent of the publisher of a
publication before copying publications or significant parts of them. When in
doubt about whether you may copy a publication, consult the Legal Department.
D. Handling the Confidential Information of Others
The Company has many kinds of business relationships with many
companies and individuals. Sometimes companies or individuals will volunteer
confidential information about their
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products or business plans to induce the Company to enter into a business
relationship. At other times, we may request that a third party provide
confidential information to permit the Company to evaluate a potential business
relationship with that party. Whatever the situation, we must take special care
to handle the confidential information of others responsibly. We handle such
confidential information in accordance with our agreements with such third
parties.
(i) Appropriate Nondisclosure Agreements. Confidential
information may take many forms. An oral presentation about a company's product
development plans may contain protected trade secrets. A customer list or
employee list may be a protected trade secret. A demo of an alpha version of a
company's new software may contain information protected by trade secret and
copyright laws.
You never should accept information offered by a third party that is
represented as confidential, or which appears from the context or circumstances
to be confidential, unless an appropriate nondisclosure agreement has been
signed with the party offering the information. THE LEGAL DEPARTMENT CAN PROVIDE
NONDISCLOSURE AGREEMENTS TO FIT ANY PARTICULAR SITUATION AND WILL COORDINATE
APPROPRIATE EXECUTION OF SUCH AGREEMENTS ON BEHALF OF THE COMPANY. Even after a
nondisclosure agreement is in place, you only should accept the information
necessary to accomplish the purpose of receiving it, such as a decision
regarding whether to proceed in negotiating a deal. If more detailed or
extensive confidential information is offered and it is not necessary for your
immediate purposes, it should be refused.
(ii) Need-to-Know. Once a third party's confidential
information has been disclosed to the Company, we have an obligation to abide by
the terms of the relevant nondisclosure agreement, limit its use to the specific
purpose for which it was disclosed and disseminate it only to other Company
employees with a need to know the information. Every officer, director,
employee, agent, contractor and consultant involved in a potential business
relationship with a third party must understand and strictly observe the
restrictions on the use and handling of confidential information. When in doubt,
consult the Legal Department.
(iii) Notes and Reports. When reviewing the confidential
information of a third party under a nondisclosure agreement, it is natural to
take notes or prepare reports summarizing the results of the review and, based
partly on those notes or reports, to draw conclusions about the suitability of a
business relationship. Notes or reports, however, can include confidential
information disclosed by the other party and so only should be retained long
enough to complete the evaluation of the potential business relationship.
Subsequently, they either should be destroyed or turned over to the Legal
Department for safekeeping or destruction. These materials should be treated as
any other disclosure of confidential information is treated: marked as
confidential and distributed only to those the Company officers, directors,
employees, agents, contractors or consultants with a need to know.
(iv) Competitive Information. You never should attempt to
obtain a competitor's confidential information by improper means, and you should
especially never contact a competitor regarding their confidential information.
While the Company may, and does, employ former
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employees of competitors, we recognize and respect the obligations of those
employees not to use or disclose the confidential information of their former
employers.
E. Selecting Suppliers
The Company's suppliers make significant contributions to our success.
To create an environment where our suppliers have an incentive to work with the
Company, they must be confident that they will be treated lawfully and in an
ethical manner. The Company's policy is to purchase supplies based on need,
quality, service, price, terms and conditions. The Company's policy is to select
significant suppliers or enter into significant supplier agreements through a
competitive bid process where possible. Under no circumstances should any
officer, director, employee, agent, contractor or consultant attempt to coerce
suppliers in any way.
F. Government Relations
It is the Company's policy to fully comply with all applicable laws and
regulations governing contact and dealings with government employees and public
officials, and to adhere to high ethical, moral and legal standards of business
conduct. This policy includes strict compliance with all local, state, federal,
foreign and other applicable laws, rules and regulations. If you have any
questions concerning government relations you should contact the Company's Legal
Department.
G. Lobbying
Officers, directors, employees, agents, contractors or consultants
whose work requires lobbying communication with any member or employee of a
legislative body or with any government official or employee in the formulation
of legislation must have prior written approval of such activity from the Legal
Department. Activity covered by this policy includes meetings with legislators
or members of their staffs or with senior executive branch officials.
Preparation, research, and other background activities that are done in support
of lobbying communication also are covered by this policy even if the
communication ultimately is not made.
H. Government Contracts
It is the Company's policy to fully comply with all applicable laws and
regulations that apply to government contracting. It also is necessary to
strictly adhere to all terms and conditions of any contract with local, state,
federal, foreign or other applicable governments. The Company's Legal Department
must review and approve all contracts with any government entity.
I. Free and Fair Competition
Most countries have well-developed bodies of law designed to encourage
and protect free and fair competition. The Company is committed to obeying both
the letter and spirit of these laws. The consequences of not doing so can be
severe for all of us.
These laws often regulate the Company's relationships with its
distributors, resellers, dealers, and customers. Competition laws generally
address the following areas: pricing practices (including price discrimination),
discounting, terms of sale, credit terms, promotional allowances, secret
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rebates, exclusive dealerships or distributorships, product bundling,
restrictions on carrying competing products, termination, and many other
practices.
Competition laws also govern, usually quite strictly, relationships
between the Company and its competitors. As a general rule, contacts with
competitors should be limited and always should avoid subjects such as prices or
other terms and conditions of sale, customers, and suppliers. Officers,
directors, employees, agents, contractors or consultants of the Company may not
knowingly make false or misleading statements regarding its competitors or the
products of its competitors, customers or suppliers. Participating with
competitors in a trade association or in a standards creation body is acceptable
when the association has been properly established, has a legitimate purpose,
and has limited its activities to that purpose.
No officer, director, employee, agent, contractor or consultant shall
at any time or under any circumstances enter into an agreement or understanding,
written or oral, express or implied, with any competitor concerning prices,
discounts, other terms or conditions of sale, profits or profit margins, costs,
allocation of product or geographic markets, allocation of customers,
limitations on production, boycotts of customers or suppliers, or bids or the
intent to bid or even discuss or exchange information on these subjects. In some
cases, legitimate joint ventures with competitors may permit exceptions to these
rules, as may bona fide purchases from or sales to competitors on
non-competitive products, but the Company's Legal Department must review all
such proposed ventures in advance. These prohibitions are absolute and strict
observance is required. Collusion among competitors is illegal and the
consequences of a violation are severe.
Although the spirit of these laws, known as "antitrust," "competition,"
or "consumer protection" or unfair competition laws, is straightforward, their
application to particular situations can be quite complex. To ensure that the
Company fully complies with these laws, each of us should have a basic knowledge
of them and should involve our Legal Department early on when questionable
situations arise.
J. Industrial Espionage
It is the Company's policy to lawfully compete in the marketplace. This
commitment to fairness includes respecting the rights of our competitors and
abiding by all applicable laws in the course of competing. The purpose of this
policy is to maintain the Company's reputation as a lawful competitor and to
help ensure the integrity of the competitive marketplace. The Company expects
its competitors to respect our rights to lawfully compete in the marketplace and
we must equally respect their rights to do the same. Company officers,
directors, employees, agents, contractors and consultants may not steal or
unlawfully use the information, material, products, intellectual property, or
proprietary or confidential information of anyone including suppliers,
customers, business partners or competitors.
V. WAIVERS
Any waiver of any provision of this Code for a member of the Company's
Board of Directors or an executive officer must be approved in writing by the
Company's Board of Directors and promptly disclosed. Any waiver of any provision
of this Code with respect to any other officer,
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employee, agent, contractor or consultant must be approved in writing by the
Company's Chief Financial Officer.
VI. DISCIPLINARY ACTIONS
The matters covered in this Code are of the utmost importance to the
Company, its shareholders and its business partners, and are essential to the
Company's ability to conduct its business in accordance with its stated values.
We expect all of our officers, directors, employees, agents, contractors and
consultants to adhere to these rules in carrying out their duties for the
Company.
The Company will take appropriate action against any officer, director,
employee, agent, contractor or consultant whose actions are found to violate
these policies or any other policies of the Company. Disciplinary actions may
include immediate termination of employment or business relationship at the
Company's sole discretion. If the Company has suffered a loss, then it may
pursue its remedies against the individuals or entities responsible. If laws
have been violated, then the Company will fully cooperate with the appropriate
authorities.
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VII. ACKNOWLEDGMENT OF RECEIPT OF CODE OF BUSINESS CONDUCT AND ETHICS
I have received and read the Code of Business Conduct and Ethics of
Nanometrics Incorporated (the "Code of Business Conduct and Ethics"). I
understand the standards and policies contained in the Code of Business Conduct
and Ethics and understand that there may be additional policies or laws specific
to my position. I further agree to comply with the Code of Business Conduct and
Ethics.
If I have questions concerning the meaning or application of the Code
of Business Conduct and Ethics, any company policies or the legal and regulatory
requirements applicable to my position, I know I can consult my manager, is
applicable, the Human Resources Department or the Legal Department and that my
questions or reports to these sources will be maintained in confidence.
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Employee Name
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Signature
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Date
Please sign and return this form to the Human Resources Department.