Exhibit 99.5
LORAL SPACE & COMMUNICATIONS INC.
CODE OF CONDUCT
NOVEMBER 23, 2005
1. INTRODUCTION
This Code of Conduct (this "Code") sets forth the legal and ethical standards
to which all directors, executive officers and employees (the "associates")
of Loral Space & Communications Inc. and its subsidiaries ("Loral," or the
"Company") are required to adhere. Associates, as well as temporary employees
and consultants, are expected to comply with this Code. This Code serves as a
guide to associates for the proper recognition and resolution of ethical and
legal issues encountered in conducting the Company's business and in making
decisions that conform to ethical and legal standards. This Code may be
modified from time to time, without prior notice, as the Company's Board of
Directors deems appropriate.
A. GENERAL POLICY
It is the standard of conduct and express policy of Loral that all
dealings with our customers, suppliers, competitors, partners and
co-workers are conducted with the highest level of ethical behavior and in
complete compliance with the spirit and the letter of applicable laws and
regulations. This is important in our dealings with commercial companies
as well as with the United States government and foreign governments.
Improper activities, or even the appearance of impropriety, could result
in serious consequences to the Company and the associates involved in such
activities. An associate's adherence to this policy is a significant
indicator of the individual's judgment and competence, and will be taken
into consideration when evaluating future assignments and promotions.
Insensitivity to, or disregard for, the principles set forth in this Code
will be grounds for appropriate disciplinary action, including dismissal.
Loral's objective is to excel as a responsible and reputable supplier to
our customers. In attaining this objective, no associate shall, on behalf
of Loral or while a Loral associate, engage in any conduct that violates
any law or is otherwise inconsistent with the highest levels of honesty
and integrity. Complex laws and regulations govern the environment in
which Loral does business. This Code outlines key aspects of those laws
and regulations as well as relevant Loral policy.
Individual associates may require additional training in certain areas to
ensure compliance. If, for example, you have contact with representatives
of foreign organizations, you must ensure that you are familiar with
import and export regulations, and the provisions of the Anti-Boycott Act
and the Foreign Corrupt Practices Act. If you have any questions about the
applicability of any laws to your actions, you should consult with Loral
legal counsel.
B. SCOPE
Associates with supervisory responsibilities must ensure that employees
under their direction or control are acquainted with this Code. Directors
and officers should also be aware that there are special legal
requirements not covered by this Code that apply to corporate fiduciaries.
Conduct contrary to these guidelines is outside the scope of any
employee's employment.
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In addition to compliance with all legal requirements, each Loral
associate must adhere to the overriding ethical and professional standards
that generally govern the conduct of business. The Company's interests are
not served by any unethical practice or activity even though such practice
or activity may not be in technical violation of the law. The scope of
this Code may not include all Loral policies and practices to which
associates are required to adhere. In instances in which other such other
policies and practices appear to conflict with those set forth in this
Code, associates must follow the more restrictive policy or practice.
Associates should consider this Code as a baseline, or a minimum
requirement, which must always be followed. If at any time you are in
doubt about whether a particular provision applies to your conduct or
about any aspect of your compliance responsibilities, you should contact
your manager or supervisor, or use other resources described in this Code
to address your concern.
C. VIOLATIONS OF THE CODE
Any violation of the applicable laws and regulations or principles of
ethics set forth in this Code will be grounds for disciplinary action or
discharge from employment and may subject the associate or former
associate to civil liability and/or criminal prosecution under applicable
law. Disciplinary action may be taken not only against those who authorize
or participate directly in such violation, but also against: (i) any
associate who deliberately fails to report a violation as required by the
policy; (ii) any associate who deliberately withholds material and
relevant information concerning a violation; or (iii) the violator's
supervisor and manager, to the extent that there is inadequate leadership,
supervision or diligence.
2. EMPLOYMENT PRACTICES
A. EQUAL EMPLOYMENT OPPORTUNITY; NON-DISCRIMINATION IN COMPANY BUSINESS;
HARASSMENT
Loral strives to provide a productive workplace free from all types of
discrimination and harassment. Discrimination based on race, color,
religion, national origin, gender, age, disability, marital status, or any
other unlawful factor is not tolerated. Discrimination in recruiting,
hiring, pay practices, employee benefit programs, promotions, transfers,
career development, terminations, or layoffs is prohibited at Loral.
Conduct that creates an offensive or intimidating work environment is
unacceptable at Loral. Such conduct may include, but is not limited to,
racist, sexist, or ethnic comments or jokes; sexual advances or
inappropriate physical contact; or sexually oriented gestures, pictures,
jokes, or statements.
B. ENVIRONMENTAL SAFETY
Loral is committed to achieving the highest standards of safety, health
and environmental performance at all of its facilities. It is the
responsibility of each associate to follow the rules and procedures
established at each facility to achieve these safety, health and
environmental goals. Associates must immediately report any incident of
non-compliance or any unsafe condition to the facility's environmental,
health and safety coordinator.
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3. BUSINESS CONDUCT OF ASSOCIATES
It is every associate's responsibility to read, understand, and comply with
this Code. Further, each associate is responsible for knowing his or her job
and what it takes to comply with the rules and regulations relating to the
performance of that job. Managers, supervisors and employees jointly share
the responsibility of identifying training needs required to assist employees
in job performance and in complying with this Code. If an associate wishes to
obtain guidance on the interpretation or application of this Code or
applicable laws and regulations, they may contact any one of the sources
listed under the heading "Reporting Violations."
A. COMPLIANCE WITH LAWS, RULES AND REGULATION
Obeying the law, both in letter and in spirit, is the foundation on which
Loral's ethical standards are built. All associates must respect and obey
the laws of the cities, states and countries in which Loral operates.
Although not all associates are expected to know the details of these
laws, it is important to know enough to determine when to seek advice from
supervisors, managers or other appropriate personnel.
Loral will not knowingly assist other persons or entities with which we
have business dealings in violating any law or regulation. For example, we
will not misrepresent or confirm facts known to be false to the auditors
of a customer or supplier for the purpose of allowing the customer or
supplier to prepare false financial statements or financial information.
We specifically direct the associates' attention to Section 7, which
describes some of the requirements of the Foreign Corrupt Practices Act
and U.S. export control laws that may be applicable to the associates.
If necessary, Loral will hold information and training sessions to promote
compliance with laws, rules and regulations, including insider-trading
laws.
B. AVOIDANCE OF CONFLICT OF INTEREST
A conflict of interest exists when a person's private interest interferes
in any way with the interests of the Company. A conflict situation can
arise when an associate takes actions or has interests that may make it
difficult to perform his or her Company work objectively and effectively.
Conflicts of interests may also arise when an associate, or members of his
or her family, receives improper personal benefits as a result of his or
her position in the Company. Loans to, or guarantees of obligations of,
associates and their family members may create conflicts of interest.
Loral associates must observe high standards of conduct and integrity in
their relationships with outside organizations. They must refrain from
having any financial or other interest in or relationship with an
organization that competes with or does business with Loral. Not only must
associates avoid unethical business practices and favoritism, they should
also avoid outside activities and financial interests that might create
that perception.
It is Loral's policy to respect the rights of associates to engage in
outside activities that do not conflict with their positions as
associates. However, when an outside activity or financial interest
involves an organization with which the Company does business,
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good judgment is required to avoid any basis for conflict of interest. No
associate may, without being granted an exception, acquire or retain,
either directly or indirectly, the following financial interests in an
organization that competes with, does business with, or seeks to do
business with Loral:
- Any interest as a proprietor or partner in such an organization;
- The ownership of, or right to acquire, stock or bonds of such an
organization that is a privately held corporation; or
- With respect to a publicly-owned corporation five percent (5%) or
more of the revenues of which are derived from Loral, the ownership of,
or right to acquire, stock or bonds in an amount in excess of the
lesser of (i) $25,000 or (ii) 1% of the total securities of such
publicly owned corporation.*
Each associate shall report to the operating unit president the details on
any of the financial interests described above that are held or acquired,
directly or indirectly, by himself or herself or any family member, to the
extent known by the associate.
The following restrictions also apply to associates:
- No associate may serve as an officer or director of any firm without
prior approval by the president and chief operating officer of Loral.
- No associate may undertake employment with, or furnish services as a
consultant or other representative to another firm, unless approved in
writing by the operating unit president.
- Employment of an associate's spouse or other immediate family member
by an organization with which Loral competes or does business could
provide the basis for criticism, and any such employment situations
should be reported to the president of the division.
Notwithstanding the foregoing, the provisions of this Section 3.B. shall
not apply to Loral's non-employee directors, provided, however that a
non-employee director shall, prior to engaging in any of the following,
notify the Board of Directors of his or her intention or the intention of
his or her spouse or immediate family member to commence (x) service as an
officer or director of any Competitor or (y) employment with, or the
furnishing of services as a consultant or other representative to, any
Competitor. For purposes of this paragraph, "Competitor" shall mean any of
the following: (i) Boeing, Lockheed, Alcatel Space or Astrium, (ii)
PanAmSat, SES Astra, Intelsat or New Skies Satellites, (iii) a business
that is principally engaged in the business of fixed satellite
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* * This restriction does not apply to employees who come to Loral from other
companies and who hold shares of those companies' stock in a savings plan or
stock ownership plan. This exception only applies to stock that was owned by the
employee prior to his or her employment with Loral, and that are held in those
investment instruments. Subject to the terms of the plan document, such
employees may keep stock that is in those investment instruments and any stock
dividends paid from those remaining in those investment instruments.
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services or satellite manufacturing or (iv) a business other than fixed
satellite services or satellite manufacturing in which the Company is
principally engaged.
C. CORPORATE OPPORTUNITIES
Associates are prohibited from taking personal advantage of opportunities
that are discovered through the use of Loral property, information or
position without the consent of the Board of Directors. Specifically:
- Associates may not use information about Loral or its business that
they have acquired in the course of their employment and that is not
available to the general public for their own private gain or
advantage, nor may they disclose such information to enable others to
profit from it. In particular, associates who have information that
could be expected to affect the price of Loral stock, or the stock of
another company with which Loral does business, should not buy or sell
such stock, unless the same information has been released to the
public.
- Associates should not place themselves in a situation in which they
may profit from a business opportunity if the circumstances indicate
that the opportunity should have been made available to Loral. In
general, a business opportunity which might reasonably be expected to
be of interest to Loral should be brought to the attention of
management for a determination of whether Loral wishes to pursue it.
- Associates may not use facilities or equipment of Loral in the
pursuit of personal interest or profit. Associates who are on paid
Loral time should be involved only in the business of Loral.
- Associates may not compete with Loral directly or indirectly.
Associates owe a duty to Loral to advance its legitimate interests when
the opportunity to do so arises.
D. INSIDER TRADING
Associates may not use information about Loral or its businesses that they
have acquired in the course of their employment and that is not available
to the general public for their own private gain or advantage, nor may
they disclose such information to enable others to profit from it. To use
non-public information for personal financial benefit or to "tip" others
is not only unethical but also illegal. In particular, employees who have
information that could be expected to affect the price of Loral stock, or
the stock of another company with which Loral does business, should not
buy or sell such stock, unless the same information has been released to
the public. The above restriction does not apply to Loral stock acquired
under the employee savings plan so long as any stock purchases under the
plan occur on a regular, automatic, and repeated basis. However,
discretionary transfers into and out of Loral stock in the employee
savings plan are subject to these restrictions.
E. PROPRIETARY INFORMATION / TRADE SECRETS
Loral proprietary information consists of any information and data
possessed by and in the control of the Company that may be valuable to it
in its business. Such information must not be disclosed to others, except
as required by law or permitted by Company
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policy, because doing so could disadvantage Loral competitively or
financially; because the information could hurt or embarrass, customers,
suppliers, joint venture partners, or the Company or because the
information belongs to others, and we have agreed to keep it private. When
there is a legitimate business need to disclose proprietary information
outside Loral, a non-disclosure agreement may be appropriate. For more
information and prior to disclosure, contact Loral legal counsel.
Proprietary information includes, but is not limited to:
- Loral research and development, such as inventions, patent
applications, and engineering and laboratory notebooks (see below);
- Customer and employee records;
- Business strategies, business results, unannounced products or
services, marketing plans, pricing, and financial data;
- Non-public information about products or services, including hardware
and software specifications and designs;
- Confidential organizational information; and
- Information disclosed by other parties pursuant to a non-disclosure
agreement.
Proprietary information may exist as reports, manuals, charts, computer
disks, drawings, specifications, photographs, films and correspondence.
Hardware, equipment or materials embodying proprietary information and
data may also be treated as proprietary information.
Each associate is responsible for ensuring that proprietary information is
protected from theft, damage, unauthorized disclosure, or inappropriate
use. Always store such information in a safe place and follow security
procedures for the computer systems used. Remember that you can be
overheard in public places and when using portable communications devices.
Do not discuss Loral proprietary information with family or friends; they
may not understand its significance and may inadvertently pass it on to
someone who should not have it.
i. "PATENTABLE" INVENTIONS
A "patentable" invention is one that constitutes a new, useful and
unobvious machine process, article of manufacture, composition of
matter, or improvement thereof (including software). All inventions
made or conceived by employees in the course of, or as a result of
their employment, are the exclusive property of Loral and are to be
promptly disclosed in writing and assigned to the Company.
Employees are responsible for maintaining a laboratory notebook to
record concepts, ideas and related work, together with the recording of
progress on technical efforts, in order to establish priority of
invention, provide a basis for patent coverage and protect future
proprietary rights of the Company.
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Licenses and copyrights obtained by employees in the course of, or as a
result of their employment, are the exclusive property of Loral and are
to be promptly disclosed in writing and assigned to the Company.
ii. COPYRIGHTED WORKS
Copyright laws protect the original expression in, among other things,
written materials, works of art, and music, and prohibit their
unauthorized duplication, distribution, display and performance. This
means that we may not reproduce, distribute, or alter copyrighted
materials from books, trade journals, computer software, or magazines,
or play records, tapes, discs, or videotapes, without permission of the
copyright owner or its authorized agents. Software used in connection
with Loral's business must be properly licensed and used only in
accordance with that license. Using unlicensed software could
constitute copyright infringement
F. FAIR DEALING
We believe our reputation for integrity is our most important asset. We
must deal fairly with customers, vendors, and competitors and fulfill our
obligations even when they are detrimental to our profitability. All
estimates and commitments to both customers and co-workers should be made
with the expectation that they will be achieved.
We seek to outperform our competition fairly and honestly. Stealing
proprietary information, possessing trade secret information that was
obtained without the owner's consent, or inducing such disclosures by past
or present associates of other companies is prohibited. Each associate
should endeavor to respect the rights of and deal fairly with Loral's
customers, suppliers, competitors and associates. No associate should take
unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other
intentional unfair-dealing practice.
G. ENTERTAINMENT, GIFTS AND GRATUITIES
It is Loral's policy that all dealings with other organizations be
conducted with the highest ethical behavior and in complete compliance
with applicable laws and regulations. Our business transactions should
always be free from even a perception that favorable treatment was sought
or received, offered, or solicited by gifts, favors, hospitality,
entertainment or similar gratuities. While there are certain circumstances
under which it is permissible to furnish or accept such items, every
employee is expected to follow a course of action that complies with the
following guidelines.
No associate may solicit, directly or indirectly, for his or her benefit
or for the benefit of another person, any gift, favor, or other gratuity
from a person or organization with which the Company does business or that
seeks to do business with the Company. Soliciting a gift, favor or other
gratuity is strictly prohibited regardless of the nature or value of the
item or service.
No Loral associate may accept any gratuities (monetary or non-monetary),
gifts or favors, except for ordinary items of nominal value, from a person
or organization that conducts business with the Company or seeks to do
business with the Company. Items
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of nominal value are considered to be normal sales promotion, advertising
or publicity items, with the provider's logo, e.g., calendars, ball point
pens, coffee cups, etc., with a retail value not exceeding $50. Loral
associates may accept a meal, drink or entertainment from such persons or
organizations only if these courtesies are unsolicited, infrequently
provided and reasonable in amount. Associates should reciprocate if and
when appropriate.
Loral associates should never offer any type of business courtesy to a
customer for the purpose of, or in exchange for, obtaining favorable
treatment or advantage. Except for restrictions that apply when dealing
with government representatives, associates may pay for reasonable
business-related meals, refreshments, and/or entertainment expenses for
customers and suppliers that are incurred only occasionally, are not
requested or solicited by the customer, and are not intended to or could
not reasonably be perceived as affecting business decisions.
H. MARKETING ACTIVITIES
Loral supports vigorous competition. We believe that enduring customer
relationships are built on integrity and trust. We seek to gain advantage
over our competitors only through superior research, engineering,
manufacturing, and marketing. It is our intention to win business through
excellent products and services, never through unethical or questionable
business practices. The marketplace requires the gathering of a wide range
of information in a systematic and legal manner. This information provides
an understanding of the industry structure and customer requirements for
existing or potential products and services of Loral. It is the policy of
Loral that its associates, consultants, agents and other representatives
will gather only information to which the Company is legally entitled.
Loral will neither seek nor accept any information that is prohibited from
disclosure by law, regulation or policy of the customer. Associates must
not:
- seek special treatment or data that are otherwise restricted;
- attempt to improperly influence specifications to gain unfair
advantage or limit competition; or
- seek access to classified or officially restricted information.
There must be no exchanges of unauthorized or so-called inside
information, or attempts to induce competitor employees or the government
to violate their standards of conduct by seeking information they cannot
properly provide.
I. MARKETING AND CONTRACTING WITH THE FEDERAL GOVERNMENT
Law forms a foundation for Loral's business activities. We must conduct
business in accordance with the laws of the cities, states and countries
where we operate. In dealings with the United States government, Loral
associates and other representatives who perform legislative liaison,
marketing, proposal, and/or contract activities should be especially
sensitive to the following regulations:
i. SPECIAL REQUIREMENTS IN DEALINGS WITH THE GOVERNMENT
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The Company must comply with special standards of conduct in
contracting with the federal government. Government representatives
shall not be offered or given, either directly or indirectly, anything
of value that they are prohibited from receiving by applicable agency
regulations. Loral associates dealing with representatives of a
particular federal agency are responsible for complying with that
agency's standards of conduct. Where there is a question as to a
particular agency's requirements under its standards of conduct,
associates must contact Loral legal counsel for guidance.
Except as otherwise permitted by law or regulation, Loral associates
are prohibited from paying for meals, refreshments, entertainment,
travel or lodging expenses for any U.S. government employee or
representative. One exception is that a meal may be provided on-site to
accommodate continuing business meetings with government employees.
Loral associates doing business with state or local government
officials are responsible for knowing and adhering to the rules that
may apply to such state or local government employees.
In certain instances where customs in foreign countries require the
exchange of gifts, the Company will provide the gift. Any gifts, other
than those of nominal value received from representatives of these
countries, will become Company property.
ii. PROCUREMENT INTEGRITY (FEDERAL PROCUREMENT POLICY ACT OF 1988)
The Federal Procurement Policy Act and Amendments of 1988 (the "Act")
impose certain restrictions on contractors, their employees,
representatives, agents and consultants during the conduct of any
federal agency procurement. In general, the Act prohibits the
following:
- Discussions or offers of future employment or business opportunities
to any procurement official;
- Offers of gratuities, money or anything of value to any procurement
official; or
- Attempts to obtain, or possession of, source-selection or proprietary
information from any agency employee.
The Act requires that certificates be completed by every Loral
associate and consultant who participates substantially in the
preparation of a proposal or contract negotiations, certifying that he
or she will comply with the Act and report any violations.
If any doubt exists as to whether a particular piece of information can
be rightfully obtained, the Loral associates or representatives who
wish to obtain such information that has not been publicly released
must first seek the advice of the contracting officer or the head of
the agency. Further, unauthorized offers to provide proprietary or
source-selection information must be refused and immediately reported
to Loral legal counsel.
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Because the procurement integrity provisions are complex, any questions
should be presented to your supervisor or manager to obtain appropriate
advice and guidance. Loral requires that its associates,
representatives, agents and consultants comply with this Act.
iii. TRUTH IN NEGOTIATIONS ACT
All proposals submitted to the U.S. government must comply with the
Federal Acquisition Regulations (FAR) and the proposed contract
requirements.
Where cost or pricing data are required to be submitted, such data must
be accurate, complete and current as of the date of final agreement on
price. Whether you are the contract negotiator the cost estimator or
the person responsible for furnishing the data to the cost estimator,
your must ensure that the data meet these FAR requirements;
- Accurate means free from error;
- Complete data means all facts that a prudent buyer or seller would
reasonably expect to have an effect on price negotiations, e.g.,
historic cost data, vendor quotations, "make or buy" decisions and
other management decisions that could have a significant bearing on
cost; and
- Current data means data that are up to date. Because many months may
pass after the original proposal and price were submitted, data should
be updated through the close of negotiations to ensure they are
current.
If you have any questions as to whether information is cost or pricing
data that must be disclosed to the government, you should seek advice
from Loral legal counsel. It is Loral's intention that all relevant
cost or pricing information will be disclosed to the government.
Falsely certifying facts or data used in government contracts, whether
unintentionally or deliberately, is a violation of U.S. laws and
contract requirements and may subject the Company and involved
associates to criminal, civil penalties, or administrative action.
iv. ANTI-KICKBACK ACT
Associates and representatives must comply with this law which
prohibits any individual or company from providing, attempting to
provide or soliciting, accepting or attempting to accept, any kickback.
"Kickback" is defined as any money, fee, commission, credit, gift,
gratuity, thing of value (including money, trips, tickets,
transportation, beverages, and personal services) or compensation of
any kind that is provided directly or indirectly to any individual or
company for the purpose of improperly obtaining or rewarding favorable
treatment in connection with a prime contract or subcontract/supplier
relating to a prime contract.
J. PROPER AND TIMELY REPORTING OF PUBLIC DOCUMENTS
As a public company, it is of critical importance that Loral's filings
with, and submissions to, the Securities and Exchange Commission, and
other public communications, be fair, accurate and timely. Depending on
his or her position with Loral, an associate may be called upon to provide
necessary information to assure that
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Loral's public reports are complete, fair and understandable. Loral
associates are expected to take this responsibility seriously and to
provide prompt and accurate answers to inquiries related to Loral's public
disclosure requirements.
K. ACCURACY OF DOCUMENTATION
Loral associates create various forms of records including reports and
correspondence, which may be in hard copy or electronic media. Business
records should include objective and verifiable factual information and
should be free from speculation and rumor, and from ambiguous or
misleading statements. Particular care must be taken to ensure that
statements made to the government and claims submitted to the government
are accurate. The government may impose severe penalties for false
statements or false claims.
i. REPORTING EXPENSE REIMBURSEMENTS
Those who submit expense reports and other forms requesting
reimbursement must follow their division procedures. Expense reports
should only contain charges actually incurred by the employee in
furtherance of Loral business. Expenses should be accurately described
so that unallowable expenses can be excluded from billings to the
government. The finance department will provide guidance if you have
any questions.
ii. REPORTING LABOR CHARGES
The accurate reporting of labor at Loral is both essential and
mandatory because it is the source for the charging of labor and the
distribution of overhead cost to a contract. You will accomplish this
by either completing a labor timecard or voucher or by entering your
time through an electronic labor reporting system.
When you report time being charged to a specific contract, the
following are some general "musts" to help you follow proper labor
charging practices. You MUST:
- Prepare your own voucher/timecard;
- Record time as work is performed;
- Obtain the charge number for the job(s) you are working on from your
immediate supervisor or his or her representative;
- Record time ONLY for the job(s) on which you are working;
- If you need to make a correction on a non-electronic labor reporting
system, draw a line through the error and write the proper entry on the
next line. You and your supervisor must initial each correction. For
electronic labor reporting, notify your supervisor promptly of any
corrections to incorrect entries; and
- Check and follow your division's specific guidelines for labor
reporting.
L. PRODUCING QUALITY PRODUCTS
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Loral is committed to delivering products with the highest levels of
quality and reliability consistent with each customer's requirements. To
achieve this goal, each associate must follow these guidelines:
- Make achievement of quality and excellence your personal goal;
- Strive to do each job right the first time;
- Comply with all contract requirements, including:
- Design requirements;
- Performing all inspections and tests specified in each contract;
- Preparing all required reports accurately and completely;
- Using only materials conforming to quality levels specified in each
contract; and
- Using only substitute materials that have been approved in writing by
the customer's representative. By providing quality products and
services, not only do we meet our customers' requirements, but also we
make the Company more competitive and stronger in the marketplace.
M. COMPANY FUNDS AND PROPERTY
All employees are responsible for safeguarding and making proper and
efficient use of Company funds and property by following procedures to
prevent their loss, theft, or unauthorized use. Company funds and property
include Company time; cash, checks, drafts, and charge cards; land and
buildings; records; vehicles; equipment, including fax machines, copiers,
and telephones; computer hardware and software; scrap and obsolete
equipment; and all funds and property.
The following are ways to protect company funds and property:
- Make sure expenditures are for legitimate business purposes;
- Keep accurate and complete records of funds spent;
- Use corporate charge cards only for business purposes or as specified
in Company instructions;
- Make sure computer and communications equipment and systems,
including passwords or other methods used to access or transmit data,
and the information they contain are protected against unauthorized
access, use, modification, destruction, or disclosure;
- Use Loral's trademarks and service marks in accordance with Company
instructions; and
- Report actual or suspected loss, damage, misuse, theft, embezzlement,
or destruction of Company funds or property immediately to TIM PERRY,
CORPORATE DIRECTOR OF SECURITY, BY CALLING (650) 852-4345.
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N. FOLLOWING SECURITY GUIDELINES
While Loral's customer base is now primarily commercial companies, Loral
continues to contract with the United States government or its prime
contractors. These contracts require the Company to implement and maintain
a system of security controls. As associates of Loral, we all are
individually responsible for safeguarding classified information. The
following are some of the key rules that associates must follow:
- Wear your badge prominently.
- Notify your supervisor of any circumstances that might embarrass or
damage the Company.
- Establish a system to ensure that unattended classified files are
always locked.
- Safeguard and transmit all classified material in accordance with
government and Loral requirements.
You are also prohibited from sending classified information via regular
mail. Additionally, you should never discuss classified information,
company plans or related information with family, friends or other
unauthorized persons.
You should be particularly careful when using phones of any type,
especially cellular phones, for sensitive or classified conversations.
This also applies to use of computer terminals, facsimile machines,
microwave equipment and other equipment used to transmit information or
data. Finally, do not bring a camera, sound recorder or computer onto
company property without a pass.
If you have any questions about security matters, contact your immediate
supervisor, security representative or Tim Perry, Corporate Director of
Security, at (650) 852-4345.
4. WAIVERS OF THE CODE
Any waiver of this Code for executive officers or directors may be made only
by the Board of Directors or a Board committee and will be promptly disclosed
to shareholders as required by law or stock exchange regulation. Any waiver
of this Code by employees may be made only with the consent of the Company's
General Counsel.
5. REPORTING VIOLATIONS
Loral is committed to maintaining an environment in which associates may
raise questions or report violations or suspected violations of this Code and
applicable governmental laws and regulations without fear of retribution.
Associates are encouraged to report all violations or suspected violations of
this Code or applicable government laws and regulations, and to talk to
supervisors, managers or other appropriate personnel when in doubt about the
best course of action in a particular situation, using the methods outlined
below. Associates are expected to cooperate in internal investigations of
misconduct. An associate who reports his or her own violation may still be
subject to disciplinary action.
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Loral will not allow retaliation for good faith reports of misconduct by
others made by associates. Any person who believes that he or she has been
subject to retaliation for reporting a violation or possible violation may
contact anyone designated below, and a prompt investigation will be
conducted.
A. EMPLOYEES. In the case of an employee, such employee may contact:
- The employee's immediate supervisor; or
- The supervisor's immediate supervisor; or
- The division's hotline. (All messages left on the hotline will be
safeguarded and reviewed only by the individual designated as responsible
for the investigation of employee reports.); or
- Karen Reinhold, Associate General Counsel of Loral Space &
Communications. The report may be made by calling (650) 852-7843, or by
mail to the following address:
Karen Reinhold
Space Systems/Loral, Inc.
MS-DO3
3825 Fabian Way
Palo Alto, CA 94303
B. DIRECTORS, EXECUTIVE OFFICERS AND ANY OTHER PERSONS SUBJECT TO THIS CODE.
In the case of a director, executive officer or any other person subject to
this Code, such person may contact:
- Karen Reinhold, Associate General Counsel of Loral Space &
Communications.
The report may be made by calling (650) 852-7843, or by mail to the following
address:
Karen Reinhold
Space Systems/Loral, Inc.
MS-DO3
3825 Fabian Way
Palo Alto, CA 94303
All associate reports will be forwarded to the designated investigator, who
will review them and, if appropriate, commence an immediate investigation.
Communications between the associate and the investigator will be kept
confidential to the fullest extent possible. The results will be reported to
division and corporate management, and the employee who made the initial
report will be advised as promptly as practicable, but in no event not more
than 90 days, of the progress of the investigation. If the report is made
anonymously, the associate may contact the investigator for status.
In addition, the Company has established an ethics hotline staffed with
persons who are not affiliated with the Company. Associates may call the
hotline anonymously at any time toll-free at 888-301-8628.
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6. ADDITIONAL PROCEDURES FOR THE CEO AND SENIOR FINANCIAL OFFICERS
All provisions of the Code bind the CEO, the CFO, the principal accounting
officer or controller and all persons performing similar functions (the
"senior financial officers"). In addition to the Code, the senior financial
officers are subject to the following additional specific policies:
A. All senior financial officers are responsible for full, fair, accurate,
timely and understandable disclosure in the periodic reports that are
required to be filed by the Company with the SEC and in the Company's other
public communications. Accordingly, it is the responsibility of each senior
financial officer to promptly bring to the attention of the management any
material information of which he or she may become aware that affects the
disclosures made by the Company in its public filings or public
communications or otherwise assist the management in fulfilling its
responsibilities.
B. Each senior financial officer shall promptly bring to the attention of the
management and the Audit Committee any information he or she may have
concerning (a) significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's ability to
record, process, summarize and report financial data or (b) any fraud,
whether or not material, that involves management or other associates who
have a significant role in the Company's financial reporting, disclosures or
internal controls.
C. Each senior financial officer shall promptly bring to the attention of the
management and to the Audit Committee any information he or she may have
concerning any violation of the Company's Code, including any actual or
apparent conflicts of interest between personal and professional
relationships, involving any members of management or other associates who
have a significant role in the Company's financial reporting, disclosures or
internal controls.
D. Each senior financial officer shall promptly bring to the attention of the
management and to the Audit Committee any information he or she may have
concerning evidence of a material violation of the securities or other laws,
rules or regulations applicable to the Company and the operation of its
business, by the Company or any agent thereof, or of violation of the Code or
of these additional procedures.
E. The Board of Directors shall determine, or designate appropriate persons
to determine, appropriate actions to be taken in the event of violations of
the Code or of these additional procedures by the senior financial officers.
Such actions shall be reasonably designed to deter wrongdoing and to promote
accountability for adherence to the Code and to these additional procedures,
and shall include written notices to the individual involved that the Board
has determined that there has been a violation, censure by the Board,
demotion or re-assignment of the individual involved, suspension with or
without pay or benefits (as determined by the Board) and termination of the
individual's employment. In determining what action is appropriate in a
particular case, the Board of Directors or such designee shall take into
account all relevant information, including the nature and severity of the
violation, whether the violation was a single occurrence or repeated
occurrences, whether the violation appears to have been intentional or
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inadvertent, whether the individual in question had been advised prior to the
violation as to the proper course of action and whether or not the individual
in question had committed other violations in the past.
7. A. FOREIGN CORRUPT PRACTICES ACT
Loral complies, and requires that all its associates worldwide and its
joint ventures, agents, distributors and other representatives comply with
the letter and the spirit of the Foreign Corrupt Practices Act ("FPCA").
The primary purpose of the FCPA is to prohibit the payment of bribes, in
any form, to foreign officials in order to secure or retain business.
Specifically, the FCPA prohibits the giving or offering of anything of
value (hereinafter referred to as "bribes") to foreign officials, foreign
political parties or candidates for foreign political office in order to
obtain, keep or direct business or otherwise obtain a business advantage.
It is important to note that the FCPA's prohibitions are not limited to
monetary payments but can include a wide range of non-monetary benefits as
well. Also prohibited are indirect bribes made through an intermediary
(such as an agent, representative or consultant) knowing that there is a
high probability that the intermediary will use all or a portion of the
bribe for a prohibited purpose.
In addition, the FCPA includes certain requirements with respect to
accounting records that are designed, among other things, to prevent
concealment of bribes. The FCPA requires that Loral's books, records and
accounts be kept accurately to reflect all transactions and disposition of
Company assets. The following are specifically prohibited: maintaining
secret or unrecorded funds or assets; falsifying records; and providing
misleading or incomplete financial information for audit.
Violation of the FCPA may result in civil and criminal prosecution. Loral
may be fined up to $2 million or twice the gross gain or loss from the
offense, whichever is greater. An individual may be fined $250,000 or
twice the gain or loss from the offense, whichever is greater, and may be
subject to imprisonment for up to five years. Loral will not pay fines
imposed on individuals. Loral will take all necessary disciplinary action,
including possible dismissal, against associate violating these policies.
There are three types of payments that may be permissible under the FCPA.
The first is a payment to facilitate or expedite performance of routine
governmental action. "Facilitating or expediting payments" are those that
relate to the performance of non-discretionary action. Examples include
obtaining permits, licenses or other official documents; processing
governmental papers, such as visas and work orders; providing police
protection and mail pick-up and delivery; providing phone service; power
and water supply; loading and unloading cargo or protecting perishable
products; and scheduling inspections associated with contract performance
or transit of goods across country. The second is a payment that is
reasonable in amount and is directly related to the promotion,
demonstration or explanation of a product or the execution of a government
contract. These payments may include travel and lodging expenses. The
third is a payment that is lawful under the written laws or regulations of
a foreign country. THE APPLICATION OF THESE EXCEPTIONS TO A PARTICULAR
SITUATION INVOLVES A LEGAL
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DETERMINATION, AND ASSOCIATES SHOULD CONSULT WITH THEIR LEGAL DEPARTMENT
PRIOR TO AUTHORIZING ANY PAYMENTS UNDER ONE OF THESE EXCEPTIONS.
Loral has established procedures to reduce the likelihood of prohibited
bribes by intermediaries, i.e., joint venture partners or agents,
distributors or consultants. First, it is Loral's policy to obtain
background information on the intermediary to assess the potential for
violation. Second, it is Loral's policy to enter into a written agreement
with respect to intended disposition of fees and compliance with the FCPA.
ALL SUCH AGREEMENTS MUST BE APPROVED BY THE LEGAL DEPARTMENT PRIOR TO
EXECUTION.
Additional and more detailed information, guidelines and policies are
available from each division's legal office, and associates are expected
to comply with their division's requirements and guidelines. BECAUSE THE
STATUS OF CERTAIN TYPES OF PAYMENTS MAY BE UNCLEAR, ASSOCIATES MUST REVIEW
WITH THE LEGAL DEPARTMENT OF THEIR DIVISION THE NATURE OF ANY PAYMENTS
THAT RAISE POTENTIAL FCPA CONCERNS.
Any violations of the FCPA must be reported immediately to each division's
legal department or to the corporate legal office. Because the immediate
reporting of violations or potential violations is a critical component of
Loral's efforts to ensure compliance with the FCPA, failure to report such
violations could raise potential questions about an associate's knowledge
of, or complicity in, a prohibited transaction. Violations or potential
violations may be reported without fear of retaliation for making such a
report.
B. EXPORT CONTROL LAWS
The Company complies, and all of its associates are required to comply,
scrupulously with United States export control laws and regulations,
including the Arms Export Control Act and International Traffic in Arms
Regulations; the Export Administration Act and Export Administration
Regulations; embargo and trade sanctions laws and regulations;
Anti-Boycott laws and regulations and Executive Orders pertaining to U.S.
export control laws and regulations.
The Company and all of its associates are required to comply scrupulously
with the conditions, limitations, provisos, requirements and terms of all
licenses and other United States government authorizations (including,
without limitation, export licenses, technical assistance agreements and
manufacturing licensing agreements) in connection with any export, import,
re-export, transfer, sale, marketing activity or proposal by the Company.
Failure to comply with United States export control laws and regulations,
or any licenses or other United States government authorizations, can
result in severe penalties for the Company and the individuals involved.
Any associate who violates export control requirements would be subject to
disciplinary action, including termination of employment, and may be
subject to civil and/or criminal penalties imposed by the United States
government.
Many of the Company's products (hardware, software and technical data) and
activities (including certain marketing activities and proposals) are
defined as "defense articles"
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and "defense services" under the Arms Export Control Act and the
International Traffic in Arms Regulations (ITAR).
Associates should be aware that an export occurs under the ITAR by sending
or taking a defense article out of the United States in any manner (except
by mere travel outside of the United States by a person whose personal
knowledge includes technical data); disclosing (including oral or visual
disclosure) or transferring technical data to a foreign person, whether in
the United States or abroad; performing a defense service on behalf of, or
for the benefit of, a foreign person, whether in the United States or
abroad; disclosing (including oral or visual disclosure) or transferring
in the United States any defense article to an embassy, or any agency or
subdivision of a foreign government (e.g., diplomatic missions); or
transferring registration, control or ownership to a foreign person of any
aircraft, vessel or satellite covered by the U.S. Munitions List, whether
in the United States or abroad. Lawful permanent residents of the United
States and certain protected individuals are not considered "foreign
persons" under the ITAR.
The export of defense articles and defense services requires the prior
written authorization of the United States Department of State, unless a
specific statutory or regulatory exemption applies. In certain instances,
the prior written authorization of the United States Department of State
is required before making a sale or transfer, or a proposal to sell or
transfer defense articles, defense services and technical data to certain
countries, or to any persons acting on behalf of these countries, or that
is intended for use by the armed forces of certain foreign countries.
The export of other Company commodities, software and technology
(including technical data) is governed by the Export Administration
Regulations (EAR), and the export of such products and technology may
require the prior written authorization of the United States Department of
Commerce. Associates should be aware that an export occurs under the EAR
by an actual shipment or transmission of items (commodities, software or
technology) out of the United States, or the release of technology or
software subject to the EAR to a foreign national in the United States.
Permanent resident aliens of the United States and certain protected
persons are not considered "foreign persons" under the EAR.
To ensure full compliance with United States export control laws and
regulations, all associates should be aware of the following:
- Associates are responsible for complying scrupulously with United States
export control laws and regulations, including all applicable export
licenses and other export authorizations issued by the United States
government.
- Associates are responsible for seeking guidance and/or direction from
the Company's Export Control personnel regarding export control issues
before engaging in any exports.
- Associates should be especially aware of the potential for exports in
any dealings with foreign persons, such as going on foreign travel,
hosting foreign visitors, having
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technical interactions with foreign persons or engaging in marketing
activities that address technical issues.
Associates shall report any suspected violations of export laws and
regulations, or export authorizations issued by the United States
government, as follows:
CORPORATE OFFICE
Contact: Avi Katz
Vice President and General Counsel
Telephone #: (212) 338-5340
Janet T. Yeung
Vice President and Deputy General Counsel
Telephone #: (212) 338-5429
LORAL SKYNET
Contact: Jeff Stine
Vice President and General Counsel
Telephone #: (908) 470-2521
Wanda Gilmore
Director, Export Compliance and International Trade
Telephone #: (908) 470-2310
SPACE SYSTEMS/LORAL
Contact: Julie B. Bannerman
Vice President and General Counsel
Telephone #: (650) 852-5474
Paul Munninghoff
Executive Director, Export Control and Administration
Telephone #: (650) 852-6702
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