CODE OF BUSINESS CONDUCT AND ETHICS Yokogawa Corporation...

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CODE OF BUSINESS CONDUCT AND ETHICS

Yokogawa Corporation of America

CODE OF BUSINESS CONDUCT AND ETHICS Yokogawa Corporation of America

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MESSAGE FROM THE PRESIDENT AND CEO ...........................................................................................4

YOKOGAWA PLEDGE - PHILOSOPHY - CORE VALUES – VALUE (VISION) STATEMENT .............................5

OVERVIEW............................................................................................................................. ...............6

Yokogawa Group Compliance Guidelines

Yokogawa Corporation of America Code of Business Conduct and Ethics

Employee Awareness

SCOPE............................................................................................................................. ......................6

WHAT ARE THE CONSEQUENCES FOR FAILING TO ACT ETHICALLY?.………………………………………….….………..7

MAKING GOOD DECISIONS…………………………………………………………………………………………………....….…….…7

STANDARDS OF BUSINESS CONDUCT

BASIC PRINCIPLES………………………………………………………………………………………………………………….…….………8

We conduct ourselves in conformance to laws, regulations and ethics

We appreciate diversity

We respect basic human rights

CUSTOMER RELATIONS.........................................................................................................................9

Providing safe, high-quality goods and services that are beneficial to society*

Accurately providing essential information

Handling complaints and other problems

Policy on entertaining customers and the giving and receiving of gifts*

SUPPLIER AND VENDOR RELATIONS……………………………………………………………………………….……….…………10

Prohibition of unfair trading practices

Selection of suppliers

Policy on entertaining suppliers and the giving and receiving of gifts*

SALES REPRESENTATIVE AND DISTRIBUTOR RELATIONS………………………………………………….…………….……11

Dealing fairly with sales representatives, distributors, and other sales outlets

COMPETITOR RELATIONS……………………………………………………………………………………………………………….….11

Free and fair market competition

False descriptions and comparative advertising

SHAREHOLDER RELATIONS……………………….…………………………………………………………………………………….…12

Accurate accounting records and timely reports

Prohibition on the provision of incentives

Prohibition of insider trading

TABLE OF CONTENTS

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COMMUNITY AND SOCIETY RELATIONS….………………………………………………………………………………………...13

Preservation of the environment*

Promotion of contributions to society

Dealing with anti-social forces that pose a threat to safety and order

POLITICAL AND GOVERNMENT AGENCY RELATIONS……………………………………………………………………..……14

Conducting business with national/local governments and public agencies

Policy on entertaining public servants and the giving and receiving of gifts

Regulation of political contributions

EMPLOYEE RELATIONS…………………………………………………………………………………………………………….………..14

Equal Opportunity*

Ensuring health and safety*

Prohibition of harassment*

INTELLECTUAL PROPERTY………………………………………………………………………………………………….………………15

Respect for our intellectual property rights

Respect for the intellectual property rights of others

Proper, legal acquisition of information

Confidentiality*

Strict information security

INTERNATIONAL TRANSATIONS………………………………………………………………………………………………….……..17

Security export control

Avoidance of dumping and transfer pricing

PRUDENT CONDUCT AS A YOKOGAWA GROUP EMPLOYEE………………………………………………………………...17

Proper use and maintenance of Group property*

Avoidance of conflicts of interest*

Prohibition of illegal drugs*

Maintaining dignity/improving brand credibility

Dealing with the media*

SUPPLEMENTS

ANNEX A – AD-10-0003 - Contacts and Rules for Compliance Reporting and Consultation…………………..20

ANNEX B – AD-10-0004 - Anti-Bribery Guidelines…………………………………….............................................21

REFERENCES………………………………………………………………………………………………………………………………………22

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Yokogawa Corporation of America (YCA), together with its subsidiaries, are proud members of Yokogawa Electric Corporation of Tokyo, Japan. Along with our sister Yokogawa Companies around the globe, we strive daily at YCA to comply and follow the Yokogawa Group Compliance Guidelines which our parent organization has promulgated for the purpose of instilling throughout the Yokogawa Group a profound commitment to legal and ethical business practices. YCA is committed to adhering to the standards set forth in the Yokogawa Group Compliance Guidelines and to this end, I am pleased to present YCA’s Code of Business Conduct and Ethics (hereinafter referred to as our “Code of Conduct”). This Code of Conduct reflects the values and ethical business practices expected of each and every one of us. Here at YCA, our success is based upon hard work and an unwavering commitment to our core values, values like mutual respect and integrity. This Code of Conduct reflects our dedication not only to a workplace that preserves the dignity and integrity of each individual, but also a workplace which strives to maintain the highest of ethical standards and compliance with the laws and regulations which govern our organization’s business activities. Our customers, business partners, shareholders, as well as society at large will benefit by us following the accepted standards of business behavior outlined herein, through which we will meet their expectations and gain their trust. I urge you to carefully review our Code of Conduct and familiarize yourself with its contents. Failure to do so can have serious impacts on our employees, our customers and even endanger the continued existence of what is now a 100-year-old company. I thank you for choosing to conduct yourselves accordingly and for sharing in our commitment to an ethical and compliant workplace. Ask for guidance if you are ever unsure on how to proceed [Please refer to AD-10-0003 - Contacts and Rules for Compliance Reporting and Consultation attached hereto as ANNEX A].

Daniel Lee Duncan President and CEO

MESSAGE FROM THE PRESIDENT and CEO

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The Yokogawa Pledge As members of the Yokogawa Group, Yokogawa Corporation of America together with its subsidiaries fully comprehend the Standards of Business Conduct and observe them with integrity, both at work and while away.

The Yokogawa Philosophy As a group, our goal is to contribute to society through broad-ranging activities in the areas of measurement, control and information. Individually, we aim to combine good citizenship with the courage to innovate.

Yokogawa Group Core Values Create Value

We create value together with customers providing superior performance and developing customer loyalty.

Collaboration

We collaborate with our stakeholders to achieve mutual objectives.

Respect for Individuals

We respect and trust each individual.

Integrity

Our business practices are fair and open.

Recognition/Gratitude

We show appreciation and recognize effort.

Yokogawa Value (Vision) Statement The most trusted automation solutions partner for operational excellence and a sustainable future.

YOKOGAWA PLEDGE - PHILOSOPHY - CORE VALUES – VALUE (VISION) STATEMENT

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Yokogawa Group Compliance Guidelines The Yokogawa Group Compliance Guidelines outline and expand upon the Standards of Business Conduct that are expected of every Yokogawa Group employee.

Yokogawa Corporation of America Code of Business Conduct and Ethics To put to practical use and foster a deeper understanding of the Yokogawa Group Compliance Guidelines, YCA has organized and distilled the guidelines into this Code of Conduct. It is an essential component of our Corporate Compliance Program. It is promoted for the purpose of communicating and assuring our employees we are dedicated to conducting business with honesty and integrity. This Code of Conduct is intended to be a high-level summary that is easily understandable. Several subject matters involve more complex business practices and operations, which require more detailed policies and procedures, some of which are referenced herein. To view our complete set of policies and procedures, go to: Yokogawa Group policies and procedures: http://gappli01.jp.ykgw.net/GMS/index_e.htm YCA policies and procedures: http://mynet/kb/Pages/Policies-and-Procedures.aspx

Employee Awareness To ensure employee awareness, a copy of this Code of Conduct is issued to each employee upon hiring. Each employee is required to sign an acknowledgement that he/she has received and read this Code of Conduct.

Revisions are communicated to all employees via e-mail and published on the intranet.

This Code of Conduct applies to all employees of YCA and its subsidiaries. We also seek to work with third parties who operate under similar principles. YCA and its subsidiaries expect all parties with whom we contract to act in a manner that is consistent with this Code of Conduct. In short, we are all responsible for doing the right thing, particularly those who enjoy and have been entrusted with a management or leadership role: Employees in Leadership Roles Have Additional Responsibilities: Acting as role models, demonstrating ethical behavior in the performance of their own duties. Making sure employees understand that business results are never more important than compliance. Ensuring that employees are familiar with the standards for ethical behavior in the Code of Conduct and

Company Policies that are relevant to the performance of their duties. Encouraging open communication regarding business practices and ethical issues. Acting to address incidents of unethical behavior, including training, counseling and disciplinary action

where appropriate, and recognizing and rewarding ethical behavior.

OVERVIEW

SCOPE

http://gappli01.jp.ykgw.net/GMS/index_e.htm

http://mynet/kb/Pages/Policies-and-Procedures.aspx

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Failures to act ethically – violations of this Code of Conduct, company policies and/or the law can have serious consequences on our business and reputation. Should an employee become aware of conduct that violates or may violate this Code of Conduct, company policies and/or the law, it is imperative to speak up. He or she is encouraged to report the matter immediately to his or her manager so that action can be taken to correct the problem and prevent future occurrences. Depending on the circumstances, the corrective and preventive steps might include training, counseling and disciplinary actions up to and including termination of employment and civil or criminal prosecution [Please refer to AD-10-0003 - Contacts and Rules for Compliance Reporting and Consultation attached hereto as ANNEX A]. You can also contact EthicsPoint on a totally confidential and anonymous basis if you choose. EthicsPoint is a confidential internet and telephone based reporting tool that helps Yokogawa and its employees work together to address violations of this Code of Conduct in an effort to maintain a positive work environment.

Online: www.BusinessEthicsLine.ethicspoint.com Phone: US: 1-877-516-3409 Canada: 1-855-230-8376 Mexico: 001-855-411-2668 Confidential * Easy-to-Use * Toll-free * 24 hours a day * 7 days a week

If you are unable to make a judgment regarding a matter not described in this Code of Conduct, or if you are uncertain about how to ensure compliance, try asking yourself the following questions: Is what you are about to do In violation of the law? A deviation from what society considers common sense? Something that you can carry out with pride? Detrimental to the image of Yokogawa?

If after asking yourself these questions you are still uncertain whether there is a compliance problem please refer to AD-10-0003 - Contacts and Rules for Compliance Reporting and Consultation attached hereto as ANNEX A.

MAKING GOOD DECISIONS

WHAT ARE THE CONSEQUENCES FOR FAILING TO ACT ETHICALLY?

http://www.businessethicsline.ethicspoint.com/

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BASIC PRINCIPLES

We conduct ourselves in conformance to laws, regulations and ethics We observe laws and regulations and pursue our business activities with fairness and in good faith.

We appreciate diversity We learn from and respect the cultures in which we work. Conduct that may be professionally or socially acceptable according to the customs and culture of one region may be received differently in another region. We fully recognize this and perform our duties with careful consideration for regional and cultural differences. We also value the uniqueness of individuals and the varied perspectives and talents they provide. We promote diversity within our workplace and have an inclusive environment that helps create the diverse and dynamic teams that drive our success.

We respect basic human rights We respect the basic human rights and personal dignity of every person with whom we are involved.

STANDARDS OF BUSINESS CONDUCT

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CUSTOMER RELATIONS

Providing safe, high-quality goods and services that are beneficial to society

Satisfying our customers is of primary concern; we strive to understand their needs and to develop and offer products and services that provide a solution. The safety of our customers using products and services offered by the Yokogawa Group is of top priority. Our aim is for those products and services to be superior in quality and environmentally friendly.

The first step in raising customer satisfaction is to consider products and services from their point of view. In order to be able to propose solutions to customers, we need to accurately grasp the changes in their needs as they become more diverse, complex, and advanced; to have a deep understanding of their business; and to work hard to provide the products and services that will meet their needs. We must work to make safety our number one concern. Should a defective product cause damage, our responsibility as a corporation would be severely put to the test under the Product Liability Law, and could well lead to loss of credibility.

Accurately providing essential information So as to allow our customers to make a rational choice of products and services, we observe all relevant laws and regulations and provide accurate information regarding our products and services, including the country of origin, product materials, specifications, and performance. In order that our products and services can be used safely we indicate clearly and simply the method of operation and any risks, and make sure that a full and proper explanation is given. Under the Product Liability Law, an inadequate indication of a necessary caution or warning regarding the safety of a product is in itself deemed to be a product defect.

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Handling complaints and other problems

We take care to respond promptly and in good faith to inquiries and requests from our customers.

In the event of an accident or other problem arising from a product or service provided by us, we carry out a prompt verification of the facts and take appropriate measures. Preventing any escalation of the problem by responding immediately after the occurrence of an accident or other problem is particularly important. A report of the accident or problem must be made immediately.

Policy on entertaining customers and the giving and receiving of gifts We do not engage with our customers in any giving or receiving of entertainment, gifts, or cash that is in

deviation from sound business practices or socially-accepted norm(s).

The entertainment of customers and the giving and receiving of gifts should be kept within the bounds of reason and

common sense, be within the limits of business etiquette. In the event you receive an unsolicited gift from a business

acquaintance or associate, you must report it and have the approval of your supervisor if the Entertainment, Gifts,

Etc. is in excess of Criteria for Reasonable Range in order to avoid coming under suspicion of Bribery. In general,

regardless of the monetary value, receipt of an unsolicited gift(s) will be returned, donated to charity or put

in an office lottery. [Please refer to AD-10-0004 - Anti-Bribery Guidelines attached herewith as ANNEX B].

SUPPLIER AND VENDOR RELATIONS

Prohibition of unfair trading practices We recognize our suppliers as business partners, and engage in fair-trading based on a relationship of trust. We do not discriminate unduly against any supplier or use our position of dominance to force one-sided conditions on the supplier. We maintain a relationship of trust with our partners by engaging in fair trade. Care is taken to issue a proper order form as set out under the Subcontract Law and to ensure that no illegal act takes place, including unreasonably forcing the price down, refusing to accept goods or services, sending goods back, having a job redone, delaying payment, reducing the amount paid, and demanding or procuring an incentive. Other illegal acts that must be avoided are coercion, retaliatory measures, demanding early payment of materials, and the issuing of a non-discountable draft.

Selection of suppliers We select our suppliers fairly on the basis of generally accepted standards. General standards for selection that can be cited as objective factors include price, quality, warranty structure, technical ability, service, manufacturing facilities, and delivery date, as well as the ability to fill the order and operational stability; recently it has also become necessary to give priority to goods that have a low environmental impact.

For Additional Guidance: GM-800 - Yokogawa Group Quality Management Standards GM-806 - Regulation for Reporting Information on Accidents at Customer Sites

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Policy on entertaining suppliers and the giving and receiving of gifts In principle, we decline offers of entertainment and gifts from subcontractors, traders, and other suppliers.

Entertainment, gifts, or cash from suppliers aimed at obtaining undue benefit or some kind of advantageous

transaction must not be accepted. Likewise, members of the purchasing staff must not use his or her position

of dominance to demand entertainment, gifts, or cash from a supplier, or seek any personal advantage.

We recognize there are circumstances where it is appropriate and customary to give and/or receive a

reasonable gift. In the event you receive an unsolicited gift from a business acquaintance or associate, you must

report it and have the approval of your supervisor if the Entertainment, Gifts, Etc. is in excess of Criteria for

Reasonable Range in order to avoid coming under suspicion of Bribery. In general, regardless of the monetary

value, receipt of an unsolicited gift(s) will be returned, donated to charity or put in an office lottery. [Please refer

to AD-10-0004 - Anti-Bribery Guidelines attached herewith as ANNEX B].

SALES REPRESENTATIVE AND DISTRIBUTOR RELATIONS

Dealing fairly with sales representatives, distributors, and other sales outlets We do not engage in unfair trade practices or abuse our position of dominance over our sales representatives, distributors, special agents, or other sales outlets. Following are types of conduct against a sales outlet which constitute unfair trade practices: Control of resale prices (Specification of the resale price, control of the minimum resale price, etc.). Exclusivity clause (Unfair exclusion of the products of competitors as a condition of business). Abuse of a position of dominance (Undue interference in the management of a sales outlet, unilateral imposition

of conditions of trade). Discriminatory treatment (Undue discrimination in conditions of trade depending on the sales outlet).

COMPETITOR RELATIONS Free and fair market competition We observe the laws relating to free and fair competition. We do not take unfair advantage through deceptive pricing practices, misrepresentation of material facts, concealment or abuse of privileged information or any other unfair-dealing practice.

False descriptions and comparative advertising We provide truthful and accurate information about our products and services. False advertising, advertising that uses misleading representation and untruthful comparative advertising that slanders the products or services of another company is prohibited.

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SHAREHOLDER RELATIONS

Accurate accounting records and timely reports We prepare accurate accounts as prescribed by law and other regulations. We report truthfully on our financial condition and business results. All transactions related to corporate accounts must be accurately and completely recorded and reported. There must not be any inappropriate handling of accounts or window dressing.

Prohibition on the provision of incentives We do not provide incentives with respect to the exercise of shareholder rights. That is, we do not request the help of our shareholders or anyone else exercising shareholder rights by offering him or her financial or other benefits in exchange for help in pushing forward a given agenda at a general meeting of the shareholders.

Prohibition of insider trading We do not engage in insider trading. Insider information may become known to a person in the course of his or her work. Insider information is information that is not yet public and could reasonably be expected to affect the price of a company’s securities or be considered important to a reasonable investor. The act of trading securities on the basis of this information is called insider trading, and is illegal. We do not engage in the disclosure of insider information (whether it be in one-on-one or small discussions, meetings, presentations, proposals or otherwise) with respect to any entity (whether it be Yokogawa Corporation of America, a subsidiary, an affiliate or any other company). Following are some examples of insider information: Information relating to the commercialization of a new product or technology. Information relating to a new business enterprise. Business operations, results of operations or financial condition.

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COMMUNITY AND SOCIETY RELATIONS

Preservation of the environment We consider preservation of the environment to be one of the most important tasks in our operations. Our aim is for our business activities to fit in harmoniously with the preservation of the environment. We take the environment into consideration in every process, from technical development and product design to supply, production, marketing, transportation, recovery and waste disposal, and work to reduce the load on the environment. In addition to setting specific reduction targets for the company and striving for technical innovations to enable us to reach our targets, we work to raise the awareness of each and every employee so that the individual can take the initiative in the promotion of the use of recycled items, using less paper, reducing power consumption, and so on.

Promotion of contributions to society As a business enterprise we are a member of society. We seek to be a good corporate citizen, exist in harmony with local communities, and serve to the best of our ability the countries and communities in which we have a presence. In addition to contributing to society through our work, we also promote a wide range of activities that contribute to society and we support the participation of employees in activities that make such a contribution.

Dealing with anti-social forces that pose a threat to safety and order With regard to anti-social forces (i.e. groups or individuals that pursue their economical profit using violence, power and fraudulent methods), our stance is steadfast: we do not fear them, we do not give them money and we do not employ them. We reject anti-social forces.

For Additional Guidance: GM-850 - Principles of Yokogawa Group Environmental Management Standards

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POLITICAL AND GOVERNMENT AGENCY RELATIONS

Conducting business with national/local governments and public agencies We conduct business fairly with the national government, local governments, and public agencies. With politicians and public servants, we do not engage in any conduct that could be construed as bribery.

Policy on entertaining public servants and the giving and receiving of gifts We do not offer gifts, entertainment, or other benefits to the officials or employees of the national government, local governments, or public agencies. Offering or receiving gifts or entertainment to or from public servants in

connection with our business would lay us open to suspicions of an unfair relationship. [Please refer to AD-10-0004 - Anti-Bribery Guidelines attached herewith as ANNEX B].

Regulation of political contributions We do not make contributions to individual politicians. We also do not make contributions to political

organizations or political parties that fall outside the scope permitted by law [Please refer to AD-10-0004 - Anti-Bribery Guidelines attached herewith as ANNEX B].

EMPLOYEE RELATIONS

Equal Opportunity We prohibit discrimination in employment practices. We are an equal opportunity employer. Discrimination in the workplace based on race, gender, religion, social status, age or any other category protected by federal, state or local law is prohibited.

Ensuring health and safety We maintain a safe and healthy working environment for our employees that is free from hazards and in compliance with applicable federal, state and local laws.

Prohibition of harassment We prohibit violence and are committed to a working environment free of harassment.

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INTELLECTUAL PROPERTY

Respect for our intellectual property rights

We value immensely the Intellectual Property created at YCA. Property that is intangible and unique – inventions and ideas, designs, writings, know-how – is called intellectual property, and the rights (patents, trademark rights, design rights, copyrights) granted by law to protect one’s intellectual property are called intellectual property rights. As a technology company, intellectual property is the lifeblood of YCA. Our Intellectual property not only provides YCA and the Yokogawa Group with a technological and competitive advantage relative to its competitors, it is also one of the most valuable assets of the entire Yokogawa Group. In recognition of the immense value of Intellectual Property to YCA and the Yokogawa Group, we strive to: Promote the creation, protection and proper utilization of Intellectual Property; Take appropriate measures to prevent infringement of our Intellectual Property Rights, such as issuing a

request for an injunction; Work to maintain the integrity of our Intellectual Property Rights; Maximize the human and financial capital invested in the development of Yokogawa products, services

and business operations by protecting in strict confidence our Intellectual Property by safeguarding against its unauthorized disclosure;

Provide guidance to our employees and contractors regarding the use and protection of our Intellectual Property as well as the Intellectual Property of third parties; and

Set forth procedures which encompass the following: o the licensing of our Intellectual Property to third parties, both customers and commercial partners; o the enforcement of our Intellectual Property Rights; and

Respect for the intellectual property rights of others Just as we would with our own intellectual property, so too must the intellectual property rights of others be respected, and care taken to ensure that those rights are not infringed. For example, should we use without permission a technology patented by another company, even unknowingly, it is an infringement of rights and we may be served with an injunction to cease use of the technology, or even be called upon to pay huge reparations. In the development of a product, it is important to carry out a full investigation in advance and either alter the design to avoid the use of anything that touches on the rights of others, or where necessary take the proper steps such as obtaining a license for use.

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Proper, legal acquisition of information In addition to information that is protected as a right granted by law (patents, trademark rights, design rights, copyrights), other information such as competitors’ bids, customer data and know-how is very important in terms of competition with other companies. Particular caution is needed in the handling of information that has not been made public. Information that is not publicly known, is treated as confidential information.

Confidential business information which provides an enterprise a competitive edge is considered a “trade secret” and is protected under the Prevention of Unfair Competition Law.

This kind of information must never be acquired by unlawful means, such as illegal access to a computer or by bribing an employee of another company. To protect information, a confidentiality agreement must be concluded and adhered to rigorously by all those concerned.

Confidentiality Confidential information must be kept confidential and shared only with other employees who have a legitimate “need to know.” Outside parties may have access to such information only if they are under binding confidentiality agreements and have a “need to know.” Confidential information is information of value to the company business that an enterprise keeps private and does not disclose publicly. This includes not only information relating to our own or our competitors’ and customers’ technology, business transactions, operations and financial matters, but also personnel data. Personal information must be handled discreetly, respecting privacy. Without proper consent, employees are not permitted to use, disclose or disseminate information of this kind. Upon retirement, all confidential information must stay with the company; and even after retirement, the employee must not leak any confidential information that became known to him or her during his or her employment.

Strict information security Information security measures such as indication of classification of confidential information, access privilege control and virus checks are an essential part of corporate risk management. In our highly information-oriented society, once a piece of information is leaked there is a risk that it will spread endlessly. When handling information equipment, employees should be well aware of the risks involved and strive to prevent information from being leaked or damaged.

For Additional Guidance:

GM-030 - Confidentiality

Code

For Additional Guidance:

GM-030.01 - Rules for Confidential Information Security Management

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INTERNATIONAL TRANSATIONS

Security export control We observe the laws relating to security export control, and cooperate in the maintenance of world peace and security. When exporting goods or providing technology that may be used as weapons, used in the development of weapons, or converted into weapons, the procedures for license application must be followed and no conduct infringing these procedures should be undertaken. If there is any doubt at all regarding an export transaction – anxiety that goods may be converted into weapons, or that the customer is located in a region or country where there is an ongoing conflict – instruction must be sought from personnel responsible for our export compliance.

Territory Policy We observe and respect the Territory Policy as it is outlined for Yokogawa Group companies and cooperate with other Yokogawa Group companies with respect to Multi-national Projects under the condition of Sales Activity Fee(s) (SAF), the fee(s) paid by one Yokogawa Group company in charge of the sales contract of a Multi-national Project to the other cooperating Yokogawa Group company/companies. Territory Policy Table (from viewpoint of Yokogawa Group company in a given territory) Location of inquiring/ordering customer Final Destination Judgment of quotation/contract Attention

A1 Inside the territory (Note)

Inside the territory Basically free

-

A2 Outside the territory (1)

B1 Outside the territory

Inside the territory Prohibited (Basically) (2)

B2 Outside the territory Prohibited

(1) Notify Company in charge of end user. GM-150 Security Export Control Code MUST be observed.

(2) Introduce Company in charge of the concerned customer and decline inquiry/order. Note: Inquiring/ordering customer inside the territory includes EPC, end user's purchasing organization, trading firm forming a consortium, etc. Excludes Reselling Agent. When receiving inquiry/order from Reselling Agent, simply decline it.

For Additional Guidance: GM-150 - Security Export Control Code

For Additional Guidance: GM-301 - Territory Policy

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Avoidance of dumping and transfer pricing When a product is exported and the price is set unreasonably lower than the home selling price so that the industry of the importing country is harmed, this is called “dumping.” The Antitrust Law prohibits “dumping.” Should a government investigation find that dumping has taken place, the World Trade Organization recognizes the right to impose a dumping tax. Transfer pricing refers to the price of transactions between a business concern and its overseas subsidiaries. The transfer pricing tax code is a system of taxation that levies taxes by recalculating that price according to the price of a similar transaction carried out between two independent third parties (arm’s length price). For example, if it should be considered that the export price from the parent company to its overseas subsidiary is set unreasonably low, an additional tax is levied in the country in which the parent company is located, on the difference between the transfer price and the proper arm’s length price.

PRUDENT CONDUCT AS A GROUP EMPLOYEE

Proper use and maintenance of Group property Engaging in fraud or misappropriation of company assets is strictly prohibited. The assets of a company are comprised of tangible items such as equipment, materials and inventory and intangible items such as brand name and know-how. Company assets are to be used as necessary for legitimate business purposes; they are not to be appropriated for private use. For example, travel or entertainment expenses must not be appropriated for personal use, and a mobile phone or computer provided by the company must not be used to make private calls, send private emails, or access the Internet for private purposes.

Avoidance of conflicts of interest All business decisions and actions must have as their purpose the best interests of the company. A conflict of interest arises when the interests of the company and the interests of the individual are at odds. Employees are prohibited from engaging in conduct that is aimed at aiding the interests of the individual or of a third party and harming the interests of the company, or that may result in the same. Following are some examples of conflict of interest: When an employee or executive of a company undertakes a business transaction which is detrimental to

the interests of the company while being advantageous to the person in question or to an acquaintance or other third party, or to a corporate body run by the person or third party.

When an employee or executive of a company invests in a competitor, or becomes an executive of the competitor.

When an employee or executive of a company has business dealings in a product or service identical or similar to those of the company.

When an employee or executive of a company demands an incentive in return for providing a customer with preferential treatment.

When an employee or executive of a company makes use for personal gain of information or business opportunities accessed in the course of his or her official duties.

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Prohibition of illegal drugs Illegal drugs harm the health of the individual and jeopardizes the safety and discipline of the workplace. Employees must not use illegal drugs under any circumstances. Illegal drugs must not be brought into the workplace.

Maintaining dignity/improving brand credibility We take care to act with good sense and responsibility so as to maintain the dignity of and avoid causing harm to our corporate image and credibility. Each and every employee must be aware that our business activities are supported by the trust of all our stakeholders, and strive to act in a manner that maintains and enhances the credibility of the YOKOGAWA brand.

Dealing with the media All dealings with the media are handled by the department in charge of Public Relations and Investor Relations (PR&IR Department). As a general rule the only section capable of acting for the company in dealing with the media is the PR&IR Department or the marketing communications department of each Group company.

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ANNEX A AD-10-0003 - Contacts and Rules for Compliance Reporting and Consultation

https://mynet2015.us.yokogawa.com/sites/Kb/PoliciesAndProcedure/AD-10-0003.pdf?Web=1

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ANNEX B AD-10-0004 - Anti-Bribery Guidelines

https://mynet2015.us.yokogawa.com/sites/Kb/PoliciesAndProcedure/AD-10-0004.pdf?Web=1

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REFERENCES GM-020 - Standards of Business Conduct for the Yokogawa Group GM-020.02 - YOKOGAWA GROUP COMPLIANCE GUIDELINES

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