|Corporate Governance - Code of Conduct|
Business Ethics and Confidential Policy
Our Values: Honesty, Fairness, Respect and Integrity
QLogic Corporation (“QLogic” or the “Company”) is committed to conducting its business in an ethical manner and in full compliance with all applicable laws. Honesty, fairness, respect and integrity are all guiding principles in our business dealings. Our ability to achieve the challenging business goals we set for ourselves depends on each and every one of us being committed to these values. These values apply wherever we do business around the world, in conjunction with local laws and regulations.
This Policy Applies to Everyone Everywhere
This Business Ethics Policy applies to all employees, officers and directors of the Company, of any subsidiary of the Company and of any joint ventures or partnerships in which the Company has a majority ownership interest. This policy applies as well to all of the Company’s business operations outside of the United States. We expect all of our employees to comply with this policy.
What do I do if I have a question or concern?
If you encounter a situation or are considering a course of action and its appropriateness is unclear, ask yourself the following questions: Is this the right thing to do? Am I being truthful and honest? Does it comply with QLogic’s policies? Would I feel comfortable if my proposed activities were reported in the news? If the answer to any of these questions is no, then discuss the matter promptly with your supervisor or the Compliance Officer. The Compliance Officer for the Company is the General Counsel of the Company, and in his absence the Chief Financial Officer.
If you are aware of a possible violation of the policies set forth below by others, you should immediately report it. You can choose to report the matter to your supervisor, to the Compliance Officer or to the QLogic Ethics Reporting System.
Supervisors must promptly report any complaints or observations of violations of this policy to the Compliance Officer. The Compliance Officer will investigate all reported possible violations of this policy with the highest degree of confidentiality possible.
If it is determined that an employee has violated this policy, the Company will take appropriate disciplinary action, which may include termination of employment.
You can access the QLogic Ethics Reporting System by calling the toll free number provided or by filing a report on the web. Instructions for accessing the reporting website and the toll free number are on the QLogic home page under “Legal.” Reports to the QLogic Ethics Reporting System can be made anonymously, and we encourage you to use the QLogic Ethics Reporting System for any reports involving accounting or financial reporting fraud or irregularities. Reports to the QLogic Ethics Reporting System involving accounting or financial reporting issues will be referred to, and reviewed by, the Audit Committee of the Board of Directors. QLogic will not tolerate retaliation against any employee for cooperating in an investigation or for making a good faith complaint to any supervisor or the Compliance Officer about violations or potential violations of this policy.
Protecting Confidential Information
What Does It Mean?
- All information related to the Company’s business should be considered confidential unless it has been released to the public
- Employees must take steps to protect not only the Company’s, confidential information but that of customers and suppliers as well
- The obligation to protect confidential information continues even after an individual is no longer an employee of the Company
Maintaining the confidentiality of information regarding the Company’s products, operations, activities and plans is a very important responsibility of every employee. This policy sets forth the affirmative obligation of each employee to protect the Company’s confidential information and the confidential information of our customers and suppliers that is provided to us in the regular course of business.
As a general rule, all information related to the Company’s business should be considered confidential and marked as such unless it has been released in public documents. Examples of confidential information include:
- Financial information such as results of operations, profit margins or budgets
- Strategic business and operating plans
- Sales and marketing information, including pricing information, market shares, customer lists, contacts, sales techniques, plans and surveys
- Operations information, including vendors and suppliers, production methods and production requirements and specifications
- Personnel data, including employee lists, compensation information, organizational charts and employees internal contact information
- Terms of agreements, including pricing with customers, suppliers and other companies
- Product requirements, specifications, designs, materials, components and test results
- Electronic files such as source code, object code, tapes, disks and any other on-line documentation
- Design data, software and firmware documents or source code
- Patent applications and invention disclosures
- Research and development activities, methods, procedures, plans and strategies
Each employee should take steps to ensure that confidential information is protected. This applies to the Company’s confidential information, as well as to the confidential information of our customers and suppliers. Typical steps that every employee should take to protect confidential information are:
- Properly label confidential documents as “confidential”
- Obtain a signed NDA approved by our legal department prior to disclosure of confidential information outside the Company
- Do not discuss confidential information, such as future product plans or customers, when interviewing prospective employees
- Safeguard confidential information, including notebooks, computer disks and laptop computers
- Do not discuss confidential information in public areas, such as hallways, restaurants, airports or internet chat rooms
An employee’s obligation to protect confidential information from disclosure continues even after the individual is no longer an employee of the Company. For example, a former employee may not share confidential information with a new employer. Upon an employee’s resignation or termination from the Company, all confidential information should be returned to the Company, including without limitation confidential information saved in electronic format.
The confidentiality obligations outlined in this policy are in addition to the confidentiality obligations set forth in any written confidentiality agreement between an employee and the Company.
Avoid or Disclose Conflicts of Interest
What Does It Mean?
- Always act in the best interests of the Company
- Avoid any relationship that causes a conflict of interest with employees’ duties and responsibilities to the Company
- Disclose any situations that may involve inappropriate or improper conflicts of interests
Employees are expected to make or participate in business decisions and take actions in the course of their employment with QLogic based on the best interests of the Company as a whole, and not based on personal relationships or benefits. Conflicts of interest can compromise employees’ business ethics. Employees are expected to apply sound judgment to avoid conflicts of interest that could negatively affect QLogic or its business. A “conflict of interest” occurs when an individual’s personal interest may interfere in any way with the performance of his or her duties or the best interests of QLogic.
Employees should avoid any relationship that causes a conflict of interest with their duties and responsibilities to QLogic. Employees are expected to disclose to the Company any situations that may involve inappropriate or improper conflicts of interests affecting them personally or affecting other employees or those with whom we do business. Waivers of conflicts of interest involving executive officers of the Company require the approval of the Audit Committee of the Board of Directors.
Members of QLogic’s Board of Directors have a special responsibility because our Directors are prominent individuals with other substantial responsibilities. To avoid conflicts of interest, Directors may be expected to disclose to their fellow Directors any personal interest they may have in a transaction upon which the Board makes a decision and to excuse themselves from participation in any decision in which there is a conflict between their personal interests and the interest of the Company.
It is not possible to list all possible conflicts of interest. Set forth below are some examples of situations which may involve conflicts of interest:
- Outside employment, or consulting, activity that might impair your ability to fulfill your obligations to QLogic
- Employment by, or consulting for, or service on the board of directors of a competitor, customer, supplier or service provider
- Owning a significant financial interest in any business that does business with QLogic, seeks to do business with QLogic or competes with QLogic
- Taking personal advantage of corporate opportunities
- Soliciting or accepting gifts, favors, loans or preferential treatment from any person or entity that does business or seeks to do business with QLogic (see Gifts and Entertainment below)
- Conducting our business transactions with a family member or a person who shares your household or a business in which you have a significant financial interest
- Exercising supervisory or other authority on behalf of QLogic over a co-worker who is also a family member
Employees are urged to discuss any situation involving a conflict of interest or a potential conflict of interest with their supervisor, Human Resources or the Compliance Officer.
Be Mindful When Giving or Receiving Gifts
What Does It Mean?
- Business entertainment and gifts are meant to create sound working relationships, and not to gain improper advantage with customers or suppliers
- Entertainment and gifts must be consistent with customary business practice and:
- not excessive in value,
- not in cash or cash equivalents,
- not susceptible of being construed as a bribe or kickback, and
- not in violation of any laws
- Employees cannot justify otherwise improper entertainment or gifts by suggesting they are “a way of doing business” in a particular locality
Business entertainment and gifts are meant to create goodwill and sound working relationships and not to gain improper advantage with customers or suppliers or facilitate approvals from government officials. Unless express permission is received from a supervisor, the Compliance Officer or the Chief Financial Officer, entertainment and gifts cannot be offered, provided or accepted by any employee unless consistent with customary business practices and (i) not excessive in value, (ii) not in cash or cash equivalents, (iii) not susceptible of being construed as a bribe or kickback, and (iv) not in violation of any laws. This policy does not prohibit reasonable customer or prospect entertainment and applies to our transactions everywhere in the world. Many of our customers and suppliers also have their own policies that limit gifts and entertainment and it is your responsibility to comply with those policies when engaging individuals employed by those customers or suppliers. You cannot justify otherwise improper entertainment or gifts by saying that such entertainment or gifts are “a way of doing business” in the particular locality. If you have any questions regarding the appropriateness of entertainment or a gift you should discuss the matter with your supervisor or the Compliance Officer.
Books and Records Must Be Valid, Accurate, Complete and Compliant
What Does It Mean?
- The integrity of our financial results depends on the validity, accuracy and completeness of the information supporting entries into our accounting records
- The recording of information in the Company’s books must comply with Company policies, relevant laws, accounting standards and the highest ethical practices
The integrity of our books and records and public disclosure of our financial results depends on the validity, accuracy and completeness of the information supporting entries into our accounting records. The recording of information in the Company’s books must comply with Company policies, relevant laws, accounting standards and the highest ethical practices. Adherence to these standards is essential to the Company’s success. Our records serve as the basis for managing our business and are important in meeting our obligations to stockholders, customers, suppliers, creditors, employees and others with whom we do business. As a result, it is important that our books, records and accounts accurately and fairly reflect, in reasonable detail, our assets, liabilities, revenues, costs and expenses, as well as all transactions and changes in assets and liabilities. General guidelines for achieving these objectives are as follows:
- Records must be properly prepared, including without limitation all expense reports, time sheets, product test information, legal contracts and personnel files
- Misleading entries or intentional omissions to Company documentation are absolutely prohibited. Each employee has a responsibility to ensure that any information that is recorded is accurate and complete
- Terms of sales and other commercial transactions must be accurately and completely reflected in the documentation for the transaction
- Employees involved in preparing reports that we file with the U.S. Securities and Exchange Commission (the “SEC”) should strive to ensure that our financial disclosure is accurate and transparent
- All quarterly, annual and other financial reports to be filed with the SEC must be consistently prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States. All statutory filings in non-U.S. locations must comply with the accounting requirements of those countries.
Complaints or concerns regarding accounting, internal accounting controls or auditing matters should be reported to the Compliance Officer or, if you prefer to report information anonymously, directly to the QLogic Ethics Reporting System. All such complaints or concerns will be referred to the Audit Committee of the Board of Directors.
Laws, Regulations and Government Activities: Compliance is Mandatory
The Company is subject to laws and regulations both in the United States and outside of the United States. Violation of governing laws and regulations is both unethical and subjects the Company to significant risks in the form of fines and penalties and damages the Company’s business reputation. It is expected that each employee will comply with applicable laws, regulations and corporate policies. Specific areas with which employees are expected to comply include:
- Anti-Bribery Laws
- Political Contributions
- Export, Re-export and Transfer Policy
- Customs Compliance
What Does It Mean?
- Bribery is illegal under multiple Anti-Bribery Laws
- All employees, whether located in the United States or outside of the United States, are responsible for Anti-Bribery Law compliance.
QLogic requires compliance with all Anti-Bribery Laws (including, among others, the U.S. Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act) by all of its employees, consultants and agents. The FCPA is a United States law that makes illegal any corrupt offer, payment, promise to pay or authorization to pay any money, gift or anything of value to any foreign official, or any foreign political party, candidate or official for the purpose of:
- Influencing any act, or failure to act, in an official capacity of that foreign official or party; and
- Inducing the foreign official or party to use influence to affect a decision of a foreign government or agency, in order to obtain or retain business for anyone, or direct business to anyone.
Payments, offers, promises or authorizations to pay any other person, U.S. or non–U.S. , are likewise prohibited if any portion of that money or gift will be offered, given or promised to a foreign official or foreign political party or candidate for any of the illegal purposes outlined above. In some circumstances, reimbursement of travel and lodging expenses of a foreign government official may violate the FCPA. The U.K. Bribery Act contains similar restrictions on bribes of foreign government officials and also prohibits the bribery of non-governmental officials at companies.
All employees, whether located in the United States or outside of the United States, are responsible for Anti-Bribery Law compliance. All managers and supervisors are expected to monitor continued compliance with Anti-Bribery Laws. Any action in violation of Anti-Bribery Laws is prohibited. Any employee who becomes aware of apparent Anti-Bribery Law violations should notify the Compliance Officer immediately. If you have questions about the Anti-Bribery Laws of any jurisdiction in which you conduct business activities, please contact the Compliance Officer.
What Does It Mean?
- Political contributions of QLogic assets, including work time, is not allowed without the permission of the Compliance Officer
Employees may not contribute QLogic assets to any political candidate, political action committee (“PAC”), political party or ballot measure without the permission of the Compliance Officer. For these purposes, QLogic assets include employee work time, use of QLogic facilities or equipment or direct monetary payments. Of course, QLogic employees may participate in political activities of their own choice on an individual basis, with their own time and money.
What Does It Mean?
Export, Re-Export and Transfer Policy
- Employees must obtain written authorization from QLogic’s trade compliance department before providing technology to nationals or territories of countries that have not ratified global weapon non-proliferation treaties
- Non-disclosure agreements do not constitute written authorization to transfer design, development or production technology
Export of design, development and production technology may be subject to national security, foreign policy and anti-terrorism laws and regulations. Employees must obtain written authorization from QLogic’s trade compliance department before providing design, development or production technology to nationals or territories of countries that have not ratified global weapon non-proliferation treaties. Non-disclosure agreements do not constitute written authorization to transfer design, development or production technology. Under no circumstances shall employees or agents engage in marketing, service or sales of products or technology to embargoed or sanctioned territories, without written authorization from the Compliance Officer. The list of embargoed countries and territories changes periodically but current information can be found on the Legal Department website under Trade Compliance.
What Does It Mean?
- Comply with custom laws, regulations and policies in all countries where we do business
QLogic’s policy is to comply with custom laws, regulations and policies in all countries where we do business. Accurate customs information on shipping documents is required for all international shipments.
What Does It Mean?
- Employees should ensure that they are not causing the Company to engage in anticompetitive behavior
- Pricing, production and inventory information should never be exchanged with competitors, regardless of how innocent or casual the exchange may be
Antitrust laws are designed to protect the competitive process. These laws generally prohibit:
- agreements, formal or informal, with competitors that harm competition or customers, including price fixing and allocations of customers, territories or contracts;
- agreements, formal or informal, that establish or fix the price at which a customer may resell a product; and
- the acquisition or maintenance of a monopoly or attempted monopoly through anticompetitive conduct.
Certain kinds of information, such as pricing, production and inventory, should not be exchanged with competitors, regardless of how innocent or casual the exchange may be and regardless of the setting, whether business or social.
Understanding the requirements of antitrust and unfair competition laws of the various jurisdictions where we do business can be difficult, and you are urged to
seek assistance from your supervisor or the Compliance Officer whenever you have a question relating to these laws.
What Does It Mean?
- Employees must comply with the Company’s guidelines for the collection, use and disclosure of personal data
QLogic has established guidelines for the collection, use and disclosure of personal data. All QLogic operations, activities and functions that collect, use, receive or distribute personal data must adhere to this policy. All electronic and physical resources, whether owned or leased by QLogic, and the messages, files, data, software or other information stored on or transmitted on these resources are, and remain at all times, the property of QLogic, and QLogic reserves the right to inspect these items at any time.
Media and Public Relations: Disclosure via Specific Limited Channels
What Does It Mean?
- All inquiries or calls from the press, industry analysts, and bloggers should be referred to the Corporate Communication Group
- All inquiries or calls from financial analysts should be referred to the Chief Financial Officer.
- Employees should not comment on the Company’s performance, financial results, or plans on social media (e.g., Facebook)
As a public company, QLogic is required to comply with the federal securities law referred to as Regulation FD (which stands for “Fair Disclosure”). Regulation FD provides that, when we disclose material, non-public information about the Company to securities market professionals or any other stockholder we must also disclose the information to the public. “Securities market professionals” generally include analysts, institutional investors and other investment advisors.
It is our policy to disclose material information concerning QLogic to the public only through specific limited channels to avoid inappropriate publicity and to ensure that all those with an interest in QLogic will have equal access to information. Only designated employees are permitted to discuss Company business with the press or financial analysts. All inquiries or calls from the press, industry analysts, and bloggers should be referred to the Corporate Communication Group, and all inquiries or calls from financial analysts should be referred to the Chief Financial Officer.
With the advent of social media such as Blogs, Twitter and Facebook you need to be careful not to disclose confidential QLogic information. Employees should not comment on the Company’s performance, financial results, or plans on social media. When you choose to go public with your opinions, you are legally responsible for your commentary.
Any waiver of this Business Ethics Policy for executive officers or directors of the Company must be authorized by the Audit Committee of the Board of Directors, and such waiver will be disclosed to stockholders as required by applicable laws, rules and regulations.