Center for the Study of Ethics in the Professions at IIT

Title: ETHICAL BUSINESS CONDUCT

Date: June 1, 1992

Applicable to: Worldwide

I. PURPOSE

This Policy is to confirm the Company's commitment to the highest degree of integrity and honesty in the conduct of its business affairs and to state purchasing policy with regard to certain buying practices related to this subject.

II. POLICY

Following is an excerpt from the Company's Policy on Ethical Business Conduct as stated in Corporate Policy No. 1 (Also reference Corporate Procedure Manual, Corporate Policy No. 1.)

"it is the policy of the Company for all employees to conduct Eaton's business affairs with the highest personal integrity. In every business transaction and negotiation, Eaton employees are expected to respect the rights of competitors, customers, suppliers and other employees. National laws governing price fixing, division of customers and territories and other trade practices must be strictly complied with. Eaton's U.S. Government business is to be conducted in accordance with these principles and the specific laws and regulations applicable to this segment of its business."

All of our purchasing policies and practices flow from our Company's Corporate Policy on Ethical Business Conduct.

Purchasing people are engaged in activities that are continually scrutinized by suppliers, employees and the general public. In recognition of the above, the following standards of conduct have been established:

1. Purchase without prejudice for the overall benefit of the Company.
2. Conduct business in a highly ethical manner; be honest, courteous, and professional in our business affairs.
3. Purchasing requirements should routinely be subjected to competitive evaluation.
4. Conflicts of interest with the business of the Company are to be avoided. (Reference Corporate Statement on Ethical Business Conduct and Purchasing Policy P-25, "Purchases from Eaton Employees".)
5. Maintain confidentiality regarding quotations, price, or other confidential information involving our Company, suppliers and competitor dealings.
6. Settle claims and disputes on the basis of facts and fairness.
7. No gifts of substantial value shall be offered to or accepted from suppliers or customers of the Company. In connection with a Government contract or subcontract, no gifts of any value whatsoever shall be offered to or accepted from suppliers or customers. (Reference Corporate Policy No. 2, "Gratuities in Dealings with Employees of the U.S. Government and U.S. Government Contractors and Subcontractors.").
8. Solicitation of goods, services, invitations, or contributions for strictly personal use is forbidden.
9. Supplier-sponsored trips are generally discouraged (and are prohibited altogether in connection with Government contracts or subcontracts). Where such trips are requested, they require department managers' approval. It is expected that Eaton personnel pay their fair share of expenses. (Reference Purchasing Policy No. P-19, "Entertainment by Suppliers and Business Expenses.")

III. RESPONSIBILITY

It is the responsibility of every Eaton employee to comply with both the letter and spirit of the Corporate Policy on Ethical Business Conduct. Purchasing Managers are also responsible to ensure compliance with this Policy by the division or subsidiary purchasing department personnel.

IV, REFERENCE

1. 1. Corporate Policy No. 1, "Ethical Business Conduct"
   2. Corporate Policy No. 2, "Gratuities in Dealings with Employees of the U.S. Government and U.S. Government Contractors and Subcontractors"
   3. Corporate Statement on Ethical Business Conduct
   4. Purchasing Policy P-19, "Entertainment by Suppliers and Business Expenses"

V, INTERPRETATION
The Director of Purchasing should be contacted for further interpretation or clarification of this Policy.