Alliance One Compliance Help Line

Introduction

Statement of Integrity

Alliance One International, Inc. (“AOI” or the “Company”) was created to meet the challenges of a 21st Century business environment and we are committed to meeting those challenges successfully on all fronts.  Foremost among them is our commitment to conduct our business with complete integrity.

Our worldwide reputation for honest and reliable business conduct, built by so many people over so many years, will be tested and proven in each business transaction we make.  We are more global, dynamic and customer-driven than ever before.  But our quest for competitive excellence and customer satisfaction begins and ends with our commitment to lawful and ethical conduct and as a global company we must create and follow a set of global rules. 

Our Code of Business Conduct (“CBC” or the “Code”) is our guide to ethical and lawful conduct.  It clearly defines the Company’s expectations for legal and ethical behavior on the part of every employee – an obligation that is, in fact, a condition of employment.  AOI directors, officers, employees and agents are expected to conduct the Company’s business according to the highest standards of professional ethics, financial integrity and legality.

All of us have many demands on our time, but the information contained in the CBC will only be effective if you take the time and make the effort to read the materials and apply these standards of conduct in your business activities.  If any aspect of the CBC is unclear to you or if you have questions about a situation you are facing, your concerns can be discussed directly with your supervisor, human resource representative, the Corporate Compliance Officer, or the Director of Corporate Compliance. You may also access Alliance One’s Compliance Helpline from each of our locations worldwide through either the toll-free telephone number or the website.
 
Any notion that compliance training and ethical business behavior do not contribute to our “bottom line” success is wrong.  If AOI, through the performance of its directors, officers, employees and agents around the globe, were to fail to achieve or exceed the standards of conduct outlined in this guide, that failure could jeopardize the Company financially, harm individuals and destroy one of AOI’s most valuable assets – its reputation.  Maintaining this most valuable of corporate assets is a matter of the greatest importance to our continued success and a responsibility we all share.

Our future will undoubtedly bring an even more competitive environment and we must be ready to meet its challenges; but we must be prepared to do so without diminishing the standards of ethical conduct that are the cornerstone for the way we conduct our business.                                  

About Our Policy

At AOI one of our core values is our commitment to integrity.  How we do business and how we treat others will define the Company to the rest of the world.  It is important to our shareholders, to our customers and suppliers, to all our employees worldwide and to the communities where we live and work that AOI be known for the integrity of its people and its high standards of business conduct.

Ethical behavior may mean more than complying with the law -- but it starts with the law.  You have an affirmative obligation to acquire sufficient knowledge of the laws relating to your location and your particular responsibilities and duties in order to recognize conduct or situations that raise legal or ethical questions and when to seek legal advice.  It is management’s obligation to ensure and facilitate adherence to our high standard of ethical conduct by clearly articulating the requirements of the CBC and by supporting its fair application to all personnel.

The purpose of the CBC is to summarize the policy of the Company generally and provide guidance for proper conduct in areas of particular concern.  It explains the Company’s basic expectations concerning your professional and personal behavior. The CBC does not describe every specific conduct that is unacceptable or illegal.  Because a particular course of conduct is not discussed this does not mean the act is acceptable and/or lawful.  The Company expects every director, officer, employee, and agent around the world to make a good faith effort to understand and comply with both the letter and the spirit of AOI policies and applicable laws.

It would be impossible to address every situation that you may encounter.  Ultimately, we must support each other in our commitment to doing business the right way and when we are uncertain about the correct course of action we should seek the advice of colleagues and counsel.  In some cases a situation may be so complex that additional guidance is needed.  The Board of Directors has appointed a Corporate Compliance Officer (“CCO”) and a Director of Corporate Compliance (“DCC”) to provide assistance.  If a situation arises that is not addressed in the CBC, it is each person’s responsibility to immediately contact his/her supervisor, the Alliance One Compliance Helpline (see “Compliance Helpline” in this manual) or the CCO or DCC.

Please keep the CBC in a convenient place so you can refer to it in the future.  Additional copies may be easily accessed from AOI’s website (www.aointl.com) or the AOI Intranet.

Which Law Applies

AOI conducts business in many countries around the world and our employees are citizens of many different countries.  Further, the Company’s primary business involves the movement of products in international trade.  As a result, our operations are subject to the laws of many countries, provinces, states and municipalities. 

Because AOI is incorporated in the United States, the laws of the United States often extend to our operations throughout the world as well as to the business activities of employees wherever they live or work.  Similarly, other countries may also apply their own laws outside of their borders to their own citizens and to corporations that are organized under their laws, such as AOI subsidiaries.

Obviously, the laws of different countries can vary widely, and in some instances a conflict may exist between the applicable laws of two or more countries.  When you encounter such a conflict, it is especially important to consult company legal counsel to understand how to resolve that conflict properly.

Alliance One International and You

After reading the CBC, you may have questions or encounter situations which you think are not adequately covered.  To make inquiries or seek explanations relating to applicable laws or concerns about business practices, you may elect to communicate with your immediate supervisor or directly with the CCO or DCC.  Any employee, officer, director, or agent is authorized and encouraged to communicate directly with the CCO or DCC without any necessity for intermediate inquiries to or permission from supervisory management.

                                                Henry C. Babb
                                                Corporate Compliance Officer
                                                Alliance One International, Inc.
                                                P. O. Box 2009
                                                Morrisville, NC 27560
                                                Telephone:  919-379-4312
                                                Email: hbabb@aointl.com

                                                Nichlas A. Fink
                                                Director of Corporate Compliance
                                                Alliance One International, Inc.
                                                P. O. Box 2009
                                                Morrisville, NC 27560
                                                Telephone:  919-379-2553
                                                Email: nfink@aointl.com

• The Company wants you to know that as long as you are acting in good faith, you may raise any question or voice any concern about any legal or ethical issue without fear that you will be discredited or that you will jeopardize your job.  “Good faith” does not mean that you need to be right – but it does mean that you should be telling the truth as you understand it.  If you feel you are being encouraged or pressured to violate the law, or observe anything you think may be a violation, you should bring it promptly to the Company’s attention.  It is a violation of the CBC for any director, officer, employee, or agent to retaliate against or take other adverse actions against those who report a violation of the CBC in good faith.  Directors, officers, employees, or agents who retaliate against others for reporting a problem will be subject to disciplinary action up to and including dismissal.

Compliance Helpline

Additionally, and if you wish, anonymously, you may communicate questions or concerns by means of the Alliance One Compliance Helpline, a simple way for you, 24 hours a day, seven days a week, to ask questions, raise concerns or clarify issues covered in the Alliance One Code of Business Conduct, including questionable accounting, internal accounting controls, and auditing matters. 

You are encouraged to bring compliance issues to the attention of the Company and you may do so without providing your name.  There are no records or any devices that can identify or trace the number from which you are calling.  When you call the Compliance Helpline, you will be connected with Global Compliance Services in Charlotte, NC, where one of its Communications Specialists will handle your call.

The Communications Specialist will greet you and ask how he or she can be of service.  After you identify the reason for your call, information will be gathered by the Communications Specialist to fully understand the purpose of the call.  You will be given a case number and an agreed-upon call back date.

A report will be prepared by Global Compliance Services and forwarded to the Alliance One Compliance Manager (a company employee).  The Compliance Manager will review the concern, contact you, if necessary, and initiate an appropriate investigation.  In cases where you have chosen anonymity, Global Compliance Services will be notified of the results of the investigation in order to respond to you by the agreed-upon follow-up date. 

You are encouraged to use the Compliance Helpline in voicing your concerns and questions. Alliance One cannot achieve the high standards of business conduct addressed in this Code of Business Conduct without your support and assistance. 

The Compliance Helpline phone number in the United States is 1-800-268-4670.  Dialing instructions for employees calling from outside the United States are posted on all bulletin boards in all Alliance One offices and factories and are available from local compliance managers or human resources representatives. Additionally, the Compliance Helpline can be accessed through the Internet at aoicompliancehelpline.alertline.com

Policies

Working for our Company

Personal Privacy

It is the Company’s policy to vigorously protect the privacy of its employees.  In that regard:

• You are required to comply with all applicable privacy and data protection laws, regulations, and treaties.  For instance, in the United States privacy laws particularly address the protection of individual medical, financial, and consumer information, and information about children.  The European Union Privacy Directive contains strong protection for medical and health information, information revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, or information concerning the sex life of an individual.

• Because the laws relating to privacy protection are detailed and complex, you must consult with Company counsel before establishing or revising any database or other system through which the Company collects, uses, or discloses to any person individual information or information about an individual’s finances, health or medical condition, racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, or sex life, or any other sensitive individual information.

• As a general rule, to the extent the Company does have access to any individual’s personal information, it is Company policy to use that information only for limited, authorized purposes, and not to disclose that information except in accordance with law after consultation with Company counsel.

• You must consult with Company counsel before developing any privacy policy, whether for use in connection with the Internet or otherwise, and maintain adequate procedures to comply with any policy adopted.

Conflicts of Interest

A conflict of interest occurs when an individual’s private interest interferes in any way – or even appears to interfere – with the interests of the Company as a whole.  A conflict situation can arise when a director, officer, employee, or agent takes actions or has interests that may make it difficult to perform his or her job objectively and effectively.  Conflicts of interest also arise when a director, officer, employee, agent or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company.  The following topics relate to specific instances that you may encounter.

Securities Trading

• In the course of conducting the business of AOI, you may come into possession of material information about the Company or other entities that is not available to the investing public (“material nonpublic information”).  You must maintain the confidentiality of material nonpublic information and may not use it in connection with the purchase or sale of Company securities or the securities of any other entity to which the information relates.
• The laws of many countries, particularly the United States, prohibit you from buying or selling Company stock or other securities while in possession of material nonpublic information.  Under Company policy and United States laws, information is material if:

there is a substantial likelihood that a reasonable investor would consider the information important in determining whether to trade in a security; or

• the information, if made public, likely would affect the market price of a company’s securities. 

Information may be material even if it relates to future, speculative or contingent events and even if it is significant only when considered in combination with publicly available information.  Material information can be positive or negative.  Nonpublic information can be material even with respect to companies that do not have publicly traded stock, such as those with outstanding bonds or bank loans.  Therefore, depending on the facts and circumstances, information that could be considered material includes, but is not limited to:
potential or actual

• earnings announcements or estimates, or changes to previously released announcements or estimates;
• financial results;
• writedowns and additions to reserves for bad debts;
• expansion or downsizing of operations;
• new products, inventions or discoveries;
• major litigation or government actions;
• mergers, acquisitions, tender offers, joint ventures or changes in assets;
• changes in analyst recommendations or debt ratings;
• events regarding the Company’s securities (e.g., defaults on senior securities,
• calls of securities for redemption, repurchase plans, stock splits, changes in
• dividends, changes to the rights of securityholders or public or private sales of additional securities);
• changes in control of the Company or extraordinary management developments;
• extraordinary borrowing;
• liquidity problems; and
• changes in auditors or auditor notification that the Company may no longer rely on an audit report.

• You should not trade in Company stock or other securities while in possession of such material nonpublic information.  These prohibitions include transactions in the Company's 401(k) Plan, such as elections to redirect future contributions or realign existing account balances that result in a sale or purchase (intentional or otherwise) of AOI stock.  Additionally, exercising a stock option is prohibited if done while in possession of non-public material information.
• If the material nonpublic information involves another company (in a merger situation, for example), you may not trade in that company’s stock either.  In addition to trading while in possession of material nonpublic information, it is illegal and a violation of the Company’s Insider Trading Policy, as well as the CBC, to convey such information to another (“tipping”) if you know or have reason to believe that the person will misuse such information by trading in securities or passing such information to others who trade.  This applies regardless of whether the “tippee” is related to the insider or is an entity, such as a trust or a corporation, and regardless of whether you receive any monetary benefit from the tippee.  Anyone who violates these laws could be subject to disgorgement, monetary penalties, and imprisonment.
• Information will be considered “public” on the third business day after such information is publicly announced by the appropriate Company officer.  AOI, its directors, officers, employees, and agents are all subject to criminal and civil liability for violating securities law.  Officers, employees, and agents who violate this policy are subject to disciplinary action, up to and including termination of employment.  Likewise, a director’s resignation may be sought.
• For more detailed guidance, please refer to the Company’s Insider Trading Policy.

Corporate Opportunities

• Directors, officers, employees, and agents are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors.  No director, officer, employee, or agent may use corporate property, information, or position for improper personal gain, nor compete with the company directly or indirectly.  Directors, officers, employees, and agents owe a duty to the corporation to advance its legitimate interests when the opportunity to do so arises.

Bribery and Corruption

• Bribery is illegal.  It harms the communities where we operate.  We must actively support efforts to stop bribery.
• Each of us must strictly comply with all domestic and extraterritorial anti-bribery laws.  Extraterritorial anti-bribery laws are the laws of one country that prohibit bribery in other countries.
• We must never provide bribes or “kickback” payments – even in small amounts.  This includes never making a payment to improperly secure regulatory approvals, favorable tax or customs treatment, licenses, permits or any other benefit.
• The U.S. Foreign Corrupt Practices Act (“FCPA”) makes it illegal for a U.S. company, such as AOI, or any of its worldwide subsidiaries, affiliates, agents, sales representatives or other intermediaries and the employees of all of these entities, to give, offer or promise anything of value to a government official with the expectation, hope or intent that the official will influence a decision to do business with the Company.  This includes obtaining new business, retaining existing business, or gaining some advantage.
• The FCPA is enforced criminally by the U.S. Department of Justice (“DOJ”) and civilly by the U.S. Securities and Exchange Commission (“SEC”).  The FCPA has two principal parts: (a) the anti-bribery provisions and (b) the accounting provisions.

The anti-bribery provisions of the FCPA criminalize improper payments to a government official. The basic elements of the FCPA anti-bribery provisions are:
A payment, offer, or promise of anything of value;
to any government official, any non-U.S. political party or party official, any candidate for foreign political office, or any other person while knowing that any portion of the payment or promise to pay will be provided to one of those persons;
with corrupt intent for the purpose of influencing an official act or decision, inducing that person to do or not do any act in violation of his or her lawful duty, or inducing that person to use his influence with a foreign government to affect or influence any government act or decision;
to assist in obtaining or retaining business for or with, or directing business to, any person or company.

• “Anything of value” is defined broadly. In addition to cash, it also includes just about any form of benefit, including benefits to family members and even the ability to direct a benefit to another person.  Examples include:

Cash, cash equivalents, or other benefits (travelers checks, travel benefits);
Personal services;
Employment or the offer of employment;
Charitable contributions for the benefit of the official;
Political contributions; and
Use of the Company’s facilities (including but not limited to aircraft, houses, vehicles, boats, etc.) by government officials or their staff other than for purposes of promoting, demonstrating or explaining the Company’s products or services.

The accounting provisions of the FCPA require companies to maintain books and records that accurately and fairly reflect all business transactions and to maintain internal accounting controls for that purpose.  Among other things, these provisions aim to prevent “slush” funds, off-book transactions and improper expense classifications that can be a means of paying a bribe and concealing the nature of payment.

Violation of the FCPA or other local anti-bribery laws can lead to imprisonment, significant fines, and other penalties.  For example, individuals may be fined up to $250,000 USD and/or imprisoned for up to 5 years for each violation of the anti-bribery provisions; or, for violations of the accounting provisions, individuals may be fined up to $5 million USD and/or imprisoned for up to 20 years.  Additionally, the Company itself faces criminal prosecution, significant fines and other penalties.  Local business practices that ignore or even condone these practices are not a defense.  Any employee who makes or arranges for a gift, offer, or promise of anything of value in violation of this policy is subject to serious discipline by the Company, including dismissal.

The FCPA applies equally to gifts, offers, and promises made directly by an employee or through someone not employed by the Company.  In that regard the FCPA makes it illegal to “look the other way” or ignore facts or circumstances which reasonably suggest that a third party is making illegal gifts, offers or promises on our behalf.  Further, giving money to a third party or intermediary in the belief or with the intention that the third party will make inappropriate or illegal gifts, offers or promises or in willful disregard of the facts of the transaction(s) is itself illegal.

• Who is a Government Official?
• For purposes of the Company’s policy, the definition of “government official” must be understood to be very broad and would include, but is not limited to, customs and immigrant officials; elected and appointed officials such as legislators, mayors, government ministers and all other government employees; officers or employees of public international organizations such as the United Nations, the World Bank or the International Monetary Fund; various tobacco industry regulators such as agricultural inspectors; political party officials or candidates for political office.  
  
  Of critical importance, all employees of whatever rank or position of state-owned or controlled tobacco monopolies, are government officials.  That includes many of the Company’s customers, including but not limited to:
  
  
• China Tobacco International
• Eastern Company
• Fabrika Dunhana Sarajevo, Bosnia & Herzegovina
• Global Tobacco Ltd.
• Imperial Vina Danang
• Japan Tobacco, Inc.
• Khanh Hoi Cigarette Factory
• Korea Tomorrow and Global Corp.
• Libyan Tobacco Company LTC.
• National Tobacco Enterprise, Ethiopia
• Regie National des Tabacs et des Alumettes, Tunisia
• Saigon Tobacco Company
• Societe Nationale des Tabacs et Allumettes, Algeria
• Taiwan Tobacco & Liquor Corporation
• Thailand Tobacco Monopoly
• Tian Li International Co. Ltd.
• Vietnam National Tobacco Corporation
• Vietnam Tobacco Import Export Company

What does this mean?  It means that any person who works for a government, from the Prime Minister to a postal carrier, is considered a “government official” for purposes of Company policies.  Any Court employee, including judges, clerks, etc., are all “government officials” under these policies.  “Government officials” can also include family members of government officials or individuals designated by a government official to receive something of value if the thing of value offered to the family member or other designated individual is really just a way of getting the benefit to the government official.

If you have questions about whether a person involved in a transaction is covered by the relevant anti-corruption laws, you should consult with the CCO or DCC.

Gifts, Travel and Entertainment

The FCPA prohibits providing “anything of value” to foreign officials, except under narrow guidelines.

Gifts:  You may not offer or provide gifts to a government official with an expectation that the offer or gift will provide the Company with a competitive advantage.  Any gift to a government official must be in strict compliance with this Policy.  As a general matter the following principles apply:  (i) cash gifts to government officials are never permitted; (ii) small gifts bearing the Company’s logo may be provided to a government official as a token of esteem or courtesy or in return for hospitality; (iii) the gift should be of nominal value, customary for the country involved and appropriate for the occasion; and (iv) the gift must be permitted under local law and the guidelines of the relevant government agency.  If you have any doubt about whether any such gift is appropriate you must first contact the Company’s CCO or DCC.

Travel Expenses:  Any payment by the Company for travel and lodging for government officials (including our monopoly customers) must be approved in advance by the CCO or DCC.  As a general matter, the following principles will apply:  (i) only expenses directly related to the promotion or facilitation of Company business will be reimbursed; (ii) only reasonable (no first class) airfare will be reimbursed; (iii) the Company may not select the particular government officials who will travel (rather, the government agency or AOI customer must do so); (iv) only the designated officials’ travel may be reimbursed, not expenses incurred by the officials’ family members; and (v) expenses associated with leisure activities and the payment of per diems to government officials are in all cases subject to prior written approval by the CCO or DCC.

• Business Entertainment:  You may not entertain government officials with an expectation that the entertainment (or offer of entertainment) will provide the Company with a competitive advantage.  Business courtesies or entertainment that might be appropriate when dealing with our non-monopoly customers may not be appropriate when dealing with monopoly customers (government officials).  Entertainment of government officials is permitted only in cases when the expense is (i) directly related to the promotion, demonstration or explanation of Company business; (ii) reasonable in amount; (iii) permitted under local law and the official’s employer’s guidelines; (iv) commensurate with local custom; and (v) avoids the appearance of impropriety.  If you have any doubt about whether an entertainment expense is appropriate you must first contact the CCO or DCC.
  
• You must ensure at all times that any gifts, travel or entertainment provided to government officials fully comply with all Company policies, regardless of local customs or practices.

Facilitating or “Grease” Payments:  In some countries, government employees request small payments to expedite or facilitate routine governmental action.  Such payments are only permitted in the following circumstances:

• The payment is small;
• The payment is to obtain routine governmental action and the Company has otherwise met all requirements for the government action.  Routine governmental action does not include discretionary decisions relating to business; and
• The payment is consistent with local law, regulation, and practice, or there is no alternative to facilitate the routine governmental action.

Of critical importance, and although these payments in very limited circumstances may be permissible under the FCPA, they may not be legal under the laws of other countries, including the country in which the payment is being sought, the UK Bribery Act, the O.E.C.D. Anti-Bribery Convention and others.  Thus, such payments should be considered, if at all, only in exceptional and unavoidable circumstances. When possible, and if you have advance notice, then written approval should be obtained from the CCO or DCC. 

Further, if in a rare circumstance when such a payment cannot be avoided, it is both appropriate and legally required that such payment be adequately explained and recorded accurately in the books and records of our relevant company entity  Under no circumstances should any such payment be disguised in our books and records. If you have questions concerning facilitating payments, consult with AOI’s CCO or DCC.

Accepting / Providing Gifts to Private Customers and Suppliers

AOI does not want business obtained through the improper use of business courtesies.  You should be sensitive to this issue.  As a director, officer, employee, or agent, you should carry out your duties and responsibilities in a manner that is in the best interest of the Company.  That means you must not let any personal interests conflict with your ability to represent the Company’s best interests.  Use your best judgment as to what courtesies are appropriate, but keep in mind the following principles.

In dealing with private customers, you may give or accept gifts of small value as tokens of respect or friendship.  However, CASH IS NEVER PERMITTED.  Other non-acceptable items include:

• any loans, except contractual loans from financial institutions in the normal course of business;

• meals, beverages, entertainment, travel or lodging, or payment for such items, except where the provider is present, and the item is directly related to a business activity.
  
  
• Not only must you be careful in accepting personal gifts; you must also be careful about providing personal gifts or benefits to those with whom you do business.
  
  
• The Company expects you to cultivate strong customer relationships.  These require personal attention and service.  You should not entertain lavishly or give expensive gifts to private suppliers, customers, or others with whom you do business, and they should not expect such treatment from you.  Gifts, favors and entertainment may be given to private parties if they are:
  
  
• consistent with accepted business practice;

• not expensive and could not be construed as a bribe or pay-off; and

• consistent with this Code and applicable legal and ethical standards.

Political Activity and Contributions

Political contributions by the Corporation or any of its subsidiaries, whether monetary or non-monetary, must be approved in advance by the Company’s CCO or DCC.

Employees in their individual capacity are encouraged to participate in the political process.  You must, however, scrupulously avoid even the appearance of lending the prestige of the Company in support of a particular candidate or issue.  Under no circumstances may you use Company letterhead in connection with participation in the political process.  Also, under no circumstances will the Company reimburse any employee for making a personal political contribution.

Acting as a representative of the Company, you may only participate in partisan political activities as specifically directed by the Chief Executive Officer.  If you are authorized to participate in a political campaign on behalf of the Company, you must be careful not to engage in activities which could be considered lobbying.  Lobbying is subject to various federal, state, and local laws and entails reporting requirements.  If you have questions concerning political activities, consult with AOI’s CCO or DCC.

Charitable Contributions

Even when given in good faith, corporate charitable contributions are often problematic because of a potential affiliation between the charity and a government official.  Accordingly, all corporate charitable contributions must be approved in advance by the CCO or DCC.

Outside Business Interests

• From time to time you may have the opportunity to engage in business enterprises outside of the Company.  If so, you must abide by some strict guidelines. 
  
  
• First, you may not serve as a director, officer, employee, or consultant of a competitor of the Company.  Nor may you have a financial interest in a competitor, unless that interest consists of less than 5% of the outstanding securities of a publicly-held corporation.  Second, if you become aware of any situation where a member of your immediate family may benefit, or appear to benefit, from a transaction with the Company, you must inform the CCO or DCC promptly.  Additionally, if you are thinking about acquiring an interest in any type of property that the Company might have an interest, you must inform the CCO or DCC.

Outside Employment

• Outside employment not connected with the Company is permitted so long as it does not interfere or conflict with your duties and responsibilities to the Company. You are encouraged to become involved in charitable, professional, and civic organizations, but only if it does not interfere with your duties to AOI. 
  
  
• It is a conflict of interest for a director, officer, employee, or agent of AOI to work simultaneously for an AOI competitor, customer or supplier.  You are not allowed to work for a competitor as a consultant or board member.  The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except to conduct business for AOI.

Use of Software

• Copying software violates Company policy and, in certain circumstances, copyright laws, and may place the Company in violation of its obligation to software publishers.  This prohibition applies to everyone regardless of country, location and/or local customs.

Confidentiality

• Each of us has the responsibility to make sure that Company assets, including confidential information, are only used for Company business.  You should not use AOI facilities, materials, equipment, or employee services for any purpose not related to the business of the Company without proper approval. 
  
  
• “Assets” include more than physical equipment and structures. Most of the information that you develop as part of your job is “proprietary” --- that is, a valuable Company asset.  Such information could include sensitive strategic, financial, employment, and business plans, documents, or databases.  Any information concerning our customers, particularly any information covered by a confidentiality/non-disclosure agreement, is also considered “‘proprietary”‘ and should be regarded as confidential.  Please keep in mind that much of our confidential information is stored electronically.  You should protect electronic data just as carefully as you would protect any paper document. 
  
  
• You should be careful not to share Company proprietary information with others, including fellow employees, unless they need to know it for a legitimate business reason.  Unauthorized disclosure could destroy its value, and give unfair advantage to others outside the Company.  Also remember that unintentional disclosure (for example, through indiscreet conversations over cellular telephones or in public places such as planes, elevators, restrooms or restaurants) can be just as damaging to AOI.
   
• When you leave the Company, you must not take any confidential information from AOI and reveal it to a competitor, new employer, or any other outside person or organization.

Accuracy of Financial Reporting 

• Each of us records or prepares information of some description in the course of carrying out our job responsibilities.  Some common examples are financial disclosures, accounting records, business plans, regulatory submissions and expense reports.  Many people, inside and outside the Company, rely on this information as truthful and accurate.  It is your responsibility to adhere to the Company policies and procedures and provide only information which is truthful, accurate, complete, objective, relevant, timely and understandable. 
  
  
• AOI has implemented accounting procedures including internal accounting controls to protect Company assets and ensure the accuracy and reliability of both financial and non-financial information.  The following rules apply to everyone.
  
  
• No secret unrecorded funds, assets, or expenses may be maintained for any reason.

• Do not fail to properly record and disclose any fund, asset, or expense of the Company.
  
  
• Do not record any false or artificial entry on any book or record of the Company.
  
  
• Do not take any action to improperly influence, coerce, manipulate, or mislead any independent public or certified accountant engaged in an audit of the Company’s financial statements.

• Do not make any payment on behalf of the Company with the understanding that the funds will or may be used for something other than the stated purpose.

• Report (on an anonymous or confidential basis if you prefer) to the CCO, DCC, or the Audit Committee any concerns you may have regarding accounting or auditing matters.
  
  
• To assure the credibility of the information, it is subject to review by both inside and outside auditors, including government officials.  You must not deviate from the Company’s procedures and approved practices for collecting and reporting accurate information.  Nor should you allow a supervisor or fellow employee to require you to do so.  Violations of truthful reporting may result in disciplinary action, including dismissal.

Communications to the Public

• The Chief Executive Officer, or his designees, is authorized to speak on behalf of AOI and arrange for the release of AOI’s financial results.  Any requests for information concerning the Company from analysts, shareholders or the media should be referred to the Director of Investor Relations.  Releasing corporate information through other channels is a violation of Company policy.  

Compensation and Benefits

Non-Discrimination / Equal Opportunity / Non-Harassment

• The Company is committed to non-discrimination and equal employment opportunity.  All employees and applicants for employment shall be treated without discrimination or harassment based on race, color, religion, marital status, sexual preference or sexual orientation, national origin, age, veteran status, disability or citizenship in accordance with all applicable laws.  This policy applies to hiring, promotions, transfers, discipline, training, wage and salary administration, and all other aspects of employment. 
•  
• Because the United States government considers the Company to be a “federal contractor” for certain purposes the Company will comply fully with Equal Opportunity clauses and Non-segregated Facilities provisions of government contracts.
•  
• Mistreatment of, or discrimination against, a fellow employee is not acceptable.  We expect the same behavior from all visitors, such as existing and prospective customers and suppliers, to our facilities.
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• Sexual harassment is prohibited and will not be tolerated.  It includes any form of harassment of a sexual nature, whether physical or verbal, including conditioning promotions, raises, desirable job assignments or other favorable employment action upon sexual favors or submission to sexual advances; unwelcome physical contact; remarks of a sexual nature; and other actions or words that tend to create an intimidating, hostile, or offensive working environment.
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• Employees will comply fully with all applicable labor and employment statutes governing discrimination in the workplace.  Employees who engage in any form of prohibited discrimination or harassment will be disciplined appropriately.  Employees who believe they have been discriminated against should file a complaint with their human resource representative and should feel free to contact AOI’s Director of Human Resources at any time.
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Cooperation in the Investigation of Wrongdoing

• It is the policy of the Company to cooperate in the investigation by government authorities of any criminal or fraudulent conduct and no director, officer, employee or agent of the Company may retaliate against any person for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any violation of law. Additionally, the Company’s employees are expected to fully cooperate in the event the Company conducts internal compliance investigations.
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Working in our Environment

Drug-Free Workplace

• The Company is committed to ensuring that all employees refrain from engaging in unlawful drug activity in the workplace. To attain this goal, the Company has established a Drug Free Awareness Program.
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• The Company complies with the Drug-Free Workplace Act of 1988 (“‘DFWA”‘), which requires that the Company maintain a drug-free workplace and establish programs to ensure that such requirement is met.  The DFWA specifically prohibits the unlawful manufacture, distribution, dispensation, possession or use of controlled substances in the workplace.  Adherence to the requirements of the DFWA is a condition for the Company to perform work in connection with certain federal government contracts. 
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• The Company will take appropriate disciplinary action, including dismissal, against any employee who violates this policy.  The Company may, in appropriate circumstances and at the Company’s sole discretion, however, require such employee to complete a drug abuse assistance or rehabilitation program. 
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• Each employee has an affirmative duty to advise either their human resources representative or AOI’s Director of Human Resources within five days of learning of any drug statute criminal conviction --- their own or that of another employee --- arising out of conduct that occurred in the workplace.  Violation of this affirmative duty may constitute grounds for discipline including dismissal.
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Health and Safety

• The health and safety of employees is of paramount concern to the Company.  It is the Company’s policy to provide a workplace that is in compliance with all applicable national and local laws and regulations enacted to protect the health and safety of its employees. 
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• Employees who violate these laws jeopardize not only their own health and safety, but also the health and safety of other employees.  For this reason, anyone who fails to comply with these laws will be subject to disciplinary action by the Company.

Environmental Regulations

• It is AOI’s policy to conduct its operations in accordance with all applicable national and local environmental laws and regulations in order to preserve and protect the environment.  Furthermore, the Company strives to take voluntary initiatives to improve the environmental performance of the Company.  You are expected to fully comply with all applicable laws and should contact the CCO, with any questions or concerns you may have regarding environmental compliance issues.
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Working in the Marketplace

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• AOI conducts business all over the world.  Sometimes actions taken in one country can create legal exposure for the Company under the laws of another country, particularly under U.S. laws.  Anti-competition and trade regulation laws are complex and cannot be fully explained in this guide.  Personnel who are likely to encounter anti-competition and trade regulation issues in the course of discharging their business responsibilities are directed to copies of the Anti-competition and Trade Regulation Compliance Manual.  All personnel should have at least a basic understanding of these issues. 
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Anti-Boycott

• A boycott occurs when one person, group, or country refuses to do business with certain other people or countries.  U.S. anti-boycott laws prohibit U.S. companies and their global subsidiaries from cooperating with any international boycott, unless it has been approved by the U.S. government (for example, economic sanctions imposed by the UN).  U.S. companies and their worldwide subsidiaries must report to the U.S. Government any requests they receive to engage in a boycott.
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Federal Criminal Laws on Fraud

• If you intentionally deceive or defraud another person or business in a transaction, you’re probably violating the laws of most, if not all, of the jurisdictions in which AOI does business.  For example, misrepresentations regarding tobacco quality, content or value made in offers or invoices to customers, reports to governments or documents for shipping or banking, may give rise to liability for mail or wire fraud, racketeering or other crimes.  Likewise, discussions about such misrepresentations through the use of the telephone, facsimile, electronic mail or postal mail may constitute fraud. 
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• The United States federal criminal laws on fraud are far-reaching, and individuals are subject to severe fines and imprisonment for violating these laws.  AOI prohibits such conduct and it expects its employees to comply fully with applicable laws. 
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Money Laundering

• Money laundering occurs when persons try to make the proceeds of crime appear legitimate by filtering them through non-criminal ventures.  Laws in many countries prohibit acceptance or use of the proceeds of criminal activities.
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• You must comply with all applicable money laundering laws and laws that require reporting of cash and other suspicious transactions.
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• You must use due diligence to obtain enough information about customers, suppliers, and others with whom you have business relationships to be satisfied that their money comes from legitimate business activities.

• You must comply with all rules concerning acceptable forms of payment.  It is against Company policy to accept cash payment of any invoice.  It is also against Company policy, except under extraordinary circumstances with the advice of Company counsel, to accept payments in cash equivalents such as money orders or travelers checks, or to accept checks from unknown third parties.  If a cash or similar transaction is unavoidable, you must obtain authorization from an appropriate officer of the Company and take care to comply with the detailed and complex reporting obligations associated with such transactions, including obligations imposed by the United States Internal Revenue Service.

• You must to the extent possible be sure all customers, suppliers, and others with whom you have a business relationship are willing to comply in full with all record keeping duties and are willing to accurately report all aspects of a transaction.

• You must display particular vigilance when a transaction bears one or more hallmarks of a laundered transaction, such as:

• Cash or unusual payments;
• Early repayment of credit;
• Orders or purchases or other activities inconsistent with the nature of your customer’s business;
• Unusual payment patterns, unnecessarily complex deal structures or unusually favorable payment terms;
• Transactions from or to locations known as tax havens or associated with money laundering; and,
• Requests to transfer money to an unknown party or unrecognized account.
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Antitrust and Fair Competition

• Throughout the world, AOI’s business activities must comply with antitrust and fair competition laws of various countries.  The laws are intended to promote competition.  They prohibit agreements or collective actions among competitors which have the effect of restraining trade or reducing competition.  The following agreements or collective actions are illegal:
  
  
• setting or controlling the prices paid to suppliers or charged to customers, among competitors;

• allocating products, territories, or markets;

• boycotting certain suppliers or customers; or

• limiting the production or sale of products.

Most antitrust and fair competition laws also prohibit the use of a dominant market position to drive a competitor out of business, independent of natural market forces.  Antitrust and fair competition laws differ around the world.  If you are concerned that a business activity in which you are requested to participate may involve an antitrust issue, you should consult the Corporate Compliance Officer for guidance.

Trade Sanctions

Occasionally, governments implement trade and/or travel restrictions on imports from or exports to foreign countries.  U.S. laws may limit or prevent global subsidiaries of the Company from engaging in certain transactions that would result in direct or indirect shipments of goods or the facilitation of credit to such embargoed countries.  It is the Company’s policy to comply with all laws which are enacted to restrict trade with certain countries.

Shipping Laws / Customs

You must comply with all shipping rules and regulations, such as laws regarding appropriate shipping documentation.  In particular, no employees or agents are permitted to make unofficial payments for logistics or customs services without the advance approval of the CCO or DCC.  The activities described below require increased vigilance:

• The United States and certain other countries have laws requiring the marking of goods to indicate the country of origin to the ultimate purchaser.  You must be aware of and comply with these and all other laws regarding the proper labeling of products.

• The Company is entitled to “drawbacks” of import and other duties paid when goods are processed and subsequently exported under conditions specified by law and regulation.  You should ensure that drawback claims do not contain false statements.

• You must not pay or participate in illegal rebates or kickbacks.

• You must not prepare or facilitate the preparation of invoices for sales by the Company which do not accurately reflect the price of goods sold.

• Negative or blacklist certifications in connection with export transactions or letters of credit.

• Inaccurate or misleading documentation requested by trading partners.

• Exchanges of value not reflected in invoices and other official documentation.

• Dealings with new trade partners.

Other Anti-competition Issues

You must consider, with the advice of Company counsel, potential anticompetitive effects of the following:

• Proposed mergers, acquisitions, and other business combinations.

• Accepting a position, or allowing another employee or officer of the Company to accept a position, on another Company’s board of directors.

• Requiring customers to purchase bundled goods and services.

• Exclusive licensing and other technology agreements that restrict the freedom of the licensee or licensor.

• Distribution or other cooperative arrangements with competitors.

Conclusion

Our Policy in Brief

AOI counts on you to uphold the Company’s standards set forth in this Code.  The following briefly describes how to act responsibly in the work environment consistent with the Code:

• Know and live the standards.  By knowing, understanding, and following applicable laws and Company policies, as well as our core values, each of us can serve as a role model.

• Know the law and ask tough questions.  You are expected to be familiar with the laws that apply to your specific job function and level of responsibility.  If you are not sure whether a law or Company policy applies, or whether it exists at all, ask.

• Don’t make assumptions.  Do not assume that management already knows or doesn’t care about an issue or situation. Also, do not assume that no action will be taken.  AOI management is dedicated to ensuring that the standards of legal and ethical behavior are upheld.  We want you to tell us if something is wrong.

• Don’t ignore violations. We all need to take the law and Company policies seriously. If you think someone may be violating a law or policy, please take steps to address the situation. 

• Don’t be pressured.  It is never acceptable to violate a law or policy, nor should you ever feel encouraged or pressured to do so – even if the violation will improve the bottom line or help to meet a performance goal.