Nozomi Networks Anti-Bribery & Anti-Corruption Policy

1. Introduction

Nozomi Networks is committed to conducting its business ethically and in compliance with all applicable laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the United Kingdom Bribery Act (“UKBA”) and similar laws in other countries that prohibit improper payments to obtain a business advantage. This document describes Nozomi Networks’ Policy prohibiting bribery and other improper payments in the conduct of Nozomi Networks business operations and employee responsibilities for ensuring implementation of the Policy. Questions about the Policy or its applicability to particular circumstances should be directed to legal-compliance@nozominetworks.com.

2. Policy Overview

Nozomi Networks strictly prohibits bribery or other improper payments in any of its business operations. This prohibition applies to all business activities, anywhere in the world, whether involving government officials or other commercial enterprises. A bribe or other improper payment to secure a business advantage is never acceptable and can expose individuals and Nozomi Networks to possible criminal prosecution, reputational harm or other serious consequences. This Policy applies to everyone at Nozomi Networks, including all directors, officers, employees, family members, consultants, contractors or other intermediaries (including but not limited to Nozomi Networks’ suppliers, partners, resellers, and distributors) acting on Nozomi Networks’ behalf to refrain from engaging in any form of bribery or corruption, irrespective of citizenship, domicile, or location. Each officer and employee of Nozomi Networks has a personal responsibility and obligation to conduct Nozomi Networks’ business activities ethically and in compliance with all applicable laws based on the countries wherein Nozomi Networks does business. Failure to do so may result in disciplinary action, up to and including dismissal.

Improper payments prohibited by this policy include bribes, kickbacks, excessive gifts or entertainment, or any other payment made or offered to obtain an undue business advantage. These payments should not be confused with reasonable and limited expenditures for gifts, business entertainment and other legitimate activities directly related to the conduct of Nozomi Networks’ business.

Nozomi Networks has developed a comprehensive program for implementing this Policy, through appropriate guidance, training, investigation and oversight. Nozomi Networks’ Legal and Compliance Department has overall responsibility for the program, supported by the executive leadership of Nozomi Networks. Nozomi Networks’ Legal and Compliance Department is responsible for giving advice on the interpretation and application of this policy, supporting training and education, and responding to reported concerns. The prohibition on bribery and other improper payments applies to all business activities, but it is particularly important when dealing with government officials. The U.S. Foreign Corrupt Practices Act and similar laws in other countries strictly prohibit improper payments to gain a business advantage and impose severe penalties for violations. The following summary is intended to provide personnel engaged in international activities a basic familiarity with applicable rules so that inadvertent violations can be avoided, and potential issues recognized in time to be properly addressed.

3. Common Questions About Anti-Bribery Laws

3.1 What do anti-bribery laws prohibit?

The FCPA, UKBA and other anti-bribery laws make it unlawful to bribe a government official to gain an “improper business advantage.” An improper business advantage may involve efforts to obtain or retain business, as in the awarding of a government contract, but also can involve regulatory actions such as licensing or approvals. Examples of prohibited regulatory bribery include paying a government official to ignore an applicable customs requirement. A violation can occur even if an improper payment is only offered or promised and not actually made, it is made but fails to achieve the desired result, or the result benefits someone other than the giver (for example, directing business to a third party). Also, it does not matter that the government official may have suggested or demanded the bribe, or that a company feels that it is already entitled to the government action.

3.2 Who is a “government official”?

A “government official” can be essentially anyone who exercises governmental authority. This includes any officer or employee of any government department or agency, whether in the executive, legislative or judicial branch of government, and whether at the national, state or local level. Officials and employees of government-owned or controlled enterprises also are covered, as are private citizens who act in an official governmental capacity. Government official status often will be apparent, but not always. In some instances, individuals may not consider themselves officials or be treated as such by their own governments but nevertheless exercise authority that would make them a “government official” for purposes of anti-bribery law.

For example, a government official maybe any of the following:

• Any officer or employee of any government entity, department, or agency;
• Any employee of a state or government-owned business, school, hospital, or other entity;
• Any political party or official thereof;
• Any candidate for political office;
• A public international organization or any department or agency thereof (e.g., the United Nations, Olympic Organizing Committee, FIFA Committee, and World Bank); or
• Any person acting in an official capacity on behalf of a government entity.

Personnel engaged in international activities are responsible under this Policy for inquiring whether a proposed activity could involve a government official or an entity owned or controlled by any whether foreign or domestic government and should consult with Nozomi Networks’ Legal and Compliance Department when questions about status arise.

3.3 What types of payments are prohibited?

The FCPA prohibits offering, promising or giving “anything of value” to a government official to gain an improper business advantage. In addition to cash payments, “anything of value” may include:

• Gifts, entertainment or other business promotional activities;
• Covering or reimbursing an official’s expenses;
• Offers of employment or other benefits to a family member or friend of a government official;
• Political party and candidate contributions;
• Charitable contributions and sponsorships.

Other less obvious items provided to a government official can also violate anti-bribery laws. Examples include in-kind contributions, investment opportunities, stock options or positions in joint ventures, and favorable or steered subcontracts. The prohibition applies whether an item would benefit the official directly or another person, such as a family member, friend or business associate.

It is prohibited for Nozomi Networks or its directors, officers, employees, consultants or contractors to:

• Give, promise to give, or offer, a payment, gift or hospitality to a third party or otherwise engage in or permit a bribery offence to occur, with the expectation or hope that an advantage in business will be received, or to reward a business advantage already given.
• Give, promise to give, or offer, a payment, gift or hospitality to a third party to “facilitate” or expedite a routine procedure.
• Accept a payment, gift or hospitality from a third party if you know or suspect that it is offered or provided with an expectation that a business advantage will be provided by the Company in return.
• Threaten or retaliate against another employee or worker who has refused to commit a bribery offence or who has raised concerns under this Policy.
• Engage in any activity that might lead to a breach of this Policy.

Non-compliance with the Policy may result criminal or civil penalties which will vary according to the offence. An employee acting in contravention of the Policy will also face disciplinary action up to and including summary dismissal.

3.4 Red Flags

The following is a list of “red flags” that may indicate the possible existence of corrupt practices and should be kept in mind by all those subject to this Policy:

• Use of an agent with a poor reputation or with links to any government.
• Unusually large commission payments or commission payments where the agent does not appear to have provided significant services.
• Cash payments, or payments made without a paper trail or without compliance with normal internal controls.
• Unusual bonuses to government personnel for which there is little supporting documentation.
• Payments to be made through third party countries or to offshore accounts.
• Private meetings requested by public contractors or companies hoping to tender for contracts.
• Not following Nozomi Networks policies or procedures – abusing the decision-making process.
• Unexplained preferences for certain sub-contractors.
• Invoices rendered or paid in excess of contractual amounts.

4. Forms of Bribery and Corruption

For purposes of this Policy, each of the examples below is referred to as a “bribery offence”.

• A bribe is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or business or personal advantage.
• An inducement is something which helps to bring about an action or desired result.
• A business advantage means that Nozomi Networks is placed in a better position (financially, economically, or reputationally, or in any other way which is beneficial) either than its competitors or than it would otherwise have been had the bribery or corruption not taken place.
• Kickbacks are payments of any portion of a contract made to employees of another contracting party or the utilization of other techniques, such as subcontracts, purchase orders or consulting agreements, to channel payment to public officials, political parties, party officials or political candidates, to employees of another contracting party, or their relatives or business associates.
• Extortion means to directly or indirectly demand or accept a bribe, facilitation payment or kickback.

5. Responsibilities Under the Law

Under the law, Nozomi Networks and individual officials or employees may be held liable for improper payments by an agent or other intermediary if there is actual knowledge or reason to know that a bribe will be paid. Willful ignorance – which includes not making reasonable inquiry when there are suspicious circumstances – is not a defense, and it also does not matter whether the intermediary is itself subject to anti-bribery laws. All employees therefore must be alert to potential “red flags” in transactions with third parties.

Nozomi Networks and its affiliates must keep accurate books and records that reflect transactions and asset dispositions in reasonable detail, supported by a proper system of internal accounting controls. These requirements are implemented through Nozomi Networks’ standard accounting rules and procedures, which all personnel are required to follow without exception. Special care must be exercised when transactions may involve payments to government officials. Off-the-books accounts should never be used. Facilitation or other payments to government officials should be promptly reported and properly recorded, with respect to purpose, amount and other relevant factors. Requests for false invoices or payment of expenses that are unusual, excessive or inadequately described must be rejected and promptly reported. Misleading, incomplete or false entries in Nozomi Networks’ books and records are never acceptable.

Nozomi Networks has established detailed standards and procedures for the selection, appointment and monitoring of agents, consultants and other third parties. These standards and procedures must be followed in all cases, with particular attention to “red flags” that may indicate possible legal or ethical violations. Due diligence ordinarily will include appropriate reference and background checks, written contract provisions that confirm a business partner’s responsibilities, and appropriate monitoring controls. Personnel working with agents and other third parties should pay particular attention to unusual or suspicious circumstances that may indicate possible legal or ethics concerns, commonly referred to as “red flags.” The presence of red flags in a relationship or transaction requires greater scrutiny and implementation of safeguards to prevent and detect improper conduct. Appointment of an agent or other third party ordinarily requires prior approval by an appropriate senior manager, description of the nature and scope of services provided in a written contract, and appropriate contractual safeguards against potential violations of law or Nozomi Networks policy.

This Policy imposes on all personnel specific responsibilities and obligations that will be enforced through standard disciplinary measures and properly reflected in personnel evaluations. All officers, employees and agents are responsible for understanding and complying with the Policy, as it relates to their jobs. Every employee has an obligation to:

• Be familiar with applicable aspects of the Policy and communicate them to subordinates;
• Ask questions if the Policy or action required to take in a particular situation is unclear;
• Properly manage and monitor business activities conducted through third-parties;
• Be alert to indications or evidence of possible wrongdoing; and
• Promptly report violations or suspected violations through appropriate channels.

Any employee who has reason to believe that a violation of this Policy has occurred, or may occur, must promptly report this information to his or her supervisor, the next level of supervision, or Nozomi Networks’ Legal and Compliance Department. Alternatively, information may be reported in confidence by calling the company hotline 1-800-314-6114 ext.120, or via email to: legal-compliance@nozominetworks.com.

Retaliation in any form against an employee who has, in good faith, reported a violation or possible violation of this Policy is strictly prohibited. Employees who violate this Policy will be subject to disciplinary action, up to and including dismissal. Violations can also result in prosecution by law enforcement authorities and serious criminal and civil penalties. When seeking guidance and/or reporting concerns, the following contacts and reporting options are available to you: CEO, VP of Finance, Human Resources, or the Legal Department.

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