Standards Of Business Conduct

The Company relies on the judgment and personal standards of each of its employees in conducting its business with honesty, integrity, and in compliance with the law. From time to time, you will encounter work situations that challenge your judgment and raise a variety of ethical and legal questions. In those situations, refer to the Ethics Policy, these Standards of Business Conduct, and the applicable Company Policies to evaluate and respond in a manner that meets the Company's ethical standards and legal requirements.

The Standards of Business Conduct reflect our Company values and are intended to serve as a guide and reference to support your day-to-day decision making. The Standards provide guidelines to appropriate behavior, and complement our Company Policies. As a reference, the Standards can be used to locate relevant documents, services, and other resources related to ethical behavior in our business operations. The Standards are also intended to encourage discussion of ethics issues and to improve how you deal with the ethical dilemmas and gray areas that you encounter in everyday work. The Standards are not intended to cover every possible situation, and whenever a question arises about the propriety of certain actions, you are obligated to seek advice and counsel from your supervisor, other levels of management as appropriate, or the Ethics Officer. Supervisors and managers are responsible for creating and maintaining an environment that champions proper business conduct and allows employees to feel free to question or report suspected improprieties without fear of retribution.

The Standards of Business Conduct apply to all employees of the Company. As with all of our Company Policies, violation of these Standards may result in disciplinary action up to and including termination of employment. You are required to be aware of the Standards and to acknowledge that you are aware of, understand, and will comply with the Standards of Business Conduct. You will also receive awareness training regarding our Ethics Policy and Standards of Business Conduct on a periodic basis.

Conducting SRC's Business

Gifts and Kickbacks

All Company business dealings, including the marketing and sale of products and services, should be without the perception that favorable treatment was sought, received, or provided in exchange for gifts or kickbacks.

Kickbacks. You may not offer or accept a Kickback, directly or indirectly, in any Company business dealings. You are required to notify the Ethics Officer of any potential or suspected kickback situation.

Gifts to Government Personnel. You are not permitted to give anything of value to government customer employees, including Business Courtesies, except as follows:

• Modest refreshments such as soft drinks, coffee, and donuts on an occasional basis in connection with business activities.
• Gifts with a Market Value of $20 or less, provided that the aggregate Market Value of Gifts given to a government customer employee by SRC does not exceed $50 in a calendar year.

This means you cannot pay for meals or entertainment for government customer employees where the cost of the meal or entertainment exceeds $20.

Gifts to Non-Government Personnel. You are prohibited from offering or giving tangible gifts (including tickets to sporting, recreational, or other events) having a market value of more than $150 in a single calendar year, to a person or entity with which the Company does or seeks to do business, unless specifically approved in writing by your supervisor and the Ethics Officer. In addition to the dollar limit, the gift giving must be consistent with marketplace practices, and may not occur more than twice in any calendar year.

Gifts to Foreign Government Personnel. U.S. and foreign laws often prohibit payments of money and gifts to foreign government employees and public officials. The Foreign Corrupt Practices Act, for example, makes it a crime to pay money or to give gifts, including, but not limited to, meals, gratuities, entertainment, or other things of value to a foreign government employee or foreign public official to assist SRC or another to obtain or retain business with a foreign governmental entity. It does not matter whether the improper payment or gift is made directly by the Company or indirectly through someone acting for the Company. You must contact the Ethics Officer before offering or authorizing gifts or the payment of money, directly or indirectly, to a foreign government employee or public official.

Employees with Purchasing Responsibility. More restrictive policies apply to Procurement Personnel. Procurement Personnel are not permitted to solicit or accept any gift, including Business Courtesies, from any person or entity that does or seeks to do business with the Company, except for advertising or promotional items of nominal value, and holiday gift baskets of reasonable value that are shared with staff inside and outside the purchasing department.

Business Development and Proposal Activity

Within the context of the highest legal and ethical standards, you are expected to compete vigorously and effectively for new business.

Favored Treatment. In pursuing business opportunities, you may not offer improper favored treatment designed to gain a competitive edge. This includes offering customers, or potential customers, gifts, gratuities, entertainment, other payments, or loans as an inducement for favorable award to the Company.Information Gathering. Obtaining sufficient and accurate information can be critical in effective marketing and in the development of winning proposals. If you are responsible for gathering such data, you must ensure that the Company has a legal right to the information you gather.

Proposals. You should make every effort to understand the customers' requirements, and prepare and submit proposals that realistically represent performance, cost, and schedule. You are required to observe all laws, rules, and regulations governing acquisition of goods and services by the government. All cost estimates must be developed in accordance with Company Estimating Policy and procedures. When submitting proposals to the customer for reimbursement of costs, you may request reimbursement only for costs that are reasonable in amount, and that are clearly allowable under applicable government regulations.

Negotiating and Performance of Contracts

In negotiating and performing government contracts, you are required to comply with all applicable government contracting laws and regulations.

Truth in Negotiations Act. Where applicable in negotiated contracts, the Truth in Negotiations Act (TINA) requires disclosure and certification of all current, accurate, and complete cost or pricing data that a reasonable buyer or seller would believe might significantly affect the price of a government contract or subcontract. The definition of data that must be disclosed is very broad and includes facts, but also management decisions, estimates (based on verifiable data), and other information that a reasonable person would expect to affect the negotiations. When the Company is required to provide its customer with cost or pricing data, the data will be accurate, current, and complete up to and including the date of agreement on price.

Quality of Services and Work Product

The Company's policy is to deliver quality products and services to the government at fair and reasonable prices.

Quality of Services. You are required to ensure that the quality standards of the Company and its contracts are met, that all research and development services are performed with the highest of professional standards, and that all contract documentation is complete, accurate, and truthful. The Company is committed to deliver goods and services that meet all contract requirements and give the customer the highest degree of confidence in our products and services. Improprieties, such as the failure to conduct required testing or manipulation of test procedures or data, will not be tolerated. No employee shall knowingly misrepresent in any way the condition or status of products being prepared or offered for inspection, testing, or delivery.

Recruiting and Employing Current or Former U.S. Government Personnel

Current or Former Government Employees. Special legal restrictions may apply to the work that a former government employee may perform for the Company as an employee, consultant, or subcontractor. These "revolving door" rules restrict current and former government employees' employment outside the government. In some cases (e.g., procurement officials), even discussions of possible employment or engagement are prohibited. Before entering into employment or engagement discussions with active government employees, or before making an offer of employment or engagement to former governmental personnel, coordinate your activities with your Human Resources Manager.

Procurement Integrity

Procurement decisions will be made exclusively on the basis of the Company's best interests, considering such factors as quality, service, price, financial responsibility, and maintenance of reliable sources of supplies. You may not seek or receive favored treatment from a potential or actual supplier in the form of gifts, gratuities, entertainment, loans, or other payments that would influence your judgment in recommending or selecting a supplier of goods or services for the Company. If you are involved in the procurement process, you need to take the time to understand the requirements for the item or service to be purchased, and you are responsible for following the Purchasing Policy and Procedures.

Relationships with Suppliers, Vendors, Consultants and Subcontractors

Source Selection. You must be careful to avoid obtaining sensitive procurement information from federal government agencies. During the conduct of any procurement action, you may not solicit or obtain from any officer or employee of the government, or any other source, any proprietary, competitive, or source selection information regarding that procurement. This prohibition begins with the development, preparation, and issuance of a solicitation and concludes with award of a contract, contract modification, or extension. The restriction on proprietary data includes information contained in a bid or proposal, cost or pricing data, and any information submitted to the government by a contractor and properly designated as proprietary. Source selection information includes such information as listings of offerors, rates, prices, listings of bidders prior to bid opening, source selection plans, technical evaluations of competing proposals, competitive range determinations, rankings (except for sealed bidding), source selection board reports, evaluations, and recommendations, and other information that would jeopardize the integrity or successful completion of the procurement if disclosed.

Reciprocal Agreements. You cannot make a decision to buy services or products solely because the supplier buys or uses any goods or services sold by the Company. Reciprocal sales agreements for this purpose are strictly forbidden.

Consultants. Consultants providing services to the Company are required by contract to comply with all laws and regulations relating to U.S. government contracting and the Company's Ethics Policy and Standards of Business Conduct.

Subcontractors. Subcontractors providing services to the Company are required by subcontract to comply with all laws and regulations relating to U.S. government contracting and when required, to have business ethics awareness and compliance programs.

Organizational Conflicts of Interest

Organizational Conflicts of Interest (OCIs) may arise in a variety of ways. OCIs may involve unequal access to information in connection with a procurement, biased ground rules in a procurement, or impaired objectivity in performing work for the customer. The Company is required to report suspected OCIs to the customer, so it is important that you promptly inform your supervisor if you encounter or become aware of a possible Organizational Conflict of Interest.

Antitrust and Restraint of Trade

You may not engage representatives from other companies in any discussion that constitutes restraint of trade. Generally, anti-trust laws prohibit agreements that tend to fix or control prices; to boycott specified suppliers or customers; or to allocate products, territories, or markets. Should you be in a meeting where a representative from another company begins to discuss prohibited topics, you should ask for the discussion to stop; if such discussion is not stopped, you should leave the meeting.

Government Property

The Company is directly responsible, accountable, and liable for all Government Property (GP) in our possession or under our control. This includes GP in the possession or under the control of a Subcontractor. Additionally, the Company has established and maintains a system to control, protect, preserve, and maintain all GP. To the extent that you work with GP, you are expected to understand and comply with all policies and procedures covering Government Property. Compliance with GP policies and procedures helps ensure SRC's Government Property system is operating in accordance with government regulations.

Complete and Accurate Books, Records and Communications

All Company communications, books, accounts, records, contracts, and financial information are to be maintained and reported accurately and honestly, and in accordance with standards that follow Generally Accepted Accounting Principles (GAAP) and procedures as defined by the U.S. Government. If you are responsible for preparing and approving such records, you are accountable for the accuracy of all representations made. Company records are to be maintained in accordance with Company Policy.

Recovery of Costs

Our reputation of honesty and integrity depends on the trust others have in us, which depends in large part on the accuracy of our billing, estimating, and financial reporting processes. Only costs that are allowable and allocable to a project under law and the applicable Federal Acquisition Regulations may be charged to the government. You are responsible for ensuring all costs (e.g., labor, travel, materials, or other expenses) are reported truthfully and accurately to the appropriate account, regardless of budget status.

Export Controls and International Business Practices

Export Controls. You are required to understand and comply with the Export Compliance Policy and the applicable laws and regulations regarding export and reexport of U.S. manufactured products, services, and technology. Under no circumstances will any situation, transaction, or exchange be made contrary to the U.S. export regulations. If you have any questions regarding the Export Control Policy or related regulations, or about how to handle an export related event, contact the Export Compliance Manager. If you become aware of a possible violation of the Export Control Policy or any U.S. export control regulation, you should report the situation to your supervisor and the Export Compliance Manager.

International Business Practices. The Foreign Corrupt Practices Act prohibits payment to foreign officials or their representatives to influence an official act or decision. Indirect payments in the form of commissions or fees to foreign agents or consultants of the Company who pass money on to foreign officials or their representatives also are prohibited. Any questions regarding these matters should be directed to the Export Compliance Manager, the Director of Contracts, or the General Counsel. Before entering into any business arrangement with a foreign government, entity, or person, or with a domestic entity or person who will be marketing the Company's products or services to a foreign entity or person, you should contact the Export Control Manager, the Director of Contracts, or the General Counsel for guidance.

Government Relations and Lobbying

The Company's Lobbying Policy recognizes that the Company may engage in certain lobbying activities, but that the use of federal funds for lobbying activities is prohibited. As a result, your time and related expenses spent on lobbying activities are not allowable charges and must be charged to an unallowable charge number for lobbying activities. Lobbying includes communications with certain covered officials in the Executive and Legislative Branches of government, and also includes activities that are intended at the time they are performed to be in support of lobbying activities. If you are involved in marketing the Company's products and services to the government, or if you support the Company's marketing activities, you should be familiar with the Lobbying Policy. If you have any questions regarding whether certain activities involve lobbying, contact the Vice President, Business Development and Government Affairs, the Manager of Government Affairs, or the General Counsel.

Political Expenditures and Contributions

As a tax-exempt not-for-profit corporation, the Company is prohibited from making, or causing others to make, contributions to any political candidate, party, or campaign. No Company assets, including employee work time, may be contributed to any political candidate, party, or campaign. These restrictions on the Company's involvement in the political process are not intended to inhibit you from participating in that process on your own time, including making personal campaign contributions to a candidate or political party and expressing your personal views on legislation to your elected governmental representatives, as long as these personal actions could not be interpreted as representing the Company in any way. Accordingly, your personal campaign contributions may not be reimbursed, directly or indirectly, by the Company.

Media Relations

All media inquiries are to be forwarded to the Director, Corporate Communications and Public Relations, who will coordinate an appropriate response by the Company.

Emergency Evacuation

You have individual responsibility to ensure any emergency evacuation is timely and organized. You should know the location of your primary and secondary emergency exits and available fire-fighting equipment. Unless you are designated an Emergency Response Team Member, you are expected to immediately evacuate the building via the nearest emergency exit.

You and Your Job at SRC

Time and Expense Reporting

You are required to record your time and expenses truthfully, accurately, and on a timely basis to the proper project accounts. The integrity of time and expense reports that you prepare and submit directly affects the accuracy of the data accumulated under our contracts. Both you and your supervisor are responsible for ensuring that your time and expenses are charged properly. Misrepresenting facts or falsifying records will not be tolerated.

Proper Conduct in the Work Place

Alcohol and Drug Free Workplace/Workforce. The Company is committed to protecting the safety, health and well-being of all employees and other individuals in our workplace. We recognize that alcohol abuse and drug use pose a significant threat to our goals. We have established an alcohol and drug-free workplace program that balances our respect for individuals with the need to maintain an alcohol and drug-free environment.

Workplace Violence. It is the Company's policy to provide a workplace free from violence, harassment, or threats. It is your responsibility to help make the Company a safe place to work. You are expected to treat all other employees, as well as visitors, with dignity and respect. Threats, threatening behavior, or acts of violence by anyone on Company premises are prohibited and will not be tolerated. You are not permitted to bring into the workplace any weapon or dangerous instrument or substance. You are prohibited from using, attempting to use, or threatening to use any weapon, dangerous instrument, or substance to harm another person.

Harassment and Non-Discrimination. The Company is committed to maintaining a work environment free from harassment, sexual harassment, and discrimination based on race, national origin, color, disability, religion, age, sex, pregnancy, status as a Vietnam-era or special disabled veteran, or any other category protected by law. If you believe you are being harassed, sexually harassed, or discriminated against in any manner prohibited by this policy, or if you are aware that another individual is experiencing sexual harassment, harassment, or discrimination, you should report the situation immediately. You should bring your concerns to the attention of the Human Resources Department or any member of management.

Security

The Company has entered into a Security Agreement with the U.S. Department of Defense that allows us to have access to sensitive information or material (classified or unclassified) that requires safeguarding because of its importance to national defense. Many of our programs and activities are vital parts of the defense and security systems of the United States. You are responsible for properly safeguarding the information and material entrusted to your care. You should be familiar with the Security Policy and the security procedures for your location, and you should contact the Facility Security Officer for your location with any questions.

Personal Information

The Company is entrusted with a variety of personal information from employees and others. You are not permitted to access such information unless you have a legitimate need to know the information for business purposes and have been authorized to access the information. You may never use such information for any other purpose. If you are authorized to access personal information, you may not disclose it to anyone (inside or outside the Company) without proper authorization. If you collect, process, or have access to personal information on behalf of the Company, you are responsible for understanding and complying with Company Policy and all applicable laws and regulations that govern your activities. You must also keep personal information secure and protected in accordance with Company Policy, third party agreements, and applicable laws and regulations. If you believe or become aware that personal information has been gathered in violation of Company Policy or the law, or that personal information has been improperly accessed or disclosed, you should immediately contact your HR Manager, the Privacy Officer, or General Counsel.

Intellectual Property, Proprietary Information, and Classified Information

Intellectual Property. Consistent with the scientific research and development purpose of the Company, inventions and innovations that you conceive and/or develop are essential to the ongoing success and growth of the Company. Inappropriate or premature disclosure or publication of inventions outside the Company may jeopardize our ability to protect and leverage the invention. You should use the Invention Disclosure Form to identify inventions that result from your work.

Proprietary Information. You are also required to safeguard the Company's proprietary information, disclosing it to others within the Company only on a need-to-know basis, and to those outside the Company only after (1) management review and approval, and (2) appropriate safeguards have been implemented (e.g., Nondisclosure Agreement). The same requirements also apply to protecting proprietary information entrusted to the Company by a third party. We are required to certify, for most procurements, that we did not solicit or obtain a competitor's proprietary information or the government's source selection information. You may not seek or accept, directly or indirectly, proprietary or source selection information regarding any government procurement. Following contract award, such information may be sought through request made directly to the government, such as a request under the Freedom of Information Act.

Classified Information. You are required to protect classified information in accordance with all applicable government security regulations.

Use of Company Resources

The Company prohibits the improper use of Company or customer assets, including technology and intellectual property, software, computers, communication equipment, or office supplies. Responsible personal use of the Internet, computers, and copying equipment, in accordance with applicable Company policy, is allowed.

How to Address Ethical Issues

From time to time, you will encounter work situations that challenge your judgment and raise a variety of ethical and legal questions. In those situations, refer to the Ethics Policy, these Standards of Business Conduct, and the applicable Company Policies to evaluate and respond in a manner that meets the Company's ethical standards and legal requirements. In addition, you should involve your supervisor and HR Manager in deciding how to address such situations. The Ethics Officer is always available for consultation on ethics issues.

How to Address Legal and Regulatory Issues

Because many of the Company's policies and the Standards of Business Conduct involve legal considerations, you should seek the advice of your Contracts Manager, the Director of Contracts and/or the General Counsel when dealing with risk areas that appear to implicate the law or regulations.

Reporting Suspected Misconduct

You are responsible for ensuring that your conduct, as well as the conduct of those who report to you, complies with Company Policies, including the Ethics Policy and these Standards of Business Conduct. In addition, you are encouraged to report suspected violations to the Company. You should report suspected violations to your immediate supervisor, your HR Manager, the Compliance Director, the General Counsel, or to any other member of management. You will not be subject to disciplinary action or any form of retribution for the good faith reporting of suspected violations of Company policy. An employee Whistleblower Hotline 888-883-1499 has also been established for submitting anonymous or confidential complaints or concerns that could have a large impact on the Company, such as actions that: (1) may lead to incorrect financial reporting; (2) are unlawful; (3) are not in accordance with the Ethics Policy and the Standards of Business Conduct; or (4) otherwise amount to serious improper conduct.

Cooperating With Internal and External Reviews

You are required to fully cooperate with any and all internal and authorized external reviews of suspected violations of Company policy.

On Your Own Time

Personal Conflicts of Interest

There are many ways in which a conflict between your personal interests and those of the Company may arise. A conflict of interest may arise in any situation that could prevent fair and impartial discharge of job duties, adversely affect on-the-job performance, or result in an improper gain or advantage for an employee or third party. Conflicts of interest must be avoided whenever possible. Therefore, you should take care to avoid even the appearance of a conflict between the interests of the Company and your own personal interests or the interests of a related party. You are required to report all outside employment, as well as other situations that may constitute a personal conflict of interest, to your HR Manager and to obtain the approval of the Company for such outside employment or other situation.

Community Involvement

You are encouraged to participate in community organizations and activities. You should be alert, however, to possible conflicts of interest if you seek or hold public office or serve on commissions or advisory groups. Contact your HR Manager or the Ethics Officer with any questions regarding such outside activities.