code of ethical business conduct...effective december 1, 2009 code of ethical business conduct page...

A Message from Timothy J. Whall Protection 1 is committed to providing our customers with world-class quality of service while operating with the highest level of honesty and integrity in all aspects of our business. For more than 22 years our Company has been a recognized leader in the security industry, providing unparalleled service to more than a million homes and businesses and more than 800,000 wholesale sites nationwide. Because of our image, people entrust the security and safety of their home, family and business to us. As employees representing Protection 1, each of us is responsible for protecting and maintaining our Company’s reputation and national branding by adhering to the high ethical standards set forth in our Code of Conduct. The standards and principles listed in our Code address two areas that are absolutely crucial to our success: ethical conduct and compliance with all applicable laws and rules and regulations. Qualities such as respect, honesty, trust and integrity are the hallmarks of ethical behavior. These qualities should always form the framework for conducting all business at Protection 1. Our Code is an operating guide that applies to all employees, officers and directors. By reading and familiarizing yourself with our Code, I hope that you will gain a greater understanding of the importance of our commitment to ethical and legal practices. I also hope that you will uphold the principles this Code contains. Our Code cannot anticipate every ethical dilemma or set forth a plan of action that will fit all situations. Instead, it represents a set of values and standards designed to guide you in your daily responsibilities and help you make ethical decisions. Our company, which was founded on honesty and integrity, is more than a legal entity or words on a corporate charter—it is a family. Thank you for working together and in accordance with our Code, policies and procedures, as well as applicable laws, rules and regulations. Together, we will maintain Protection 1’s reputation, and ensure our success as a business. Sincerely,

Timothy J. Whall President and Chief Executive Officer

Code of Ethical Business Conduct

Effective December 1, 2009 Code of Ethical Business Conduct of 21 Updated: June 4, 2010 Updated: May 29, 2011

Table of Contents

A Message from Timothy J. Whall ................................................................................................... 1

Table of Contents ............................................................................................................................ 2

Putting Our Code Into Practice ........................................................................................................ 3

Following Our Code ............................................................................................................................................. 3

Your Obligation to Speak Up! .............................................................................................................................. 3

Non-Retaliation Policy ......................................................................................................................................... 5

Compliance with Laws, Rules and Regulations .................................................................................................. 5

Violations and Discipline ..................................................................................................................................... 5

Additional Responsibilities of Leaders ................................................................................................................ 6

Commitment to Each Other ............................................................................................................ 7

Diversity in the Workplace ................................................................................................................................... 7

Harassment-Free Workplace .............................................................................................................................. 7

Safe and Healthy Workplace ............................................................................................................................... 7

Protecting Employee Information ........................................................................................................................ 8

Post-Employment Restrictions ............................................................................................................................ 8

Commitment to Our Customers and Vendors .................................................................................. 9

Avoiding Conflicts of Interest ............................................................................................................................... 9

Insider Trading .................................................................................................................................................. 10

Antitrust and Fair Competition ........................................................................................................................... 12

Cooperating with Government Investigations ................................................................................................... 13

Protecting Customer Information ...................................................................................................................... 13

Commitment to Our Shareholders ................................................................................................. 13

Keeping Accurate Records ................................................................................................................................ 14

Preventing Fraud ............................................................................................................................................... 14

Cooperating with Audits .................................................................................................................................... 15

Managing Records ............................................................................................................................................ 15

Safeguarding Company Assets ......................................................................................................................... 15

Commitment to Our Community ................................................................................................... 19

Interacting with the Public ................................................................................................................................. 19

Social Networking Guidelines............................................................................................................................ 19

Taking Part in Political Activities ....................................................................................................................... 20

Protection 1 Policies and Procedures ............................................................................................. 20


Putting Our Code Into Practice

Because Protection 1 is dedicated to acting in the best interests of its employees, customers and business partners, each of us must act and conduct our business dealings with honesty, integrity and fairness. We believe this is the only way to do business.

Following Our Code

Acknowledgement of and compliance with our Code of Ethical Business Conduct (Code) is a condition of employment. This means that everyone at Protection 1—including employees, officers, directors, managers, supervisors and non-management personnel, whether full time or part time— is expected to understand and comply with the information set forth in this Code, as well as related Company policies and procedures. And, while our Code is designed to apply to Company employees, Protection 1 expects everyone who works on its behalf, as well as those with whom it does business, to embrace the spirit of our Code. As Protection 1 employees, each of us must:

Read and understand our Code;

Comply with both the letter and spirit of our Code;

Act ethically and lawfully wherever we are, under all circumstances; and

Never engage in conduct that could damage our Company’s reputation. Because it may not always be clear what the right action or answer is, we must exercise caution when conducting our business affairs. If you ever have a question about how to respond to an ethical issue, seek assistance. Do not ignore your instincts—remember that you are responsible for your own conduct.

Your Obligation to Speak Up!

If you suspect or know that anyone who works on our Company’s behalf or anyone with whom our Company does business has violated or intends to violate our Code, policies or procedures, or any applicable law, rule or regulation, you must Speak Up! “Speak Up!” means you have an obligation to report this suspicion or belief to your immediate supervisor. It also means that reporting is encouraged, as it helps maintain our Company’s reputation for integrity and uphold our ethical standards. If you are unable or unwilling to contact your immediate supervisor, you must contact the individual or group designated to address the issue below, in “Where To Go For Help.” Protection 1 can then assess the situation and take the steps necessary to correct the problem. Remember that a prompt report can substantially reduce any adverse consequences to you, our Company and any third parties. Every effort will be made to safeguard your confidentiality, and Protection 1 strictly prohibits acts of retaliation against any person for reporting a possible violation in good faith.

Q: Nicolas, a Protection 1 salesperson, thinks he may have violated our Code, but he didn’t mean to. Should he report himself? A: Yes, Nicolas has an obligation to report anyone in violation of our Code, including himself. Protection 1 must take appropriate action in all cases, but if any discipline is necessary, the fact that Nicolas spoke up will be given consideration when determining whether disciplinary action is necessary.


Q: Amelia, who works in the call center, thinks that her coworker did something illegal, but she can’t prove it. Should she report her coworker? A: Yes. Our Code requires Amelia to report all suspected violations—it’s not necessary that she be absolutely certain a violation was committed. She has an obligation to Speak Up! about her suspicions immediately so that our Company can minimize any negative effects her coworker’s conduct may have.

Where to Go for Help

Protection 1 places great value on each of us taking an active role in safeguarding our Company’s integrity and reputation. When reporting questions, concerns, or suspected or known violations, you should first speak to your immediate supervisor. In situations where you are unable or unwilling to speak to your supervisor, you may contact the individuals or departments identified below.

Type of Matter Contact Phone Number

Benefits Matters Benefits Department (888) 767-7448 #1

Personnel Matters Human Resources Department

Cypress Call Center – (866) 639-6222

Wichita Call Center – (316) 352-2711

Irving Call Center – (214) 277-0116

Manasquan Call Center – (877) 777-1113

Longwood Call Center – (800) 749-3824

All other locations – (888) 767-7448

Employee Information Human Resources Department (888) 767-7448

Conflicts of Interest Legal Department

General Counsel (972) 916-6154

Criminal or Other Liability Matters Legal Department


Fraud or Irregularities in Financial Transactions or Related to Financial

Reporting

Audit and Risk Services

Director, Corp Finance & Audit (785) 856-9373

Matters relating to Federal, State and Local Laws, Rules and Regulations (excluding

Personnel Matters)

Corporate Tax and Compliance

Director Tax (785) 856-9725

Any matter that you cannot or prefer not to address with your immediate supervisor or

any of the contacts designated above EthicsPoint

(800) 963-5961

or

http://www.ethicspoint.com

EthicsPoint Options

Protection 1 strives to ensure that we each have a reliable avenue to safely and honestly Speak Up! and report known or suspected Code violations while maintaining anonymity and confidentiality. Consistent with this goal, our Company has retained EthicsPoint, an outside company to whom Protection 1 employees can report known or suspected ethical violations. You may submit a report to EthicsPoint by calling the Integrity Hotline or accessing the online tool. Both options are available 24 hours a day, 365 days a year. All calls to the Integrity Hotline are answered by trained specialists who are qualified to handle a variety of situations and reports. The online tool provides a user-friendly, globally accessible and secure web-based option. Whether you contact the hotline or use the online tool, all reports submitted to EthicsPoint may be made anonymously—our Company has no way of knowing the identity of persons making anonymous reports. However, be aware that an anonymous report may limit


the company’s ability to investigate your concerns. Should you choose to follow up about an anonymous report, EthicsPoint will facilitate your request.

Integrity Hotline Online Tool

(800) 963-5961 http://www.ethicspoint.com

Non-Retaliation Policy

Rest assured that you will not be retaliated against for seeking guidance or making a report in “good faith,” meaning that you have provided all of the information you have and you believe it to be true. No one who suspects or knows of a violation and reports it in good faith will be subject to retaliation. In addition, Protection 1 strictly prohibits retaliation against any employee who assists or participates in an investigation involving possible violations of this Code or other company policies. We each have an obligation to comply with any investigation and share information openly and honestly.

Q: David, a Protection 1 installer, made a report about his immediate supervisor through the Integrity Hotline. He’s worried that his supervisor will treat him differently now. How can David be sure his report won’t affect his job negatively?

A: David should not fear retaliation. Our Company forbids leaders from taking any retaliatory action, and expects leaders to protect their employees from such action and look for any signs that such action may be occurring. Leaders who violate this important policy are subject to discipline, regardless of their position. Q: Sheila’s supervisor asked her to do something she thinks is unlawful. If she speaks up and our Company decides her supervisor’s conduct wasn’t wrong, will Sheila be disciplined? A: No. Sheila is making the report in good faith, so even if her belief proves to be unfounded, her report will not lead to discipline so long as she cooperates with the investigation when and as requested.

Compliance with Laws, Rules and Regulations

Protection 1 recognizes that compliance with laws, rules and regulations is critical to our Company’s mission. Anytime we are acting on Protection 1’s behalf, whether inside or outside the workplace, we must always comply with the letter and intent of all applicable laws, rules and regulations, and act in a principled and ethical manner. Our Company expects each of us to take an active role in this area. Violations of applicable laws, rules and regulations potentially expose our Company—and each of us personally—to monetary penalties, loss of business, reputational damage, loss of shareholder value, and civil and criminal charges. We all have a responsibility to learn the laws, rules and regulations that relate to our job responsibilities and understand how they apply to our work. In addition, we must ask questions and get clarification on the impact of applicable laws, rules and regulations prior to acting.

Violations and Discipline

Protection 1 will not condone unethical or unlawful conduct. There is no business or financial purpose—no matter how noble or profitable it seems—that justifies such behavior. And remember, we must avoid even the mere appearance of unethical or unlawful conduct, as it can be just as damaging to our Company. All reports will be appropriately investigated. If you fail to comply with our Code or any applicable law, rule or regulation, you will be subject to disciplinary action. Disciplinary action may include, alone or in combination: verbal or written corrective action, demotion, loss of merit increase and/or bonus, suspension, termination


and a report to the legal authorities. The type and severity of discipline will vary depending on the circumstances, and it will be applied in a manner that is consistent with our Company’s policies and procedures, as well as applicable laws, rules and regulations. In addition, anyone who violates applicable laws, rules or regulations may be subject to criminal or civil penalties, which may include the payment of civil damages to our Company or third parties.

Additional Responsibilities of Leaders

Leaders, by virtue of their positions of authority, must be ethical role models, exemplify our Company’s values and exhibit the highest standards of integrity. To uphold our values, as a leader you must:

Take an active role in researching and complying with all applicable laws, rules and regulations;

Educate employees on the meaning of applicable laws, rules and regulations and their effect on work activities;

Communicate the seriousness of our commitment to ethics to other employees and leaders;

Monitor employees’ work activities for ongoing compliance;

Provide appropriate incentives to employees to ensure compliance;

Avoid even the appearance of approving unlawful, unethical or potentially damaging conduct;

Be available to anyone who seeks assistance with reporting a suspected or known violation;

Promptly address all situations that may be unlawful, unethical or potentially damaging to our Company’s reputation;

Report all suspected or known violations, including intentions to violate, that are reported to you or that you come to suspect or know of;

Enforce our Code through appropriate disciplinary measures; and

Review Protection 1’s compliance risk and the effectiveness of the procedures in place to mitigate that risk.

For purposes of our Code, “leaders” means officers, directors, managers, supervisors and any other employee who has authority to make any significant changes in employment status (i.e., hiring, firing, promotion, demotion, work assignment, compensation decisions, etc.).


Commitment to Each Other

Protection 1 is committed to promoting a positive workplace where dignity is preserved, diversity is embraced and unethical or unlawful conduct is prohibited. In order to maintain the quality of work environment and community we each expect, as well as the service our customers desire, integrity and respect must be reflected in all that we do. We are responsible for treating each other appropriately and holding each other and ourselves accountable for our actions.

Diversity in the Workplace

Protection 1 is committed to diversity and equal employment opportunity. Protection 1 does not tolerate acts of discrimination and instead makes all employment decisions based upon merit, without regard to any protected characteristic, such as race, color, gender, age, sexual orientation, national origin, disability, religion or veteran/military status. We must all fully support this commitment and recognize that a diverse group of people—with various backgrounds, experiences and skills—enriches our Company and the communities in which we live and work and is critical to our success.

Harassment-Free Workplace

Protection 1 is committed to maintaining a workplace that is free from harassment. Harassment includes physical actions and verbal remarks—whether in person or by any other means—that create an intimidating, hostile or offensive work environment (i.e., offensive remarks, slurs, jokes or disparaging comments). Sexual harassment involves unwelcome sexual advances, requests for sexual favors, or other physical or verbal conduct of a sexual nature. Protection 1 will not tolerate harassment of any kind. Our Company will protect those making reports of harassing behavior against any type of retaliation.

Q: Ryan asked his coworker out on a date, but she declined. Can asking her again be sexual harassment? A: Yes. Follow the "one strike and you're out" rule. If you ask a coworker out, and he or she says no, don't ask again. Repeated requests may constitute harassment, while a single, polite request probably won’t. Q: Greg, a coworker, often tells jokes and makes comments that offend me. I know I’m not the only one who is uncomfortable with his behavior. My immediate supervisor knows about it, but has done nothing to stop it. What should I do? A: It is appropriate for you to tell Greg that his comments offend you and ask him to stop making them. If you don’t want to talk to your coworker or supervisor about Greg’s behavior, you should Speak Up!

Safe and Healthy Workplace

Protection 1 values a work environment free of alcohol or drug use, as well as threatening behavior or violence. Protection 1 prohibits possessing, using or being under the influence of alcohol, illegal drugs or controlled substances in the workplace or during working hours. You may not even engage in this behavior when you are off-duty if this usage could impair or impede your ability to do your job, or if it could affect our Company’s reputation or legitimate business interests.


Additionally, intimidating or threatening behavior and comments, even if meant in a joking manner, are prohibited. Any violent actions or threats of violence are prohibited and in violation of this Code.

Q: Jane, a Company salesperson, believes a coworker uses drugs. While Jane doesn’t think he uses them at the office, she thinks he has been under the influence while at work. Should she report her suspicions? A: Yes. Not only is drug use illegal, it poses a serious risk to our business and the safety of our employees and customers if he is under the influence while at work. Anything that an employee does that poses these risks, no matter where he or she does it, should be a concern to everyone and should be reported.

Protecting Employee Information

Protection 1 is fully committed to protecting the privacy, confidentiality and security of employee medical and personnel records. Our Company recognizes the trust we each place in it to properly manage and use this information. Only authorized employees with a legitimate Company business purpose may access or use the medical or personnel records of another employee. If you are a leader, you must respect and maintain the confidential information you learn about your employees and colleagues (e.g., salaries, performance reviews, disabilities or leaves of absence). You must not share this information with anyone, either inside or outside your department, except when necessary and in connection with a legitimate business purpose.

Post-Employment Restrictions

Each of us, as Protection 1 employees, acknowledge and agree that after our employment with Protection 1 ends, we will continue to strictly adhere to the rules set forth in this Section, as well as related Company policies and procedures. Within 90 days prior to you leaving, and for a twelve (12) month period commencing on the termination of your employment with our Company, you must not, directly or indirectly, solicit or accept any business from any person, business or entity that is or was a customer of our Company or was solicited for any contract or business relationship with our Company. In addition, you must not solicit any other employee to leave our Company’s employ or hire any employee to work directly or indirectly for or with you and/or any future employer that you may have for one year after you leave our Company.

These provisions are limited geographically to those markets in which our Company competes for customer accounts.


Commitment to Our Customers and Vendors

Protection 1 is committed to upholding its ethical standards in order to honorably and effectively serve its customers and vendors. These groups place their trust in us every day, and it is up to each of us to bring them the results they expect by doing the right thing, all the time.

Avoiding Conflicts of Interest

We each must avoid putting ourselves in situations where our interests interfere with our responsibilities to Protection 1. Even the appearance of a conflict of interest can be damaging to the Company’s reputation, as well as yours. A “conflict of interest” exists when a personal or family interest conflicts with our ability to act in the best interest of Protection 1. You must avoid any such situation that could compromise the trust placed in you. If a conflict of interest arises, your integrity will likely come into question and that may reflect negatively on or damage our Company’s reputation. We are all responsible for advancing Protection 1’s business interests to the best of our abilities. Therefore, you must not take for yourself any opportunity that you discover in the course of your employment, your representation of our Company or your use of Company property and resources. The only exception to this is when the opportunity has been offered to Protection 1 and Protection 1 informs you that it will not pursue it. You should never compete with Protection 1.

Outside Employment, Activities and Opportunities

Protection 1 encourages each of us to take part in outside activities, opportunities and employment, as long as this participation does not create a conflict of interest. While it is not possible to address every situation in which a conflict of interest may arise, the following are common trouble areas:

You or someone close to you works for or on behalf of a company that Protection 1 does business with or competes with;

You or someone close to you personally profits or benefits due to your position at Protection 1;

You have authority to make decisions about the employment status of someone close to you;

You take personal advantage of an opportunity that you learn of in the course of your employment with Protection 1; or

You engage in outside activities that: o Interfere with your ability to act in Protection 1’s best interests; o Interfere with your ability to perform your Protection 1 job responsibilities; or o Damage or misuse Protection 1’s reputation, relationships or property, including proprietary

information and trademarks.

Outside directorships must be closely scrutinized to avoid any conflict of interest (or the appearance of one) and any violation of federal antitrust or other applicable laws. If another business asks you to serve as a director, you must consult with our Legal Department before accepting the position.

Q: I would like to take a part-time job for extra money during the holidays. Is this okay? A: Yes, so long as the second job is not with a Protection 1 competitor or vendor. You must also remember that your first responsibility is to our Company, so the second job must not interfere with your ability to fulfill your responsibilities to Protection 1.


Q: Chris is involved in selecting Protection 1 vendors. His cousin is a partner in a reputable company and wants to be a Protection 1 vendor. Chris has already disclosed the relationship to his immediate supervisor. Is this a conflict of interest? A: No, because Chris disclosed the details of the relationship. However, he can’t be involved in any decisions during the selection process. If our Company does use his cousin’s business as a vendor, Chris cannot supervise the work his cousin performs, or process or approve any payments to the company.

Gifts and Entertainment

Protection 1 recognizes that giving and accepting business courtesies can be an important part of building and maintaining business relationships. However, we may only give or accept business courtesies if this exchange furthers our Company’s legitimate business interests and is ethical and legal. A “business courtesy” is anything of value, such as gifts or entertainment, given to show thanks or foster a good working relationship. In order to avoid a conflict of interest, or the appearance of one, you must:

Only give and accept unsolicited business courtesies that are infrequent in nature and similar to those Protection 1 might accept or give in the normal course of business;

Maintain a written record of all business courtesies given and accepted; and

Get your immediate supervisor’s approval prior to accepting a business courtesy of excessive, significant or unique value.

You must not solicit, give or accept business courtesies if it is possible that doing so could be interpreted as:

Intending to influence a business decision;

Engaging in bribery;

Consideration for a business favor; or

Knowingly violating Company policies or procedures or those of the other person or company.

Various laws and regulations strictly limit the giving and receiving of business courtesies when conducting business with government officials. Contact our Legal Department before giving or receiving gifts or entertainment from any government official.

Q: How do I know when a business courtesy is excessive, significant or unique? A: Exercise good judgment. Your instincts usually will tell you when a gift is excessive, significant or unique. Ask yourself three things: Is the gift significant to you personally? Would it appear significant to others? Is it hard to come by? If you’re still unsure, ask your immediate supervisor. Q: Lisa, a Protection 1 salesperson, recently received two tickets to a sold-out, championship football game from a client. The accompanying note reads, "Thanks for your business over the year. Enjoy!" Can she accept them? A: Accepting tickets to an ordinary football game would be okay—they constitute “reasonable business entertainment.” However, Lisa should not accept this gift because tickets that are hard to come by are likely to be much more expensive, and therefore go well beyond that standard. If you have any questions about the appropriateness of a gift, please ask Human Resources.

Insider Trading

As a Protection 1 employee, you may have access to or come into contact with material, nonpublic information, known as “inside” information. Inside information is information that has not been disclosed to the general public and that could, if known, affect an investor’s decision to trade. Inside information includes information about our Company, as well as information about other companies that you learn about through your work at Protection 1.


Common examples of inside information include advance notice of acquisitions and divestitures, management changes, or certain nonpublic financial results and projections. An “insider” is any person who has learned of material, nonpublic information from a Protection 1 employee. Insiders could include coworkers, lawyers, brokers, family members or friends. Trading securities while in possession of inside information, or making an investment decision based upon such information, constitutes “insider trading.” Insider trading is illegal and in violation of our Code. The rules against insider trading apply to all employees. Passing inside information on to anyone else who makes a trade based on the information is considered “tipping,” and is also illegal. Tipping is a violation of our Code, even in situations where you do not personally trade. This prohibition applies to stocks, shares, options, debt securities and any other securities, as well as to transfers into or out of our Company stock fund under a savings or retirement plan. Tipping can subject you to significant fines and even imprisonment. As a Protection 1 employee, you must not:

Trade any Company securities while in possession of inside information, whether you are trading on behalf of yourself, Protection 1 or anyone else;

Trade securities in a way that attempts, or appears to attempt, to hide your identity; or

Acquire a short position in our Company’s securities for any reason other than to hedge a corresponding long position in the security.

You may disclose our company’s inside information to a person if and only if that person has a legitimate business-related need to know the information, that person knows that it is inside information, and you believe the person will not misuse the information. If our Company designates you as a covered person under the Insider Trading Policy, you must not engage in any trades of our Company’s securities during trading blackout dates. Our Legal Department will communicate trading blackout dates to covered persons. In order to ensure compliance with technical reporting and disclosure requirements of various federal laws, rules and regulations, Protection 1 has adopted Pre-Trading Clearance, Broker Interface and Certification procedures. If you are subject to these procedures, as determined by our General Counsel, our Legal Department will provide you with the appropriate procedures and requirements. Strict adherence to these procedures and requirements is vital.

Q: Jeff, who works in a call center, heard through the grapevine that Protection 1 plans to buy a large company. Can he trade in our Company’s or the other company’s securities after learning this? A: No. The fact that Jeff was not specifically given this inside information at work or for work purposes doesn’t matter. The prohibition against insider trading applies to any material, nonpublic information you obtain, regardless of how you obtain it. Q: Serena, a Protection 1 salesperson who frequently works with vendors, learns that a large vendor is having serious financial problems that haven’t been publicly announced. Her sister owns stock in the vendor and Serena wants to warn her so she doesn’t lose money. Can she tell her sister? A: No. Serena is in possession of inside information about the vender, so she cannot pass it on to anyone else. She also can’t buy, sell or recommend the purchase of the vender’s securities until after the public disclosure of the information. If Serena were to pass on the information, her sister could be found liable for trading while in possession of insider information.


Antitrust and Fair Competition

Protection 1 recognizes the importance of vigorous competition, but it must be fair. Federal and state laws, rules and regulations—usually referred to as antitrust, monopoly or competition laws—are designed to preserve free and open competition. These laws promote a competitive marketplace that provides consumers with high-quality goods and services at fair prices. As Protection 1 employees, we must all compete vigorously. At the same time, we must make it clear to our business partners that we win business based on the quality of our people and services, and not by engaging in unethical or illegal competition. Therefore, we must treat those with whom we do business in an objective, honest and fair manner. With respect to vendors, all Protection 1 employees must:

Make it clear that our Company expects them to compete fairly and vigorously for our business;

Communicate that our vendor selection will be made based solely on merit; and

Never suggest that our decisions depend on a vendor’s use of our goods or services, or that failing to do business with a Protection 1 subsidiary or affiliate could jeopardize business with another Protection 1 subsidiary or affiliate.

With respect to marketing, all Protection 1 employees must:

Be able to substantiate specific claims;

Not label or market products or services in any way that might cause confusion between them and those of our competition;

Not disparage any competitor’s products, services or employees;

Make fair and accurate comparisons between our Company’s products or services and those of our competitors; and

To the maximum extent possible, be able to verify all estimates with objective facts and experience.

When companies compete with each other in one area but work together in another, it may be difficult to tell when their actions can affect competition. When dealing with another company, you must also consider whether it may be or become a Protection 1 competitor. In order to be fair and ethical competitors, we must never:

Make inaccurate or misleading statements about competitors, vendors or customers, or their products or services;

Discuss pricing or pricing policy, costs, marketing or strategic plans, or proprietary or confidential information;

Agree to divide customers, products, territories or markets;

Boycott certain customers, vendors or competitors;

Limit the production or sale of products or product lines; or

Swap leads or territories.

Failure to comply with these laws, rules and regulations can have serious consequences for our Company, including long and expensive investigations, government and private party-initiated lawsuits, substantial fines and reputation-damaging publicity. You must never engage in conduct that these laws, rules and regulations prohibit, and if you ever witness such conduct, you must report it to our Legal Department.


Q: Adrian’s former coworker, who now works for a competitor, told Adrian that industry issues are causing his company to increase its prices. Adrian shares our pricing plans with him, thinking that this will help our Company compete. Was this okay? A: No. Regardless of the circumstances, discussing pricing with competitors violates our Code and, possibly, the law. If the subject is raised, you must end the discussion, even if it seems rude. You must then immediately report it to our Legal Department.

Cooperating with Government Investigations

Protection 1 emphasizes the importance of fully cooperating with government investigations. Appropriate handling of such investigations is very important not only to our Company, but also to each of us as individuals. Failing to cooperate with a government investigation could subject both the Company and non-cooperating employees to serious civil and criminal penalties. As a Protection 1 employee, you must not:

Destroy any records in anticipation of a request for them;

Lie or make misleading statements; or

Attempt to cause another employee or anyone else to fail to provide information or to provide false or misleading information.

If you learn of a government inquiry through a written subpoena or written request for information (i.e., a civil investigative demand), it should be submitted to our Legal Department immediately, before any action is taken or promised.

Protecting Customer Information

As a Protection 1 employee, you are responsible for protecting the privacy, confidentiality and security of customer information that is entrusted to our Company. You must ensure that any customer information you access or request is necessary for your performance in connection with legitimate Company business purposes and that it is kept confidential.

Q: Sarah works for a Protection 1 call center. The local fire marshal contacted her branch requesting records related to a customer whose house burned down. Should she provide the records? A: No. Sarah should explain to the fire marshal that he must make such a request through our Legal Department. She should also advise our Legal Department of the request immediately. Q: Out of curiosity, Shawn accessed a celebrity’s account records on his work computer and shared them with some coworkers. Is this okay? A: No. Customer information is confidential and should not be used, or even accessed, except for legitimate Company business purposes. Accessing or using the information without a business purpose is a violation of our Code and may also be illegal.

Commitment to Our Shareholders

Protection 1 is committed to ensuring that our Company’s accounting and financial records meet the highest standards.


Truthful, accurate and complete records are of vital importance to Protection 1’s reputation and the integrity in the markets where we conduct our business. Our shareholders rely on each of us to provide full, fair, accurate and understandable disclosures in all financial and other reports that we prepare, file or publish.

Keeping Accurate Records

All transactions must be accurately and promptly recorded in order to facilitate full accounting of all of our Company’s assets and liabilities and to supply the data needed for the preparation of the Company’s financial statements. In the preparation of our Company’s records and reports—including time sheets, inventory and sales records and expense reports—our Company relies on you to:

Be careful and truthful in your accounting, recording and reporting practices;

Maintain books, records and accounts using sufficient detail to reflect transactions accurately and fairly;

Record transactions in a timely manner; and

Stay up-to-date with financial reporting regulations related to your job function. If you are involved in the preparation of our Company’s financial statements, you must follow all applicable accepted accounting principles and other accounting standards and prepare our Company’s financial statements in a manner that is consistent with applicable laws, rules and regulations.

If you prepare or maintain books, records and accounts reflecting information provided by others, you must exercise reasonable care to ensure that they do not contain misrepresentative or misleading information.

Preventing Fraud

As Protection 1 employees, we must recognize that fraud, or the appearance of it, compromises the integrity of our Company’s financial reporting system and property. In addition, fraud damages our Company’s reputation, market value and our ability to achieve our Company’s objectives and our shareholders’ expectations. “Fraud” is a broad concept that refers generally to any intentional act committed to secure an unfair or unlawful gain. It is important that all Protection 1 employees understand what constitutes fraud and refrain from engaging in fraudulent activity, or any activity that could appear fraudulent. Here are some examples of fraud:

Inaccurate financial reporting;

Making an entry on Company records or financial statements that is not in accordance with accepted accounting principles and other accounting standards;

Intentional misstatement of price data reported for price index purposes;

Deferring or accelerating the recording of transactions to incorrect periods;

Intentional misstatement of accounting estimates and judgments;

Misappropriation of assets;

Submitting an inaccurate expense report for personal expenses;

Recording time cards improperly and with the intent to defraud;

Tampering with records, including forging or altering checks;

Processing or submitting false or inaccurate invoices; and

Billing a customer prior to the job being completed. Protection 1 designed its internal controls to address fraud risks and ensure the accuracy of our financial reporting. It is your responsibility to perform these controls effectively and consistently. If you witness or learn about any attempt to override these controls, you must report it immediately.


Q: Michael, an installer for Protection 1, put in overtime hours by working through his lunch break. His immediate supervisor told him to record his regular hours on his time sheet, and promised to give Michael some extra time off next week to make up for it. Should Michael do what his supervisor says? A: No. Everyone is responsible for ensuring that all records they create and/or handle are complete and accurate, including time records. Michael should record his time accurately, in accordance with our Company’s policies, and then report his supervisor’s actions. Q. Rosa, a Protection 1 supervisor, and her department have reached their revenue goal for the quarter. Rosa plans to defer recognition of the revenue that is in excess of her department’s goals to the next quarter. This way, they’ll reach their goal for the next quarter, too. Can she do this? A. No. Rosa and her department must recognize all revenue in the period that it is earned it in order to comply with acceptable accounting principles. Q: While reviewing Protection 1’s financial statements, I discovered an error. I overlooked the error because it improved the appearance of our Company’s position. Is this okay? A: No. It is your responsibility to make sure that all Company’s records are full, accurate and truthful. You have an obligation to your coworkers, our customers and our shareholders to submit such records.

Cooperating with Audits

In accordance with legal and regulatory requirements, independent auditors periodically audit Protection 1’s financial statements and internal controls. We must cooperate fully, promptly and truthfully in any audit. This obligation includes, among other things, responding to requests for information, participating in interviews and disclosing all information relating to the subject matter of the audit. It also means not taking any action to coerce, manipulate, mislead or fraudulently induce any auditor or directing anyone else to do so. The same requirements and restrictions apply to the audit and examination activities of regulators and internal auditors.

Managing Records

The destruction, shredding or other alteration of records in order to impede a government investigation, lawsuit, audit or examination is a Code violation and may also be a violation of the law, leading to criminal liability. You must retain all records (including both paper and electronic format) in your custody or control in accordance with the Records Management Policy.

Q: Shawn’s supervisor asked him to shred records and delete emails related to a department project. Is this is a proper request? A: It depends. If Shawn destroys them in the ordinary course of business, and in accordance with our Records Management Policy, it’s okay. But, if they relate to an ongoing, imminent or threatened investigation, lawsuit, audit or examination, Shawn must not destroy them, but report the request.

Safeguarding Company Assets

Protection 1 accumulated its facilities, equipment, materials, property, technology and information through the hard work of many people, all working to better serve our customers. We owe it to ourselves, our customers, our vendors and our shareholders to safeguard all Company property. Subject to certain limited exceptions, our Company owns everything that we create or modify in connection with our jobs, everything that is produced using Company property and everything that relates to Company business. By signing (electronically or otherwise) the acknowledgement and agreement to comply with this Code, we acknowledge that Protection 1 owns all of the property referenced in this Section.


Protection 1 Property

We are entrusted with protecting Protection 1’s property from damage and loss. We are expected to use it efficiently and responsibly, for legitimate Company business purposes, and in a manner that is consistent with our Code. Protection 1 property includes physical assets such as vehicles, tools and machinery, office equipment, inventory, software and computer systems, such as internet and email, and monetary assets. In addition, it also includes intellectual property, such as work product and confidential information. Acts of dishonesty against our Company, or those it does business with, involving theft, destruction or misappropriation of property, or falsification, alteration or substitution of records for the purposes of concealing or aiding such acts, are prohibited. As Protection 1 employees, we must not make personal use of Company property if such use creates any additional cost to our Company, interferes with our ability to perform our job responsibilities, or otherwise violates our Code, Company policies or procedures, or laws, rules or regulations. We also must not allow the use of Company property for illegal activities or purposes or use Company property for personal gain. We are responsible for exercising good judgment when making limited personal use of Company property. While limited personal use of Company e-mail and internet systems is acceptable (unless prohibited by a business unit policy or procedure), be aware that Protection 1 has the right to monitor all activity related to its property, including all internet and e-mail access, without notice. Therefore, we must not expect privacy when using Company communications resources.

Q: Are personal emails I send or receive at work, or those sent or received on my work computer, my private property? A: No. All communications sent or received at work, for work or with Company property belong to Protection 1. This is true even if your emails have no legitimate Company business purpose. Also, sending and receiving emails leaves an electronic trail that Company systems may capture and store—these can be retrieved by our Company for any lawful purpose, at any time. Q: A former Protection 1 employee recently called Janet, a Protection 1 supervisor, and requested that Janet send her a copy of a proposal she worked on before she left our Company. Can Janet send it to her? A: No. The proposal is Company property. Janet may not disclose Company property to anyone outside of our Company, not even to the person who created it, or contributed to or supervised its creation. Q: Rob did not use all the parts from an installation kit because he found a better solution for the customer, but Protection 1 billed the customer for the entire kit. Can Rob keep the unused parts? A: No. Unused parts are Company property and Rob must return all of them to inventory.

Trademarks, Copyrights and Patents

Trademarks, copyrights and patents are Protection 1 property, and we must take as much care to protect this valuable information. “Trademarks” are symbols, words, numbers, pictures, or logos used to identify our Company’s products and distinguish them from those made or sold by others. A “copyright” is a set of exclusive rights to protect the particular form, way or manner in which our Company expresses an idea or information. Copyright laws protect Protection 1’s creative work against unauthorized copying. A “patent” is an exclusive right granted for an invention, which, generally speaking, is a product or a process that provides a new way of doing something or offers a new technical solution to a problem.


Q: Can I obtain or own the trademark, copyright or patent on things I create as a Company employee? A: No. Unless you have a written arrangement with Protection 1, which is signed by a Company officer, everything you create on Company time or using Company property belongs to Protection 1.

Intellectual Property

Intellectual Property refers to creations of the mind that laws, rules, regulations and international treaties protect. Intellectual property includes trade secrets, inventions, processes, programs, know-how and other intangible industrial or commercial property, and any application, right or registration relating to it. We must demonstrate accountability by consistently protecting Protection 1’s intellectual property and preventing its improper disclosure to anyone inside or outside of our Company. Additionally, we must always respect the intellectual property rights of third parties. These obligations apply both during and after your employment with Protection 1. When you leave our Company, you must return all Protection 1 intellectual property and all copies of materials in your possession that contain or are related to that intellectual property.

Confidential Information and Trade Secrets

As Protection 1 employees, we may have access to or come into contact with information that has not been disclosed to the general public. All such information, including that which concerns our Company, its business or its employees, is confidential and Protection 1 property. If and when your employment with the Company ends, any documents or materials belonging to the Company in your possession or control must be returned to the Company. The following are common forms of confidential information:

Business plans, strategies, and practices;

Financial and technical data;

Product information, processes, and plans;

Marketing campaigns;

Customer and vendor information and lists;

Existence and terms of contracts;

Pricing data;

Structure and content of computers, software, databases and other systems;

Personal information about any employee, including wage and salary data; and

Any information related to legal advice or legal proceedings.

If the confidential information provides Protection 1 with a competitive or economic advantage over its competitors, it is a “trade secret.” All Protection 1 employees should make sure to safeguard all confidential information and trade secrets by following all security measures and internal controls for your computer system or systems, portable electronic devices, notebook computers and other storage devices. Do not divulge your password or access codes to anyone else, and do not allow others to use your accounts. Additionally, make sure to only use confidential information or trade secret information for legitimate Company business purposes, foregoing disclosure to anyone outside of our Company, unless you are authorized to do so and are informed of the proper steps to take before making the disclosure.


Q: How do I know if something is our Company’s confidential information or a trade secret? A: Treat everything you learn at or about Protection 1 and its business as confidential and a trade secret, unless it’s an indisputable matter of public knowledge. Records and other materials don’t have to be, and won’t necessarily be, marked “trade secret” or “confidential”— but you must still treat them as such.

Protecting Property and Information of Others

Protection 1 is fully committed to protecting the privacy, confidentiality and security of the property and information entrusted to it by others, including companies we do business with, suppliers and other third parties. You may not, nor may you authorize anyone else to, access, disclose or use this property or information, whether inside or outside of our Company, except as authorized by its owner, or as required by law, rules, regulations, or appropriate legal proceedings. Even then, you may do so only in connection with a legitimate Company business purpose. You must retain all such property and information (including electronic records) in your custody or control in accordance with the Records Management Policy.

Q: William, a Protection 1 supervisor, found a great magazine article that he knows his employees would benefit from. Can he copy and distribute the article? A: No. Magazine articles, journals and other periodicals are protected by copyright laws. William must not copy them for broad distribution without first getting a license to do so. He may circulate the actual article to his team, however. Q: I bought software with my own money to use at home. Can I load it onto my Company computer, too? A: No. You must not copy software or bring in software from home, even if you could use if for work-related purposes. Only software properly licensed by the Company is permitted on Company computers.

Gathering Competitor Information

Any information we receive about Protection 1’s competitors must be gathered through ethical and legal means. We must not seek information through improper means or through theft, and we must not misrepresent ourselves, directly or indirectly, in order to obtain confidential competitor information. Both during and after your employment with Protection 1, you must always respect the confidential information of others, including the confidential information of former employers. This means we may not solicit or accept information that would violate any confidentiality obligations, nor may we disclose such information unless authorized to do so. This obligation means Protection 1 employees may not ask, encourage or permit newly hired employees to divulge prior employers’ confidential information.

Q: Patty worked for a Protection 1 competitor before coming to work for the Company. Her supervisor asked her to write a memo outlining everything she knows about her former employer’s business plans and strategies. Should Patty write the memo? A: No. It’s a violation of our Code, and possibly a violation of the law, to reveal, or ask someone else to reveal, confidential information of a former employer or other third party. Patty should not reveal this confidential information, but should report her supervisor’s request to Human Resources.


Commitment to Our Community

Protection 1 values its role in the communities where we conduct business and recognizes that conveying a consistent, lawful, professional and appropriate message is critical to protecting our Company’s reputation and our success.

Interacting with the Public

While we must always cooperate fully and truthfully with Protection 1 in its relationships with third parties, only authorized employees may convey information on our Company’s behalf. Since it is important that we speak to all third parties with one voice, the company has designated specific departments and individuals to make external communications. Consistent with this policy, requests for information should be sent to the appropriate departments listed below if the information is to be communicated outside of Protection 1 and doing so is not part of your routine job responsibilities:

Source Refer To Phone Number

Financial community Finance Department (785) 856-9749

Government or regulatory agency, legal community or investigator

Legal Department


News or trade media Communications Department (785) 856-9350

Information sought about a current or former Protection 1 employee

Human Resources Department (888) 767-7448

In addition, if you intend to communicate any information about Protection 1 to any public audience (i.e., through speeches, presentations, interviews, panel discussions, articles, papers or surveys), you must do the following:

Get approval from your immediate supervisor prior to the public communication;

Provide notice to the Communications Department prior to the public communication; and

Not offer opinions or answer questions beyond your area of expertise.

Social Networking Guidelines

The Protection 1 Conduct Guidelines and laws provide the foundation for Protection 1 employee’s policies and guidelines for blogs and social networking. The same principles and guidelines that apply to Protection 1 employees’ activities in general, apply to Protection 1 employee activities online. This includes all forms of online publishing and discussion, including blogs, wikis, file-sharing, user-generated video and audio, virtual worlds and social networks. Protection 1 fully respects the legal rights of our employees in all the locations in which we operate. In general, what you do on your own time is your affair. However, activities in or outside of work that affect your Protection 1 job performance, the performance of others, or Protection 1's business interests are a proper focus for company policy. Protection 1 sees blogs and other forms of online discourse as primarily a form of communication and relationship among individuals. When the company wishes to communicate publicly as a company – whether

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to the marketplace or to the general public – it has well established means to do so. Only those officially designated by Protection 1 have the authorization to speak on behalf of the company.

As a company, Protection 1 trusts, and expects, our employees to exercise personal responsibility whenever they participate in social networking in their free time. This includes not violating the trust of those with whom they are engaging. Protection 1 employees should not use these networks for covert marketing, selling, or public relations. If and when members of Protection 1's Corporate Communications, Marketing, Sales or other functions engage in advocacy for the company, they will identify themselves as such. Online social networking enables individuals to share their insights, express their opinions and share information within the context of a globally distributed conversation. Each tool and medium has proper and improper uses. While Protection 1 understands that employees may choose to join a global conversation, it is important for a Protection 1 employee who chooses to do so to understand what is recommended, expected and required when they discuss company-related topics. If you have any confusion about whether you ought to publish something online, chances are this Code of Conduct will resolve it. Pay particular attention to what the Code of Conduct has to say about proprietary information, about avoiding misrepresentation and about competing in the field. If, after checking the Code of Conduct, you are still unclear if you should post, it is best to refrain and seek the advice of management or the Marketing department. Unless authorized to use online social media by your supervisor for defined business purposes, personal use of these tools during work hours is prohibited and can result in disciplinary action up to and including termination. An employee’s own electronic media tools, such as smartphones, desktop computers, laptops, and other personal handheld devices may only be used during breaks.

Taking Part in Political Activities

Protection 1 encourages you to be fully engaged in the political process, consistent with your own personal views, convictions and interests. But, because laws, rules and regulations governing political activities and contributions are complex and diverse, you must always do the following:

Make clear that political statements you make are your individual, personal views and not those of Protection 1;

Get approval from your immediate supervisor and our Legal Department before performing political activities on Company time or using any Company property; and

Tell your immediate supervisor when making plans to campaign for or serve in public office. The political process is highly regulated—federal and state laws, rules and regulations generally prohibit corporations from contributing to candidates and political parties. Our Legal Department must approve, in advance, any proposed expenditure of Company funds that anyone could construe as relating to a candidate or political party. Also, you must consult with our Legal Department before engaging in activity that anyone could construe as involving Protection 1 in any federal, state or local political activity.

Protection 1 Policies and Procedures

For your convenience, the following list includes many, but not necessarily all, of Protection 1’s policies and procedures. If you have any questions about any of these or any other policies or procedures not listed here, please seek guidance from your immediate supervisor or our Human Resources Department.


The text and title of all of Protection 1’s policies and procedures are subject to change, from time from time, with or without notice to you. Please refer to the specific policy or procedure for any changes thereto.

Administration

Employee Handbook

Employee Travel Expense Policy

Customer Escalation Policy

Gifts and Employee Awards Tax Policy

Harassment & Discrimination Policy

Tuition Reimbursement Policy

NICET Testing Policy

Legal Review and Contract Administration Policy

Govt Contract Supplement Contract Admin Policy

Insider Trading Policy

Insurance Claims Administration Policy

Work Place Violence

Telemarketing “Do Not Call” Policy

Employment

Americans With Disabilities Policy

Corrective Action Plan Employee Guide

Code of Ethical Conduct

Hiring Policy and Procedures

Oral Drug Testing Procedures

Software Copyright Policy

Internet and Network Access Ethics

Employee Handbook

Drug and Alcohol Abuse Procedures

Drug and Alcohol Abuse Policy

Attendance Policy - Call Centers

Attendance Policy - Branch Offices (2004)

Military Leave of Absence

Employee Confidentiality Agreement

Dress Code Policy- Call Centers

Wichita Security and Building Access Policy

Service Award Policy

Relocation Policy

PTO Donation Policy and Donator form

PTO Donation Policy and PTO Recipient form

HIPAA Policies

Notice of Privacy Practices

Uses and Disclosures

Uses and Disclosures - Minors

Workforce Training

Safeguarding PHI

Maintenance & Distribution of Notice of Privacy Practices

Plan Participant Request for Restriction & Alternate Means of Communication

Plan Participant Access to PHI

Complaints & Grievance Process

Accounting of Disclosures

Workforce Access to PHI

Plan Participant Correction or Amendment of PHI

Business Associates

Fleet Management Safety

Employee Safety Manual

Driver Safety Manual

Motor Vehicle Point System

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