Antitrust Policy

Purpose

The purpose of this Antitrust Policy (the “Policy”) is to help SPNA’s directors, officers, and employees (“SPNA Personnel”) recognize and deal appropriately with antitrust and competition issues, identify when they need to seek advice, and know how to report potentially unlawful conduct. All SPNA Personnel are responsible for understanding and complying fully with this Policy.

It is important that SPNA strictly abide by the competition laws applicable to any part of the Company, to avoid competition law violations or the appearance of violations. Law enforcement officials have investigated agricultural chemical companies in herbicide and pesticide sectors for anticompetitive conduct and prosecuted claims where unlawful conduct occurred. Customers increasingly expect conformity with their compliance codes, which typically request compliance with all applicable laws. All SPNA Personnel—particularly those whose duties involve relations with competitors, customers, or suppliers—must be sensitive to our competition law obligations.

Scope

This Policy must be strictly followed in all business of the Company and applies to all SPNA Personnel unless otherwise set out in this Policy. It also applies to any agent, consultant, or partner who is representing or assisting SPNA in any transaction.

All regions in which SPNA does business have “antitrust” laws (as these laws are called in the U.S.) or “competition” laws (as called in most other jurisdictions) (collectively referred to as “competition laws”). Competition laws generally prohibit companies and individuals from interfering with the free market competition through unlawful agreements or the actions of a single dominant firm that produce unreasonable restraints on competition.

Competition Law Penalties

Competition laws are enforced by government officials and private plaintiffs. Failure to follow the competition laws and this Policy can have severe consequences. It could result in significant costs and burden on SPNA and its employees. In some competition law enforcement actions, company employees including senior management have been imprisoned.

Violation of competition laws can lead to:

Individuals prison sentences up to 10 years and fines up to $1 million.
Company fines of $100s of millions.
Private lawsuits including class actions for damages brought by customers or other injured parties.

Government investigations and lawsuits also can harm SPNA’s reputation, distract personnel, and seriously disrupt the execution of the projects and operations of the Company. Therefore, compliance with competition laws and this Policy is one of SPNA’s highest priorities.

General Prohibitions

Competition laws generally address three categories of conduct:

“Restraints of trade” or anticompetitive agreements between two or more companies that unreasonably restrict competition. These may be “horizontal” agreements between competitors (very risky) or “vertical” agreements between a supplier and customer (less risky and typically lawful).
One company’s “monopolization” of markets through anticompetitive conduct that creates or strengthens market power by excluding competition or exploiting customers.
Mergers, acquisitions, and joint ventures that substantially lessen competition.

Agreements between competitors or potential competitors (collectively referred to as “competitors”) create the greatest risk of an antitrust violation or the “perception” of an antitrust violation. You should be mindful of the language used in emails and other documents and assume that any document may be reviewed by antitrust authorities in the event of an investigation.

Specific Prohibitions

Agreements with Competitors

Agreements between competitors create the greatest risk of an antitrust violation or the perception of an antitrust violation. Some agreements between competitors are inherently anticompetitive, such as price fixing. An agreement to fix prices is automatically an antitrust violation, no matter whether it had a large or small effect in the market.

This rule of automatic illegality is applied to all inherently anticompetitive conduct, including agreements with competitors to:

Raise, lower, or fix prices or price components (price fixing).
Agree on other terms of sale or bid such as schedules, payment terms, escalation formulas or discounts, etc.
Agree on the amount of production (capacity or output).
Allocate sales territories, projects, or customers.
Coordinate bidding activities (bid rigging).

SPNA Personnel must never enter into any such unlawful agreements or even discuss such topics with competitors. If there is a need to enter any discussions with a competitor (for example to consider a joint pursuit of a bid or forming a joint venture), or if you have any concerns over the above, please consult with the Regional Legal & Compliance Office (“RLCO”) in advance.

Other agreements with competitors, not in the above categories, can also be unlawful if they harm competition.

Please note that an “agreement” need not be formal or in writing. An agreement can be oral or even an unspoken understanding. For instance, even public disclosures of prices may be unlawful when the announcements are used as a form of indirect communication between competing suppliers and leads to parallel pricing. The existence of an agreement can be proven from circumstantial evidence. Therefore, any meeting or discussion with a competitor carries the risk that it may be construed as evidence of an illegal agreement.

Meetings with Competitors

If there is a business need to meet with a company that is a SPNA competitor, please follow the below procedure. Please note that to “meet”, for the purpose of this policy, includes meetings through telephone calls, email correspondence and all other forms of communication.

Before the meeting: Document the purpose and summary of the of the meeting using the attached form of Competitor Contact & Summary of Meeting Report (Appendix 3). All forms so prepared should be submitted to you supervisor or the RLCO for approval in advance of the meeting. Follow this procedure for meeting with new companies or meetings on new topics. It is not necessary to repeat this for repeat meetings or pre-existing relationships on the same topic that your supervisor or the RLCO previously approved.
During the meeting: At the start of the meeting, please read aloud the “Antitrust Declaration for Competitor Discussions” (Appendix 2). Avoid discussing pricing, costs, profits, sales forecast, territories, offer terms, markets shares or other issues that might be considered or perceived as part of an illegal agreement.
After the meeting: Document the discussion of the meeting in a minutes of meeting using the attached form of the Competitor Contact & Summary of Meeting Report (Appendix 3). All minutes of meetings so prepared should be submitted to the RLCO. Follow this procedure for all meetings including repeat meetings or pre-existing relationships on the same topic that the RLCO previously approved.

This policy on communicating with competitors does not apply to SPNA Personnel serving non-operational roles.

If you have any concerns regarding the above, please consult with the RLCO.

Trade Associations

Trade association meetings and industry events provide valuable and lawful functions, but any gathering of competitors is an opportunity to discuss competitively-sensitive topics. Before joining a trade association or participating in trade association or industry events, obtain management authorization and seek guidance from the RLCO.

Trade association meetings should be documented by written agendas (circulated in advance) and minutes of what was discussed. During a trade association meeting or any gathering of competitors, if any competitively sensitive subject is raised, any SPNA representative attending should immediately request that the discussions cease and, if the discussion continues, leave the individual or meeting. Any such conversation should promptly be reported to the RLCO.

Sharing Nonpublic Information

SPNA internal, or nonpublic, or confidential information should not be shared outside the company. This is especially true for competitively-sensitive information, such as documents or data relating to SPNA’s costs, margins, future prices, customer agreements, and future business plans. Sharing nonpublic information with competitors can itself lessen competition and can be used as evidence that there was an anticompetitive agreement between them.

SPNA Personnel who receive nonpublic, competitively-sensitive information about a competitor should consult the RLCO and document the source of such information.

Trade association surveys, industry benchmarking, or similar activities that involve sharing SPNA information with third parties may be lawful under certain circumstances. Such activities must be reviewed and approved in advance by the RLCO.

Dealings with Customers, Distributors and Suppliers

While agreements with customers, distributors or suppliers generally raise less antitrust risk than agreements with competitors, such agreements still may violate the antitrust laws if they restrict the business of customers, distributors or suppliers in some way. In general, SPNA Personnel should seek advice from the RLCO if considering one of the following:

Restricting a distributor’s freedom to set the resale price of a product (resale price maintenance).
Offering different prices or rebates to competing customers (price discrimination).
Limiting the territory in which a distributor may sell a product.
Refusing to sell to a prospective or current customer.

Additional questions about agreements with customers or suppliers that restrict their activities should be presented to the RLCO.

Monopolization

Competition laws generally prohibit “monopolization” or “abuse of a dominant position,” which is a company’s use of its market power to prevent rivals from competing through some anticompetitive or exclusionary conduct. In most jurisdictions it is not unlawful to have a monopoly or large market position, only to obtain or maintain it by anticompetitive or exclusionary conduct.

It is contrary to SPNA policy to engage in anticompetitive or exclusionary practices. These may include pricing below cost, bundling the sale of separate products that customers prefer to buy separately, and exclusive dealing to foreclose rivals from access to necessary inputs, which are contrary to company policy where these practices may be anticompetitive.

The markets in which SPNA does business are very competitive, and SPNA does not have the power to dominate its markets. Nevertheless, any concerns that SPNA or any SPNA competitor is engaged in anticompetitive or exclusionary conduct should be directed to the RLCO.

Monitoring Compliance

Each department must ensure that each of its employees strictly complies with this Policy and the applicable competition laws.

The RLCO will supervise each department’s compliance status, propose improvement measures, and provide relevant training to SPNA Personnel as needed.

Violations and Discipline

SPNA Personnel who violate this Policy, conceal or destroy evidence of anyone’s violation, or withhold information from or refuse to cooperate with an investigation of a possible violation will be subject to appropriate discipline, up to and including termination of employment.

Dealing with Antitrust Investigators

SPNA Personnel who are contacted in any form by a national, federal, or state enforcement agency or regulator should contact the RLCO immediately. SPNA Personnel should not communicate with anyone requesting testimony or documents without review by the RLCO.

In the event of a “dawn raid,” meaning a surprise visit to SPNA’s offices for the purpose of inspecting company documents, SPNA Personnel should:

Remain calm, courteous, and professional.
Verify the identity of the inspectors.
Ask for authorization for the investigation, such as a search warrant.
Immediately call the RLCO. Do not rely on voice messages and continue calling until you have talked to a member of the RLCO.
Ask the investigators to wait until someone from the RLCO can be available.
If possible, decline to answer any questions or provide any documents until someone from the RLCO is available. However, do not prevent officials from starting their investigation if they insist on doing so even before someone from the RLCO becomes available.

Contacting the RLCO

If you have any concern about this Policy or how to apply any of this guidance, you should promptly consult your manager or the RLCO. Whether the conduct may violate the relevant competition laws or this Policy will depend on the situation. Timely consultation is the best way to avoid problems and ensure that you are acting in a lawful manner.

If you have any indication or knowledge that a director, officer, employee, agent, representative or business partner of SPNA has violated or may violate competition laws or this Policy, you must immediately report this information to the RLCO. Many jurisdictions, including the United States, provide leniency programs that may reward a company involved in anticompetitive conduct if it timely voluntarily reports the conduct and cooperates with the competition authority. The company may be rewarded with immunity from criminal prosecution or a reduction of fines.

Any questions regarding this Policy or the antitrust or competition laws should be directed to the RLCO.