the power of i n t e g r i t y
Code of Business Conduct for ALLETE Employees
Dear Fellow Employee: Upholding excellent ethical standards is a cornerstone ALLETE value. This code of business conduct, The Power of Integrity, embodies the standards that form ALLETE’s character. Our character is one of the company’s greatest assets. We all have the power to influence ALLETE’s reputation every day. Our decisions and actions make a difference. Each of us must understand that how we do things can be as important as what we do. We have more power—power as individuals and power as a company—when we uphold high ethical standards. This code of conduct reflects our commitment to integrity. While this code of conduct does not address every challenging situation or ethical question we might face, it provides a roadmap for making appropriate decisions. Ultimately, we must trust our own good judgment and never be afraid to ask for guidance or call attention to something questionable. Each of us must understand and follow the principles contained in this handbook. You should bring concerns or report suspected violations to a supervisor or any member of ALLETE’s Compliance Management Committee, or you can call the ALLETE Ethics and Integrity Hotline at 1-866-776-6951. We all need to do our part to maintain the honesty and integrity that have formed the foundation of ALLETE’s character and will continue to power our success.
Donald J. Shippar CEO & Chairman
Alan R. Hodnik President
Table of Contents Understanding Your Responsibility........................................................... 3 Recognizing Ethical Warning Signs......................................................... 4 Facing an Ethical Dilemma...................................................................... 5 Seeking Guidance, Raising Concerns and Reporting Misconduct........ 6 Who Can Help?....................................................................................... 6 ALLETE Ethics and Integrity Hotline........................................................ 8 Non-Retaliation............................................................................................ 9 Respecting Others and Supporting Diversity......................................... 10 Avoiding Conflicts of Interest...................................................................11 Separating Family and Other Personal Relationships........................... 12 Off-the-Job Conduct.............................................................................. 13 Fair Dealing................................................................................................ 14 Business Gifts........................................................................................... 15 Financial Integrity...................................................................................... 17 Protecting Company Assets and Information........................................ 19 Safeguarding Assets.............................................................................. 19 Using Company Name, Property or Services........................................ 20 Using Information Technology............................................................... 21 Protecting Confidential and Proprietary Information.............................. 22 Managing and Retaining Records......................................................... 24 Public Disclosure of Company Information and Media Contacts........... 24 Complying with Laws and Regulations................................................... 25 Securities and Insider Trading............................................................... 26 Antitrust Laws........................................................................................ 27 Utility-Specific Requirements................................................................. 29 Working Safely........................................................................................... 30 Environmental Commitment..................................................................... 31 Relationships with Public Officials.......................................................... 32 Political Activities and Contributions...................................................... 33 Charitable and Community Activities...................................................... 33 Policy Waivers........................................................................................... 34
The Power of Integrity: Strength through Ethical Business Practices
ALLETE has built a solid reputation for integrity over more than 100 years. We are a respected business. We are also a trusted neighbor in the communities in which we serve and operate. The Board of Directors has adopted this code of conduct to help maintain ALLETEâ€™s reputation and to guide us as we make decisions in complex and dynamic environments. This code applies to directors, officers and employees of ALLETE, Inc. and its subsidiaries and business divisions. It also applies to representatives, agents and contractors doing business on the companyâ€™s behalf. Of course, no set of rules can tell us exactly what to do in every situation or substitute for our own good judgment. Our best guidelines are individual integrity, common sense and compliance with law.
We should use this code of conduct to make decisions and take actions that are rooted in ALLETE’s core values. Essentially, this code of conduct guides us to: • follow applicable laws and company policies; • treat others with fairness and respect; • tell the truth, even when doing so may be difficult; • prioritize safety; • demonstrate environmental stewardship; • take personal responsibility; and • seek support and guidance from company leaders.
Understanding Your Responsibility Each of us must fulfill both the letter and the spirit of these guidelines. You need to read this information carefully, be familiar with how it relates to you and review it as necessary. You are responsible for completing ethics training annually. You are expected to consider and discuss ethical and compliance issues you face at work, to ask for guidance when answers are not â€œblack and whiteâ€? and to report concerns about possible misconduct. You must also follow the specific company policies and procedures that apply to you. We are expected to cooperate with investigations into alleged misconduct, and we must always be truthful and forthcoming in the course of an investigation. Supervisors and other leaders play a key role in creating and sustaining a work environment where it is understood that ethical and legal behavior is every day business. Company leaders have a special responsibility to demonstrate the highest ethical standards. Leaders should ensure consistent compliance with this code of conduct, other relevant company policies and procedures, and laws and regulations that govern their areas. Disciplinary action, up to and including employment termination, could result from violating this code of conduct, laws, regulations or other policies or procedures.
Recognizing Ethical Warning Signs Sometimes the right choice is clear and easy to make. Other times, competing priorities can lure us toward behavior that conflicts with our values. That is the time to stop and reconsider our choices. We know that we or those around us are headed in the wrong direction, if we hear, say, or think things like these:
If I followed all the policies and procedures, I’d never get my job done. No one will notice.
The law makes no sense, so why should we follow it?
I don’t care what the rule says. This is how we do it here.
Nobody ever checks this. We won’t get caught, so why follow the rule? Well, maybe just this once. Let’s not mention this to anyone else, okay?
Someone else will catch it.
Seems wrong to me, but it’s not my job.
Facing an Ethical Dilemma Circumstances are often complex; solutions are not always clear. If you are facing an ethical dilemma, ask yourself these questions to help determine the best approach: •
Would the proposed action be legal?
Would it violate any company policy?
Is it the right thing to do?
Would I feel guilty?
Would I want my family or co-workers to know?
How would it look in tomorrow’s news?
You do not have to make difficult decisions alone. Ask for guidance if you are unsure.
Seeking Guidance, Raising Concerns and Reporting Misconduct We owe it to ourselves, the company and each other to ask questions, raise concerns and report misconduct. When in doubt, seek guidance from someone appropriate. Do so as early and often as needed. It may become necessary for you to report a concern. Although you may feel uncomfortable, serious harm could result if legitimate concerns are not raised and addressed. Speak up promptly: • when in doubt about how to handle a situation that could potentially conflict with this code of conduct or other company policies; • to report a known or suspected violation of this code or company policy by employees, officers, directors, representatives, agents or contractors; or • to report conduct that appears to be dishonest, unethical or illegal.
Who Can Help? Speaking directly and honestly with an appropriate person is usually the best way to get advice or resolve a concern. When possible, talk to your immediate supervisor or manager first. If you are uncomfortable discussing an issue with your immediate supervisor or manager, seek assistance from any of the following: • the next higher leadership level • a member of the Compliance Management Committee • another supervisor or manager • Human Resources No matter which person you go to, these people are expected to be receptive to questions and to respond promptly by offering guidance and clarifying requirements. If you do not feel comfortable going to any of the resources listed here, call the ALLETE Ethics and Integrity Hotline at 1-866-776-6951.
You have options for reporting ethical concerns or asking questions.
Immediate supervisor Next higher leadership level Compliance Management Committee member Another supervisor or manager
ALLETE Ethics and Integrity Hotline 1-866-776-6951
Current Compliance Management Committee members are listed on the company intranet page and at www.ALLETE.com. 7
ALLETE Ethics and Integrity Hotline
If you find it difficult to bring an ethical or compliance concern directly to company leaders, or if you wish to remain anonymous, you can choose to call:
ALLETE Ethics and Integrity Hotline 1-866-776-6951 This toll-free service is available 24 hours a day, seven days a week. Use the hotline to ask questions, voice ethical concerns or report information about possible violations of this code of conduct, company policies, laws, rules or regulations. You can also use the hotline to communicate information directly to the Audit Committee Chair and Lead Director. All ALLETE Ethics and Integrity Hotline calls are answered by trained specialists employed by an outside organization. If you place a call to the hotline, you will be asked to provide enough information to initiate a query or investigation. You may give your name or you can choose to remain anonymous. You will receive instructions and a time frame to check back with the hotline for the companyâ€™s response to your question or to learn the status of an investigation. Periodic updates will be available to you through the hotline until the issue is resolved. You can receive updates even if you choose to remain anonymous. The specialist who takes your call will report the information to ALLETEâ€™s General Counsel or Controller. The information then will be handled by appropriate company employees who will review and investigate the report, respond, and determine if corrective action is required.
ALLETE prohibits retaliation of any kind against anyone who asks questions, raises concerns or reports misconduct in good faith. ALLETE also prohibits retaliation of any kind against employees who participate in company investigations into alleged misconduct. Anyone who retaliates against another person for seeking help, reporting in good faith suspected misconduct or participating in an investigation will face disciplinary action up to and including employment termination. If you think you or someone else has been subjected to retaliation, you should immediately tell your supervisor or manager, any member of the Compliance Management Committee or Human Resources. If you are uncomfortable talking with these individuals, report your concern to the ALLETE Ethics and Integrity Hotline at 1-866-776-6951.
Respecting Others and Supporting Diversity Our most basic common values dictate that we treat each other with dignity and respect. We meet this fundamental obligation by showing standard courtesy and consideration to every person we encounter through work, and by respecting diverse people, cultures and ideas in the workplace. ALLETE is committed to complying with all applicable laws prohibiting discrimination in employment, including hiring, training, promotions, compensation decisions, performance reviews and terminations. Each of us has the right to work in an environment free from offensive references, words and actions. Discrimination, offensive communication, intimidation, unwelcome advances or harassing behaviors are disrespectful and could subject the offender and the company to legal claims. If you notice offensive conduct in the workplace, or if you believe you have been subjected to it, you should promptly report it.
Avoiding Conflicts of Interest Each of us has a duty to advance the company’s legitimate interests when the opportunity to do so arises. Opportunities gained from company information, position or property should not be used for personal benefit. It is wrong for us to compete with the company. Our loyalty to the interests of ALLETE and its businesses should be free from conflicting interests. We must avoid relationships—financial, business or personal—that are opposed to company interests or might cause a conflict with our job performance. It is important to conduct ourselves in a manner that avoids even the appearance of conflict between our personal interests and the company’s interests. There is a conflict of interest when we take an action or have a strong personal interest that makes it difficult to perform our work in an objective manner that promotes the company’s best interests. Conflicts of interest include situations when we, our family members or friends have the potential to receive personal benefits as a result of our work decisions. Actual or apparent conflicts can arise even when we do not act but have the power to act. For example, a conflict would exist if a supervisor had a personal interest in a matter being handled by employees in his or her area. If you have an actual conflict of interest, you must immediately report the details to your supervisor or manager. You should also discuss a potential conflict of interest with your supervisor or manager as soon as you become aware of it. If a resolution to the conflict is not apparent, the supervisor or manager must refer the matter to the Compliance Management Committee. You should also report information about an actual or potential conflict of interest involving others. It is best to document conflicts of interests in writing. I am responsible for selecting a contractor to perform maintenance work. My brother owns the only local shop that can do the work. Must I select an out-of-town contractor to avoid the appearance of a conflict of interest? There is at least a perceived conflict of interest here. Explain the situation to your supervisor and the person in your area responsible for purchasing and contracts. You should not be involved in or influence the contractor selection. 11
Separating Family and Other Personal Relationships We must avoid circumstances where our personal relationships influence, or appear to influence, work relationships and responsibilities. We may not work in any area where we have a direct or indirect reporting relationship with a family member or domestic partner. Consult your employee policy guide for clarification about which relatives and personal relationships the policy affects. Any exceptions to policies about family reporting relationships must be approved in writing by your companyâ€™s President or ALLETEâ€™s Chief Executive Officer. Supervisors are strictly prohibited from engaging in romantic or sexual relationships with anyone reporting to them directly or indirectly. Each of us must refrain from engaging in any romantic or sexual relationship with co-workers, customers, suppliers or other company contractors, representatives or associates if it could create a conflict of interest. If you have a question or concern about this policy, consult with a supervisor or manager, a Compliance Management Committee member or Human Resources. If you do not feel comfortable with these options, you can choose to report the concern using the ALLETE Ethics and Integrity Hotline at 1-866-776-6951. Because I am employed by the company, does that mean that my relative cannot be hired? If she is hired, does that mean that I cannot be promoted? It will depend on the family relationship and your role within the company. So long as you and your relative would be in different work groups and neither of you would directly or indirectly supervise the other, her hiring may be allowed. Either of you might become ineligible for a transfer or promotion if the job change would put you in the same work group or create a direct or indirect reporting relationship.
Off-the-Job Conduct As a general rule, our personal lives are our own. At the same time, the company takes pride in being highly respected in all our communities. What we do and say off the job must not reflect poorly on the companyâ€™s reputation or interfere with our job performance. Our off-the-job conduct should not conflict with the companyâ€™s values or harm its interests. Can employees be disciplined for their offduty postings on Internet blogs or social networking sites like Facebook or Twitter? Generally not. However, the company can hold employees responsible for their online posting if the message divulges the companyâ€™s confidential or proprietary information or draws negative attention to the organization that could impact its reputation or business. A posting must not contain inappropriate comments about co-workers.
Fair Dealing Our reputation is a reflection of how we treat others. We must always deal fairly with the company’s customers, suppliers and competitors. It is wrong to take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice. Failing to deal fairly with others could damage our reputation and the company’s reputation. It also could be illegal. The purchasing department has received competitive bids from several suppliers. We have done business with a company in the past and hoped to work with them again. That company has submitted a price quote substantially higher than the others. Can I tell the supplier its bid is high and accept their revised bid? No. It is not ethical to disclose any supplier’s information, quotes or bids. There may be times when it could be appropriate to seek revised bids, such as when new information changes the scope of the company’s needs. In such cases, however, all suppliers must be given the same opportunity to rebid. You must follow all company purchasing policies.
Business Gifts We may occasionally give or receive business gifts, including services or other courtesies. All gifts should be open and aboveboard. We may offer a gift to customers or other business associates only if the gift: •
is not contrary to any law, regulation or policy;
is reasonable and consistent with good judgment;
is offered in the ordinary and proper course of doing business; and is properly approved and accurately reflected on company books and records.
We may not give a gift to a person, company or other entity with the intent to persuade or influence. Never give a gift or courtesy that reasonably might be construed as a bribe. Complex laws address gifts to government and other public officials. In some cases, even a simple gesture like paying for a cup of coffee could be prohibited. If you are considering giving a gift to a government or other public official, follow the applicable laws. We may accept gifts of modest value if our acceptance would not cause favoritism or create any obligation to the giver. We must not accept any item of value if it would influence, or appear to influence, our business judgment or decisions. Before accepting a gift, ask yourself: •
Would the company or I be influenced by accepting it?
Would others believe that I was influenced by the gift?
Would others think that someone received an unfair advantage?
Does this offer seem unusually generous?
Could I afford to buy it for myself?
Do I feel uncomfortable accepting the gift?
When in doubt about whether to give or accept a gift, seek guidance.
During the holiday season, a supplier sent me a gift basket filled with gourmet food. I order from this supplier frequently and he knows I will send another big order out for bid soon. Can I keep the gift basket? You may keep it if you feel comfortable that the gift is reasonable and that it will not influence, or appear to influence, your business decisions. Because the food basket can be easily shared with coworkers, it is better to do so rather than keeping it for your personal use or consumption. (For gifts not easily shared among co-workers, consider a drawing or other random way to determine who in the work group will keep the item.)
A vendor has offered to give me private box seat tickets to a professional sporting event. The vendor does not plan to attend and told me I could go with my spouse or friends. Should I accept the gift? The more expensive or exclusive a gift, the more likely it is to influence your business decisions or appear to influence you. You should discuss the offer with your supervisor and weigh it carefully. You might decide to decline the tickets. If you decline a gift, respectfully express your appreciation for the gesture and state simply that you cannot accept the gift. Assume good will on the giverâ€™s part and consider the ongoing business relationship as well as the giverâ€™s feelings.
Financial Integrity ALLETE is a publicly traded company regulated by the Securities and Exchange Commission, which requires us to report financial and other information. Our utility operations and other ALLETE businesses also are regulated by federal and state agencies. Our company books and records must be complete and accurate to maintain shareholder, regulator and public trust and confidence, and to comply with law. We must record and report all transactions in compliance with Generally Accepted Accounting Principles and relevant laws and regulations. Each of us plays a part in our companyâ€™s financial integrity. We each make financial transactions when we report our time, use our company credit card or submit an expense report. The way we record financial transactions and other business information can have financial or regulatory impact. We must follow all applicable procedures and controls and record all transactions completely and accurately. We must take special care to ensure that costs are properly charged to our regulated businesses. Your accounting department can answer any questions about the correct recording of financial transactions. We must never alter, omit or falsify any transactions, or facilitate any questionable, unauthorized or illegal payment. The audit process verifies the integrity of company information for company leaders and the public. We must always cooperate fully and honestly with internal and external auditors. It is December, and $100,000 of my construction project budget for the year remains unspent. I will need that money for project work scheduled for early January. Can I tell the company accountants to accrue the $100,000 now to preserve the budget dollars? No. Proper accounting practices require that we accrue, and therefore expense or capitalize, only amounts for goods or services actually received. If the work has not been performed or if we have not taken ownership of materials, it is inappropriate to accrue for future amounts.
I was reviewing the budget-to-actual-cost report on a project that I knew was close to exceeding its budget. I noticed that several charges had been transferred from this project to another project. Should I report this transfer activity? Further investigation is warranted. Discuss the transfers with the individual who made them to determine if they appear proper. If you still have concerns, discuss them with your supervisor. If you are not comfortable going to your supervisor, raise the issue with someone else using one of the options listed in the Who Can Help section of this code.
During the past two weeks I spent some days working on a project for another area. I am completing my time sheet and Iâ€™m not sure where to charge this time. Can I record my time as I normally do? Not necessarily. The work order or job code to which you record your time can affect who ultimately pays for it. For example, if your regular work supports utility customers and the special project you worked on relates to a different part of the business, charging the special-project time to your normal charge number could unfairly increase costs borne by utility customers. To help the company neither undercharge nor overcharge stakeholders, you must accurately and properly record your labor and expenses. Consult your supervisor or someone in your accounting department to determine the proper charge number.
Protecting Company Assets and Information The companyâ€™s facilities, equipment, materials and information have been built or acquired through the hard work of many people using the companyâ€™s resources. We owe it to ourselves, our company and each other to protect company assets and information and to ensure that they are used appropriately.
Safeguarding Assets We must protect company assets, supplies and equipment from damage or loss and ensure their efficient use. Waste and theft are serious offenses against our co-workers, shareholders, customers and other stakeholders. We should immediately report any suspected incident of fraud or theft.
Using Company Name, Property or Services Company facilities, equipment, materials and information are intended for business purposes only, unless appropriate approval is obtained. Our time on the job should be dedicated to business purposes. We should not give company property or unpaid services, or loan company equipment, to any person (including another employee) without appropriate authorization. We should never use company information, company property or our company position for personal gain. We should not use the company name or purchasing power to obtain personal discounts or other advantages that are not broadly available to other employees or the general public. A nearby coffee shop offers an â€œALLETE discountâ€? to anyone who can show a company ID card or other proof of employment. If I accept the discount, am I using the companyâ€™s name for my personal advantage? As long as the business offers the discount generally to all company employees for their personal purchases, it is okay to take advantage of this offer. On the other hand, if the coffee shop offered a special discount to ALLETE for business catering, it would be inappropriate to request the same discount for your personal purchases because you work for ALLETE.
Using Information Technology As with other company property, information systems—including computers, software, email, instant messaging, company intranet, Internet access, telephones, mobile phones and mobile data devices (such as BlackBerry, iPhone, etc.)—are intended for business purposes. Limited personal use of this technology may be permitted by company policies. The company may monitor our use of company information systems; we should not expect privacy. Whether business or personal, every message we send and every conversation we have using company technology reflects directly on the company. The content must be appropriate. We must not use company information systems in any manner that is connected with offensive, discriminatory, sexually explicit or inappropriate material, or in a manner that could subject us or the company to legal claims. Before sending an email or instant message, consider the following: Your message can be forwarded to others—and even altered— without your consent or knowledge. • Messages may be misinterpreted. What sets the tone in faceto-face or spoken communication is missing from electronic communications. • The company logs all data stored on or passing across the company network. The logs remain even after you delete an email message from your mailbox. • You could negatively impact system performance, security or reliability. • You might be misusing company time. •
I sometimes receive chain email messages or jokes at work from my family and friends. The jokes are not “off-color” and I don’t see any harm in forwarding them to my co-workers and friends. Actually, some of them are quite funny! Can I forward the messages from work? While limited personal use of company email is allowed, using your company email to forward chain messages is discouraged. They take up space on company servers and may carry viruses. Using company resources to send these emails can also give the impression that you do not use company resources wisely. Keep in mind that humor is subjective; what you find funny could offend someone else. 21
Protecting Confidential and Proprietary Information Information assetsâ€”competitive data, proprietary information and other confidential business recordsâ€”count among the companyâ€™s most valuable resources. Examples include: financial data; business strategies or plans; intellectual property; operational information; marketing information; private personal information about our customers, employees and shareholders; and sensitive information that customers, vendors and others share with us. We share a responsibility to protect the valuable information entrusted to the company by our leaders, co-workers, customers, shareholders and suppliers. If you have confidential information belonging to the company or another person or company, you must understand and honor your responsibility to protect that information. Inappropriate disclosure of confidential information could be harmful and possibly illegal. We must communicate confidential information only on a need-toknow basis and make sure that the recipient understands how the information must be protected. Before sharing confidential information with a non-employee, we must first ensure that the recipient is covered by an appropriate non-disclosure agreement with the company. Pay close attention to how and where you store confidential information. Also, be careful not to inadvertently disclose confidential information through casual conversations in public places, email messages, mobile phone conversations or workplace discussions within earshot of others. We must take adequate precautions to protect confidential information that is sent or stored electronically. Remember that sending information by email or the Internet may not be secure. If you are unsure how to secure confidential information for electronic storage or transmittal, contact your information technology support person. Our obligation to protect confidential information continues after we leave the company. Even after we retire, resign or terminate employment, we still have the responsibility to protect confidential information that we learned through our association with the company.
I know about a customer’s confidential plans. Can I share the information with a consultant who is helping us improve our customer service? We have a confidentiality agreement with the consultant. You should not disclose the customer’s confidential information to any third party without the customer’s consent. This is true even if there is a confidentiality agreement between our company and the third party.
I accidentally sent an email message containing confidential information to the wrong person within the company. There is no business reason for the recipient to know the confidential information. What should I do? It may not be enough to just “recall” the message and assume no harm was done. Immediately inform the recipient that you sent the message in error. Tell the person that the message contains information that you are legally required to maintain as confidential and that he or she should not read it. Ask the person to delete the message and to confirm for you that it has been deleted. If the confidential information belongs to someone else, contact the Legal Services Department to help you determine whether we must notify the party whose information was disclosed.
Managing and Retaining Records Our job duties may require us to document activities and retain records to meet operational, regulatory and legal requirements. Each of us is expected to properly manage our documentation and records, both physical and electronic, in accordance with regulatory and legal requirements and company retention policies.
Public Disclosure of Company Information and Media Contacts We are expected to comply with federal and state securities laws regarding the disclosure of company information. We are not permitted to publicly disclose confidential information or to speak on behalf of the company unless we are explicitly authorized to do so. Questions from the media or other organizations should be referred to the appropriate company leaders.
Complying with Laws and Regulations Numerous laws apply to the work we do, and requirements are often complex. We are responsible for understanding the laws, regulations and other requirements that pertain to our jobs, and for helping ensure that company operations conform to applicable law. Failure to comply with applicable laws or regulations could have serious consequencesâ€” potentially resulting in personal sanctions, corporate liability or both. Of course, we are not expected to ensure legal compliance on our own. Laws and regulations can be complex and difficult to interpret. We should discuss legal compliance with co-workers, as appropriate, or our supervisor or manager. Whenever we have doubts or questions about any legal compliance matter, we should contact the Legal Services Department.
Securities and Insider Trading In the course of our jobs, we may learn inside information about ALLETE or other companies before the information is made public. We might obtain the information as we perform our assigned work. We could come across inside information inadvertently, for example, by seeing a document left on a copy machine or overhearing a conversation. “Inside” information is any non-public information that, if disclosed, would reasonably be expected to affect the price of a company stock or influence an investor’s decision about buying or selling the company stock. Inside information could include: financial and strategic business information; forecasts of unanticipated financial results; a pending or proposed merger, acquisition or divestiture; changes in key management; significant litigation; or the gain or loss of a substantial customer or supplier. Using inside information for our financial or other personal benefit or conveying the information to others is unethical, a violation of this code of conduct and potentially illegal. The legal prohibition against insider trading not only applies to directors and officers, but to anyone who possesses inside information. If we have inside information about ALLETE or another company, we must not buy or sell the securities of that company, either directly or through family members or other persons or entities. The law provides substantial civil and criminal penalties for those who fail to comply with insider trading prohibitions. Contact ALLETE’s General Counsel regarding compliance with insider trading laws, including questions about whether you possess inside information. It is June 30, and I would like to rebalance my 401(k) investments by moving some ALLETE stock into other investments. I am not an executive, but because of my job I have seen ALLETE’s preliminary financial results for the second quarter. Is it okay for me to rebalance my 401(k) investments now? No. You have information about financial results that has not yet been released to the public. Even if this knowledge is not driving your decision, you should wait until after the second quarter earnings have been released and the market has reacted before you buy or sell ALLETE stock. This includes transferring into or out of an ALLETE stock fund investment in your 401(k). Consult with ALLETE’s General Counsel before engaging in any transaction involving company stock. 26
I know that the company is seriously considering buying a business. I also know that my in-laws hold stock in the other company and that they are considering selling the stock. I think the other company’s stock price will go up once the transaction is announced. Can I encourage my in-laws to postpone selling? No. As tempting as it may be, it would be wrong—and probably illegal—to influence someone else’s investing decision based on your knowledge of material, non-public information.
Antitrust Laws Antitrust laws promote fair competition among businesses. Activities that restrict free competition or allow a company or group of companies to dominate a market (whether as a seller or buyer) might violate federal or state antitrust laws. In general, competitors may not agree to fix or control prices, boycott specific suppliers or customers, allocate customers or territories with competitors or limit production or sale of products or product lines for anticompetitive purposes. We must not discuss prices, bids, cost or profit margins, market share, production or sales volume with representatives of competing companies. If a competing company initiates a discussion on these topics, we should report it immediately to ALLETE’s General Counsel. We must not enter into contracts or other arrangements that involve exclusive dealing, special or unique pricing, tie-in sales or other restrictive agreements with suppliers or customers without prior approval from company legal counsel. Given the complexity of antitrust laws and the severe penalties for violating them, we must contact ALLETE’S General Counsel whenever an anti-trust question arises. 27
Because we are one of only a few wood waste buyers in the region, I think we have an opportunity to work with the other buyers to reduce everyone’s cost. I believe we can get the primary supplier to cut its prices by 50% if we all join together and refuse to make any purchases from this supplier unless price reductions are made. Is this a problem or just good negotiating? It may be a problem. Most of us are familiar with the term “monopoly”— where a seller has control over a market. There are potentially similar antitrust issues with what is called a “monopsony”—where a buyer (or group of buyers) controls a market. You should contact ALLETE’S General Counsel before discussing your idea with other buyers.
Utility-Specific Requirements ALLETE’s utility operations are subject to specific state and federal laws and regulations. The North American Electric Reliability Corporation (NERC) reliability standards set requirements for planning and operating the bulk electric system, and govern activities in a wide variety of functions across the utility. Bulk electric system reliability is critical, and we are all expected to adhere to the requirements of these standards. Utility operations are also subject to the Federal Energy Regulatory Commission (FERC) Standards of Conduct. These standards restrict the disclosure of sensitive, non-public transmission information to utility marketing contacts. If we have the company’s non-public transmission information, we must not serve as a conduit of that information to internal or external energy marketing contacts who are not authorized to receive the information. At Minnesota Power, employees designated as marketing contacts are listed as “MP-Marketing” in the corporate telephone directory. In addition, state and federal requirements prevent ALLETE’s utility operations from subsidizing or otherwise granting an undue preference or advantage to their affiliate companies or non-regulated marketing functions. We are all required to ensure that our actions comply with these safeguards against threats to the reliability of the bulk electric system, impermissible disclosure of transmission information and affiliate abuse. I am working on an emergency repair of a Minnesota Power transmission line. I was told that the line may be down for a few days. I am meeting some friends from a neighboring utility after work. May I tell them about the unplanned outage? You should not share this information unless you are sure that it has already been made public. If the outage has not yet been posted as public information, you must not share it with energy marketing contacts at our company or other utility companies. Even if your friends do not work in marketing at the neighboring utility, you would be a “conduit” if they were to share the information with a marketer at their company.
Minnesota Power has some equipment it no longer needs. We heard that Superior Water, Light and Power needs similar equipment. Can we transfer the equipment to them? Yes, but regulatory approval may be required. Minnesota Power and SWL&P are subject to the affiliated interest rules of their respective state commissions. Transfer of the equipment may fall outside the scope of arrangements between the two companies that have already been approved by the respective commissions. If so, depending on its size and nature, a transaction between Minnesota Power and SWL&P might require the approval of the Minnesota state commission, the Wisconsin state commission or both. You should discuss any proposed asset transfer or sale with the Legal Services Department before proceeding.
Working Safely Our on-the-job well-being depends on being able to return home from work uninjured and knowing that our co-workers are also safe. ALLETE is deeply committed to protecting health and safety. Each of us must know and comply with the safety laws and regulations that pertain to our work. We also must follow all applicable safety rules. Penalties for violating safety laws, regulations and rules can be severe for the company as well as for individual employees. Even more important, our safe workplace behavior will protect us, our families and our communities. It is simply the right thing to do. 30
Environmental Commitment ALLETE supports environmental stewardship, believing it is good business. ALLETE will balance the environmental impact of our activities with our obligations to shareholders, customers, communities and future generations. We must understand and follow the environmental laws, regulations and rules that govern our work areas. Consistent with its environmental commitment, the company will: • meet all regulatory requirements; • limit the environmental impacts of our activities; • protect the environment as we carry out our responsibilities; • stress efficiency, recycling and pollution prevention; • demonstrate and promote conservation of land, air, water and energy resources; and • advocate for reasonable and practical environmental laws, regulations, policies and practices.
Relationships with Public Officials Decisions made by government officials and regulatory agencies can have a significant impact on our customers, shareholders, employees and the company. It is important that officials understand how certain issues will affect us. It is also necessary, at times, to communicate operational and financial information to government or other public officials. Many laws and regulations govern our contacts with government officials and regulatory agencies. If we are involved in these communications, we must understand and obey the laws governing lobbying activities, gifting and reporting requirements. We must also be familiar with specific rules set by individual agencies or other governmental bodies. It may be improper to have contact with public officials about a matter pending for consideration because that contact could improperly influence, or appear to influence, the decision. Specific company departments and employees are responsible for communicating accurate information to the appropriate government and agency personnel. Company policies and procedures will direct who should act as primary contact during facility inspections by government agencies, such as Occupational Safety and Health Administration (OSHA), the Mine Safety and Health Administration (MSHA) and the Environmental Protection Agency (EPA). If you are asked to provide company information to a government or other public official and you are not specifically authorized to do so, you should contact the appropriate person in our business or the Legal Services Department prior to responding to the request. If someone from the Minnesota Pollution Control Agency arrives for an unannounced inspection and asks me questions about things I am not familiar with, should I try my best to answer? It is important that the inspector receives accurate information. Tell the inspector that you are not qualified to provide the answers. Introduce the inspector to the employee who is qualified and authorized to provide the information. Even if no one else is available, do not answer questions beyond your ability. The inspector may need to follow up at a later time. Accurately document the questions and communicate with your supervisor to ensure that the questions have been adequately addressed. 32
Political Activities and Contributions The company may take specific positions on political or public policy issues affecting customers, shareholders, employees or other company interests. The company will comply with applicable laws for participation in the political process, and will make no illegal contributions directly or indirectly to, or expenditures on behalf of, any candidate for elective office, any political party or any political committee. As individuals, we are encouraged to participate in the political process and are free to make voluntary personal contributions to candidates, parties or political committees. Each of us must comply with federal and state laws dealing with political activities and political contributions.
Charitable and Community Activities As a company, our accomplishments are measured not only by the service and value we provide to customers and shareholders, but also by our commitment to responsible corporate citizenship. As part of this commitment, the company and the Minnesota Power Foundation support numerous nonprofit organizations and community events. We are also encouraged to participate individually in community projects and organizations, and many of us choose to volunteer in the communities where we live and work. We are encouraged to serve 33
on nonprofit boards and in any other volunteer capacity that we may choose. The company recognizes that volunteer community service can give us valuable work and leadership experience as well as a sense of personal fulfillment. Generally, our volunteer efforts should be done on our own time and on our own behalf. Occasionally, a personal volunteer activity might involve taking time during normal working hours. If so, we should ask our supervisor and make arrangements in advance. We should also consult with our supervisor if we are unsure whether we would be serving as a company representative or volunteering in an individual capacity.
Policy Waivers In exceptional circumstances, the company may waive a provision of this code of conduct. Waivers are neither standard nor taken lightly. All waiver requests must be brought to the Chief Executive Officer. Only the Audit Committee of the ALLETE Board of Directors may approve a waiver for a director or an executive officer and any waiver involving a director or executive officer must be promptly disclosed to shareholders.
Dear Fellow Employee: Upholding excellent ethical standards is a cornerstone ALLETE value. This code of business conduct, The Power of Integ...