PEERLESS CONFLICT MINERALS POLICY
Peerless is committed to the protection of human rights and the promotion of high ethical business standards. Accordingly, Peerless supports the humanitarian goal of ending the armed conflicts in the Democratic Republic of the Congo and its adjoining countries (collectively, the “DRC Countries”), which are partially financed by the exploitation of “conflict minerals” (as defined in P.L. 111-203, §1502) sourced from DRC Countries.
Towards that end, and in consideration of the disclosure requirements of the regulations implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (P.L. 111-203, §1502) (the “Conflict Minerals Regulations”), Peerless set up a multi-functional team in order to develop an approach to implementation of due diligence measures designed to determine the source of conflict minerals necessary to the production or functionality of products that Peerless is deemed to manufacture or which Peerless is deemed to contract to manufacture (collectively, “Affected Products”).
Peerless’ verification process consists of:
(a) requiring Peerless’ direct suppliers to certify that Affected Products sold to Peerless contain only conflict minerals that (i) do not originate from the DRC or an adjoining country, and (ii) are sourced from smelters or refiners validated as compliant to Conflict-Free Sourcing (CFS) protocol using the CFS Compliant Smelter and Refiner Lists;
(b) requiring Peerless’ direct suppliers of Affected Products to verify the accuracy of a completed standard conflict minerals certification, which is based on the industry-accepted Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative Conflict Minerals Reporting Template, and the responsiveness or non-responsiveness of the direct suppliers in accordance with such requirement; and
(c) the establishment and implementation of a company policy dictating that Peerless downgrade the internal supplier rating of any of its direct suppliers of Affected Products that fail to comply with Peerless’ purchase order terms regarding conflict minerals or that otherwise prove uncooperative in Peerless’ efforts to engage in due diligence of its conflict mineral supply chains.
Upon request, Peerless is pleased to provide our customers with copies of Peerless’ standard conflict minerals reporting template, which is based on the Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative Conflict Minerals Reporting Template. All conflict minerals declarations made by Peerless, whether within any Conflict Minerals Reporting Template or through other medium, provided to a customer of Peerless are applicable only to products sold by Peerless to that customer during the six (6) months immediately prior to the date on which such conflict minerals declaration is made by Peerless or during such other time period as may be expressly set forth in the Template.
Determinations and Assumptions
Based on Securities and Exchange Commission Official Release No. 34-67716, Peerless has determined and assumes that the Conflict Minerals Regulations do not apply to commercial-off-the-shelf products or products known to be mere reconfigurations of commercial-off-the-shelf products (each, a “COTS” product) distributed by Peerless, or Peerless Assemblies that contain only COTS components because Peerless does not exert sufficient influence over the materials, ingredients or sub-components contained therein. For this same reason, Peerless also assumes that the Conflict Minerals Regulations do not apply to any solder, plating, fasteners, screws or other supporting hardware contained in Peerless Assemblies (“Peerless Hardware”). Accordingly, conflict minerals contained in COTS products sold by Peerless, Peerless Assemblies containing only COTS components and Peerless Hardware are excluded from conflict minerals declarations made by Peerless and are therefore excluded from the definition of “Affected Products”.
In addition, these declarations are based on and made subject to:
(a) Peerless’ purchase order terms with its direct suppliers, which require that to the extent Affected Products sold to Peerless contain conflict minerals, such conflict minerals (i) do not originate from the DRC or an adjoining country, and (ii) are sourced from smelters or refiners validated as compliant to CFS protocol using the CFS Compliant Smelter and Refiner Lists and the responsiveness or non-responsiveness of the direct suppliers in accordance with such purchase order term; (b) the responsiveness or non-responsiveness of Peerless’ suppliers to Peerless’ standard conflict minerals supplier certification, in accordance with such certification, which is based on the Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative Conflict Minerals Reporting Template; and (c) to the extent Peerless completes a smelter list in connection with these declarations, such smelter list is based on (i) the information provided by Peerless’ suppliers generally and therefore is not specific to any particular part or family of parts sold by Peerless, and (ii) the information provided by Peerless’ suppliers based on their responsiveness or non-responsiveness to Peerless documents without any independent investigation by Peerless.
As used above, the term “Peerless Assembly” means a part assembled by Peerless using multiple components specified on, and assembled in accordance with, the bill of materials, drawings and customer specifications contained or referenced in Peerless’ first article approval form issued by Peerless, signed by the customer and subsequently approved by Peerless with noted exceptions for the part in question that is in effect on the date of shipment. The term “Peerless Assembly” does not include a part offered by a supplier of Peerless that is sent as a kit by such supplier to Peerless and requires assembly by Peerless.