Code of Conduct for Suppliers

INTRODUCTION.

Merit is strongly committed to conducting its business in a lawful and ethical manner, including engaging with suppliers that are committed to the same principles. Merit suppliers are viewed as an extension of Merit, and therefore are expected to adhere to similar guidelines for ethical business practices. We require suppliers in our manufacturing supply chain to comply with our Supplier Code of Conduct (“Supplier Code”), which is detailed below. Merit also expects its suppliers to hold their suppliers and subcontractors to the standards and practices covered by our Supplier Code. Our products must be manufactured in a manner that meets or exceeds the expectations of Merit and our customers as reflected in our Supplier Code.

Here are some of the key areas we focus on:

Prevention of child labor, forced labor or other forms of human trafficking
Fair and ethical treatment of workers, including non-discrimination
Providing workers with a safe and healthy work environment
Prevention of bribery and corruption in the supply chain

To ensure that our supplier standards incorporate best-in-class practices, we are continually improving our program. Merit monitors all of its suppliers. Assessments of suppliers, audits and findings are reviewed by the appropriate senior leadership and corrective action plans are implemented as needed.

Merit may terminate its relationships with any supplier that violates our Supplier Code or does not cooperate with our assessments or audits.

SPECIFIC PRINCIPLES

Guiding Principles. Our suppliers’ business and labor practices must comply with all applicable laws, as well as the requirements and principles of this Supplier Code. Suppliers must comply with the standards of this Supplier Code even when this Supplier Code exceeds the requirements of applicable law. Merit encourages its suppliers to continually improve their labor standards, business ethics, and commitment to employee health, safety and the environment.

Child Labor. Merit will not tolerate the use of child labor. Our suppliers must engage workers whose age is the greater of: (i) 15, (ii) the age of completion of compulsory education, or (iii) the minimum age to work in the country where work is performed. Furthermore, workers under the age of 18 must not perform hazardous work. Merit supports the development of legitimate workplace apprenticeship programs that comply with applicable laws and this Supplier Code.

Involuntary Labor, Human Trafficking, and Slavery. Our suppliers must not use forced labor – slave, prison, indentured, bonded, or otherwise. Our suppliers must not traffic workers or in any other way exploit workers by means of threat, force, coercion, abduction, or fraud. Working must be voluntary, and workers must be free to leave work and terminate their employment or other work status with reasonable notice. Our suppliers must bear or reimburse to their workers the cost of all excessive recruiting, hiring, or other similar fees charged to workers, and all fees and expenses charged to workers must be disclosed to Merit and such workers in advance. Our suppliers must not require workers to surrender government-issued identification, passports, or work permits as a condition of working, and our suppliers may only temporarily hold onto such documents to the extent reasonably necessary to complete legitimate administrative and immigration processing.

Safety and Health. Our suppliers shall provide a safe and healthy workplace environment and shall take effective steps to prevent potential accidents and injury to their employees’ health by minimizing, so far as is reasonably practicable, and in cooperation with their employees and the hazards inherent in the workplace. All supplier employees will receive safety and job-specific instructions during their employment with the company. Supplier employees shall have access to clean sanitary facilities and drinking water.

Wages and Benefits. Our suppliers must pay their workers in a timely manner and provide compensation (including overtime pay and benefits) that, at a minimum, satisfy applicable laws. Suppliers must provide to their workers the basis on which workers are being paid in a timely manner via pay stub or similar documentation. Deductions from wages as a disciplinary measure are not permitted.

Working Hours. Except in unusual or emergency situations, (i) suppliers must not require a worker to work more than 60 hours per week, including overtime, and (ii) each worker must be entitled to at least one day off for every seven-day work period. In all circumstances, working hours must not exceed the maximum amount permitted by law.

Anti-discrimination. Conditions of working must be based on an individual’s ability to do the job, not on personal characteristics or beliefs. Our suppliers must not discriminate on the basis of race, color, national origin, gender, sexual orientation, religion, disability, age, political opinion, pregnancy, marital or family status, or similar factors in hiring and working practices such as job applications, promotions, job assignments, training, wages, benefits, and termination. To the extent that medical testing of workers or applicants is performed, Suppliers will only use such tests for legitimate reasons and never as a basis for unfair discrimination.

Fair Treatment. All workers must be treated with respect and dignity. Our suppliers must not engage in or permit physical, verbal, or psychological abuse or coercion, including threats of violence, sexual harassment, or unreasonable restrictions on entering or exiting work and residential facilities. Workers must be free to voice their concerns to Merit or its auditors, and allowed to participate in the Merit audit process, without fear of retaliation by supplier management.

Immigration Compliance. Our suppliers may only engage workers who have a legal right to work. If suppliers engage foreign or migrant workers, such workers must be engaged in full compliance with the immigration and labor laws of the host country.

Freedom of Association. Our suppliers must respect the rights of workers to establish and join a legal organization of their own selection. Workers must not be penalized or subjected to harassment or intimidation for the non-violent exercise of their right to join or refrain from joining such legal organizations.

Ethical Behavior

No Bribery. Our suppliers must not offer nor accept bribes or other means of obtaining undue or improper advantages to anyone for any reason, whether in dealings with governments or the private sector. Our suppliers must not induce Merit employees to violate our Code of Business Conduct and Ethics posted at: https://meritlegacy.decort.co/wp-content/uploads/2022/12/Merit-CodeOfConduct-2019-Web.pdf

Anti-Corruption. Suppliers must comply with applicable anti-corruption laws, including but not limited to the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and not offer anything of value, either directly or indirectly, to government officials in order to obtain or retain business. Suppliers must not make illegal payments to government officials themselves or through a third party. Suppliers who are conducting business with the government officials of any country must follow Merit’s guidance on the law governing payments and gifts to governmental officials.

Whistleblower Protections. Suppliers must protect worker whistleblower confidentiality and prohibit retaliation against workers who report workplace grievances. Suppliers must create a mechanism for workers to submit their grievances anonymously.

Environment. Merit is conscious and protective of the environment in all aspects of its business dealings, and expects all suppliers to be mindful of the environment and seek to minimize environmental impacts wherever possible. Merit expects all suppliers to provide accurate, timely responses to requests for materials information to support Merit’s compliance with domestic and international regulations.

Environmental Permits and Recordkeeping. Suppliers must obtain and keep current all required environmental permits, approvals, and registrations and follow applicable operational and reporting requirements.

Effective Management and Disposal of Hazardous Substances. Suppliers must effectively identify and manage the safe handling, movement, storage, and disposal of chemicals and other substances that pose a threat to the environment, including providing workers with appropriate training on the safe-handling and disposal of hazardous substances. Suppliers must also monitor and control wastewater or solid waste generated from operations before disposing in accordance with applicable laws. In addition, suppliers must characterize, monitor, control, and treat regulated air emissions before discharging in accordance with applicable laws.

Continual Improvement. Merit encourages its suppliers to continually improve and reduce waste. Merit welcomes suggestions and feedback from its suppliers to improve Merit’s own operations and processes.

Conflict Minerals. Merit is committed to avoiding the use of minerals that have fueled conflict in the Democratic Republic of the Congo or an adjoining country—pursuant to both US and EU laws and regulations. See: https://meritlegacy.decort.co/about/conflict-minerals-policy/ We expect suppliers to support our effort to identify the origin of designated minerals used in our products, and avoid the use of conflict minerals in their materials, components and products supplied to Merit.

Corrective Action. Suppliers’ compliance with this Supplier Code is subject to Merit’s periodic review, including assessments and audits. Suppliers must provide prompt access to their facilities and workers during any audit. We require suppliers to promptly provide a detailed remediation plan and take corrective actions for deviations from this Supplier Code, and Merit will track suppliers’ remediation efforts. Merit may (without liability) terminate its relationships with any supplier found to be in violation of this Supplier Code.

Supplier Code Last Updated: April, 2018