Code of Conduct Quick Links:
Purpose
Policy
Responsibility and Compliance with Policy
Implementation
Violations of this Policy

To establish a policy for the honest and ethical conduct of business by directors, officers and employees, including consultants, sales representatives and other agents of REMEC, Inc., including its subsidiaries and affiliates ("REMEC" or the "Company"). For convenience, the individuals subject to this policy are referred to simply as "Employees."

II. Policy

All Employees are expected to observe the highest standards of business and personal ethics and to comply with all laws, regulations (including the Federal Acquisition Regulation ("FAR"), as supplemented from time to time, and the International Traffic in Arms Regulations ("ITAR")), and contract requirements in the performance of their duties and responsibilities on behalf of REMEC. Failure to do so may subject not only the Employee but also the Company to criminal sanctions (including fine and/or imprisonment) or civil liability (including suspension or debarment from the award of U.S. Government contracts and subcontracts).

No Employee should be misguided by a false sense of loyalty to the Company or a desire for profitability that might cause him or her to disobey any applicable law or Company policy. Where laws, regulations or contract requirements are ambiguous or difficult to interpret, Employees should obtain advice from their supervisor, an officer of the Company or the Corporate Legal Department.

B. Conflicts of Interest

Employees may not engage in activities or maintain ties that conflict with their duty or loyalty to the Company. Personal activities or interests that may influence, or appear to influence, the objective decisions required of REMEC Employees in the performance of their jobs are considered conflicts of interest and are prohibited unless approved in writing by their supervisor or an officer of the Company. Employees must be alert to the potential for a conflict of interest and avoid even the appearance of a conflict. An employee faced with a real or potential conflict of interest must make a full and prompt disclosure to their supervisor or an officer of the Company.

No REMEC Employee may hold a position with any competitor, customer, service provider or supplier, or any other business or professional enterprise that interferes with the performance of his or her job duties, or which may involve obligations inconsistent with the interests of REMEC.

Employees are prohibited from receiving, either directly or indirectly through a family member or close personal friend, anything of significant value (other than salary, wages or other ordinary compensation from REMEC) in connection with a transaction entered into by the Company. Where such gifts are unavoidable because of local custom or other factors, they should be reported to the Company for a determination of the extent to which they are to be considered the personal property of the recipient.

Business decisions must be made impartially and solely on the basis of such factors as price, quality, service, financial responsibility and the maintenance of adequate and reliable sources of supply. Employees may not accept entertainment or gifts from current or prospective suppliers, service providers or customers that may imply conflicts between the interests of the Employee and the Company. Employees must exercise care and discretion to ensure that any business courtesy extended or given is consistent with generally accepted ethical business practices and does not, in fact or appearance, influence the outcome of their business decisions. If in any doubt, ask before you act!

A conflict of interest can occur under a wide variety of circumstances; however, below are a few of the more common situations of what would and would not be considered a conflict of interest:

• Employees of the Company may not accept offers from investment bankers to purchase shares in an Initial Public Offering at a time or on terms more favorable than those generally available to public;
• Employees must avoid any material financial interest in competitors, customers, service provider or suppliers of REMEC without first obtaining written approval from their supervisor or an officer of the Company;
• The Company reimburses employees for reasonable and ordinary expenses for business trips; travel and transportation costs should not be financed by others;
• Employees may not accept any discount or other preferential treatment that is offered because of the Employee's position with the Company, except discounts extended to all employees;
• Employees who use company suppliers or contractors for personal business are expected to pay full market value for services rendered and materials provided;
• Non-cash gifts of nominal value ($50 or less) may be accepted; and
• In connection with furthering the Company's business interest, Employees may accept an occasional meal or entertainment that is reasonable, customary and proper under the circumstances, but only if it would be appropriate to reciprocate or if to refuse would be discourteous.

C. Use of Company Funds

The use of Company funds for any unlawful or unethical purposes is strictly prohibited. Employees are prohibited from making, or causing others to make, bribes or illegal payments to advance, promote or expedite Company interests. Such payments would include money, favors, inappropriate entertainment or gifts.

D. Commercial Bribes or Kickbacks

Company policy prohibits commercial bribes, kickbacks and other similar payoffs or benefits paid to or by a supplier, service provider or customer that are illegal under U.S. law or the law of any country affected by such payment.

Bribery of suppliers, service providers or customers includes any payment, directly or indirectly, for the personal benefit of any representative of a supplier, service provider or customer. It includes:

• Entertainment or gifts that are excessive in value;
• Cash payments by an Employee or third persons, such as agents or consultants, which are reimbursed by the Company;
• The uncompensated use of Company services, facilities or property, except as may be authorized by the Company;
• Loans, loan guarantees or other extensions of credit.

This policy does not prohibit expenditures of reasonable amounts for meals and entertainment of commercial suppliers, service provider and customers that are an ordinary and customary business expense, if they are otherwise lawful. Expenditures of this type should be included on expense reports and approved under standard Company procedures.

E. Hospitality Towards Public Officials

Acts of hospitality toward public officials and Government employees should be of such a nature as to avoid compromising the integrity or impugning the reputation of the public official, Government employee or the Company. U.S. Government employees are subject to special laws and regulations regarding the acceptance of gifts and gratuities, including meals and entertainment. Company policy prohibits Employees from providing anything of value to a Government employee, other than modest refreshments during a business meeting or promotional items of nominal value, not to exceed $20.00.

F. Political Contributions

The Company will not contribute to political parties or candidates for office except as is allowed by applicable federal, state, and local laws and regulations.

G. Unfair Competition

Under no circumstances should an Employee enter into an understandings or arrangement with a competitor affecting prices or marketing policies. Each Employee must endeavor to deal fairly with the Company's customers, suppliers, service providers and competitors. No Employee may take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair business practice.

H. Proper Accounting

Applicable laws and Company policy require the Company to keep books and records that accurately and fairly reflect its transactions and the disposition of its assets. In addition, the Company must maintain a system of internal accounting controls that will ensure the reliability and adequacy of its books and records. Failure to meet such requirement may constitute a violation of law.

To satisfy these requirements the Company has adopted policies to ensure that only proper transactions are entered into by the Company, that such transactions have proper management approval, that such transactions are properly accounted for in the books and records of the Company and that the reports and financial statements of the Company fairly and accurately reflect such transactions. All Employees having any responsibility for such functions must be familiar with such policies and comply with their requirements.

All accounting under Government contracts will be practiced in a manner that insures that only accurate and legitimate costs are charged to those contracts. Intentional mischarging, cross-charging or other unauthorized means of transferring labor or other costs between contracts are expressly prohibited by this policy.

I. Contract Compliance

Company policy requires that all delivered products, whether military or commercial, conform strictly to all contractual requirements. Where strict conformance is impractical or a non-conformance is discovered, the customer must be fully and properly informed of the non-conformance issues and provide a written waiver or concurrence. Responsibility for product conformance is shared by all functional organizations within the Company and all Employees. All Employees must perform only to the written provisions of the contract. Oral communications between a customer and the Company at any level shall not be relied upon to define or modify contract requirements.

J. Fraudulent Activity

Company policy prohibits fraudulent activity and establishes procedures to be followed concerning the recognition, reporting and investigation of suspected fraud. Fraud includes, but is not limited to, such actions as:
• Any dishonest or fraudulent act;
• Forgery or alteration of negotiable instruments such as Company checks and drafts;
• Any conversion to personal use of cash, securities, supplies or any other Company asset;
• Any unauthorized handling or reporting of Company transactions; and
• Any falsification of Company records or financial statements for personal or other reasons.

Prohibited fraudulent activity includes actions committed by any person that injures suppliers, service provider or customers, as well as those that injure the Company. Any Employee who suspects that any fraudulent activity may have occurred is required to report such concern in accordance with the procedures described below.

K. Material Non-Public Information

An Employee may not legally trade in REMEC securities if he or she possesses "material" information about the Company that has not been disclosed to the public. Such trading not only violates the Company's policies, but also violates federal securities laws and can result in a substantial fine and a prison term. If an Employee has material inside information concerning the Company, he or she must refrain from trading in the Company's shares until the information has been available to the public for at least two full trading days.

"Material" information includes any information that would influence a reasonable investor to buy or sell the Company's stock. Some examples of "material" information are:

• Sales figures or other financial results
• Significant new purchase orders or contracts
• Mergers or acquisitions
• Public offerings and other financings
• Major marketing changes
• Cancellation or modification of significant purchase orders or contracts
• Pending or threatened litigation
• Advances in research and development
• Major personnel changes
• Significant product defects or modifications
• Significant price changes on products

Business and financial information is the property of REMEC and the unauthorized disclosure of such information is a violation of Company policy. Employees should treat all corporate information with discretion and discuss non-public data only with those Company employees who have a right and need to know. Do not discuss non-public information with friends, relatives, acquaintances, customers, service provider or suppliers.

III. Responsibility and Compliance with Policy

A. Compliance

All Employees are expected to comply with both the letter and spirit of this policy as set forth above. If any order or instruction is issued to an Employee that is in violation of this policy, it is to be considered invalid, is not to be obeyed and following such order or instruction shall not relieve the Employee of responsibility for the misconduct.

Ultimate responsibility to ensure that the Company complies with the laws and ethical standards affecting its business rests on each Employee. Employees must become familiar with and conduct themselves strictly in compliance with such laws and ethical standards as well as the Company's policies and guidelines pertaining to them.

B. Reporting Suspected Violations of this Policy

If an Employee knows of or suspects a violation of applicable laws and regulations or the Company's related policies, or irregularities in accounting, internal accounting controls or auditing matters, he or she is required to immediately report that information to the Company. No Employee reporting a suspected violation will be subject to retaliation or adverse action because of a good faith report..

Employees may report suspected violations or irregularities to William H. Gibbs, Chairman REMEC Audit Committee by email to: William.Gibbs@remec.com, or by mail (marked "Confidential") to:

William H. Gibbs
Chairman REMEC Audit Committee
REMEC, Inc.
3790 Via de la Valle, Suite 311
Del Mar, CA 92014

All reports will be promptly investigated and treated confidentially to the greatest extent possible. Suspected violations or irregularities in accounting, internal accounting controls or auditing matters will be referred to the Audit Committee of the Board of Directors. It is imperative that the Employees reporting a violation not conduct a preliminary investigation of their own. Investigations of alleged violations may involve complex legal issues. Employees who act on their own may compromise the integrity of an investigation and adversely affect both themselves and the Company.

IV. Implementation

The Company's officers and directors are responsible for the administration, interpretation and enforcement of this Policy. The Company intends to use every reasonable effort to prevent the occurrence of conduct not in compliance with applicable laws and regulations or the Company's related policies, and to halt any such conduct that may occur as soon as reasonably possible after its discovery.

Each Employee, consultant, sales representative and other agent of the Company, as a condition of employment or of their agreement, will be required to sign a form, similar to the form at Attachment A to this policy, acknowledging that they have read this policy and received a copy when first hired. In January of each year, the Human Resources department shall have each current Employee of the Company review this policy and acknowledge having read it. Signed copies of the acknowledgements shall be filed in the Employee's Personnel File. Compliance with both the letter and the spirit of this Policy shall be taken into consideration as an element of each Employee's periodic performance review.

V. Violations Of This Policy

Employees who violate this policy or other Company policies and procedures may be subject to disciplinary action, up to and including discharge. In addition, disciplinary action, up to and including discharge, may be taken against anyone who directs or approves infractions or has knowledge of them and does not move promptly to correct them in accordance with the Company's policies.