A POWERFUL ADVANTAGE ™
ATTENTION! This webpage is hosted on EthicsPoint's secure servers and is not part of the Advanced Energy Industries website or intranet.

Attention

Do not use this page to report complaints. This page is to be used only for management reporting of “Irregular Events” and does not provide the reporter anonymity. If you wish to file a complaint, please click here.

Management Reporting of Irregular Events

As a global competitor, our reputation for service, quality, and conducting business in an ethical and responsible manner is vital to our continuing growth and success. Also, as a company subject to U.S. Securities and Exchange Commission (SEC) rules and regulations, we are subject to numerous statutory compliance and reporting requirements.

The company has established a robust complaint reporting system that allows employees and third parties to report violations of the AE Code of Conduct or other activities that may involve “questionable” ethics or business practices. Such complaints are taken seriously. Complaints are subject to an investigation and resolution procedure, with results and remediation reported to the appropriate members of executive management as well as to the Audit and Finance Committee of the AE Board of Directors.

Reporting of Irregular and Accounting Events

In the course of conducting business, AE management may become aware of actual or suspected violations of the AE Code of Conduct or other activities that may involve “questionable” ethics, business, or accounting practices.

AE Management must report all actual or suspected violations. Such violations must be reported even if they were discovered and mitigated within your business unit in the normal course of business.

In order to ensure that such events are reported properly and completely, AE has established a reporting mechanism for management to fulfill these reporting requirements.

Types of Events

“Events” can best be described as activities that may result in a violation of the AE Code of Ethical Conduct or generally accepted business practices, or result in accounting/financial record errors. These events will be more fully described and illustrated in sections I and II of this document. Events must be reported on a timely basis. They are categorized as

  1. Events requiring immediate notification—“willful acts”
  2. Events requiring timely notification—“non-willful acts”

In some instances, management may have to interpret where any an act was “willful” or “non-willful.” In the case of doubt, management must assume the act to be willful.

I. Events Requiring Immediate Notification

Certain events must be reported in the AE event reporting system within 24 hours of their detection or reasonable suspicion (more likely than not) of their occurrence.

These include intentional or willful acts by employees, management, officers, or agents of the company that result in a violation of the individual’s fiduciary duties to the company or are committed for the purpose of direct or indirect benefit of the employee or other related parties. Any violations of local or U.S. laws must also be reported to the general counsel in accordance with corporate policy.

An act or omission is “intentional” or "willful" if done with the intent to use company resources to coerce others, commit or conceal acts of omission or commission, commit or conceal financial statement fraud, or influence to circumvent company polices, procedures, code of conduct, or U.S. and local laws and regulations.

Intentional or Willful Acts

Intentional or willful acts include but are not limited to

  • Misappropriation of company assets (or assets for which the company has custodial responsibility)
    • Theft of company assets
    • Misuse or temporary diversion of company assets
    • Unauthorized disposition of company assets
    • Actions that cause the company to pay for goods or services that were never received
  • Fraudulent reporting
    • Misstating assets, liabilities, equity, revenues (including sales cut offs), or expenses
    • Creating, falsifying, or altering business records or documents
    • Omitting transactions from being recorded in the financial and business records
    • Concealing, altering/falsifying, destroying, or stealing records and documents
    • Misreporting off-balance sheet accounts
    • Misreporting local taxes, customs, or duties liabilities (or potential liabilities)
  • Loss or destruction of company records
  • Concealment of actions or activities contrary to company policy or local or U.S. laws
  • Acts of bribery, economic extortion, illegal gratuities, or conflicts of interest by an employee or agent of the company
  • Violations of the corporate and local Delegation of Authority
  • Violations of the Company Code of Ethical Conduct
  • Acts of coercion from (or directed towards) any employee or agent or third party
  • Disclosure of confidential or personally identifiable information or proprietary data to unauthorized parties
  • Acts that may have violated a customer’s vendor relationship policy

Intentional or Willful Accounting Errors or Omissions of Fact

Intentional or willful accounting errors or omissions of fact are to be reported without regard to the materiality of the matter. They include but are not limited to understatement or overstatement of assets, liabilities, equity, revenue or expenses, or other supplemental financial information for the current or prior account periods.

II. Events Requiring Timely Notification

Certain events that may result in accounting errors or adjustments, unintentional violations of company policy, or unintentional non-compliance with local or U.S. laws and regulations are described as “non-willful.”

Non-willful events must be reported (subject to the exception below) within three calendar days of their detection or reasonable suspicion that they have occurred. If the three-day notification limit extends past the end of the company’s fiscal quarter end, such events must be reported before or by the end of the fiscal quarter. Any violations of local or U.S. laws must also be reported to the general counsel.

An act or omission is "non-willful” if done as the party was attempting to conduct business in conformance with company policies, procedures, guidelines, and the Company Code of Ethical Conduct. Errors in judgment and even negligence can be considered non-willful.

Non-Willful Events

Non-willful events include but are not limited to

  • Accounting errors
    • Financial statement adjustments that exceed $100,000 (USD) of current or prior periods. These can include but are not limited to
    • Errors noted in the accounting records
    • Discovery of assets or liabilities not previously recorded in the financial records
    • Transactions omitted from recording in the financial and business records
    • Noting of process errors that could constitute an internal control failure
    • Inventory of fixed asset adjustments
    • Invoice adjustments or bad debts charged
    • Missed accrual or accrual error

      If the amount of an accounting error is less than $100,000, although not required, management may still choose to report the error.
  • Impairment of assets (without regard to materiality)
    • Loss or destruction of company assets (includes third party theft—even if insured)
    • Loss or destruction of company records or documents
    • Unauthorized disposition of company assets
  • Actions or activities contrary to company policy, or local or U.S. laws
  • Inability to comply with Sarbanes-Oxley findings that were noted as a “significant deficiency” in the prior year
  • Acts that have violated a customer’s policy
  • Violations of the corporate and local Delegation of Authority
  • Violations of the Company Code of Ethics
  • Disclosure of confidential or personally identifiable information or proprietary data to unauthorized parties
  • Acts that may have violated a customer’s vendor relationship policy
  • Local tax, customs, or duty claims
  • Legal actions filed against the company (by a local or national government entity, customer, or vendor)

Required Event Reporting Method

In order to ensure that such events are reported properly and completely, AE has established a reporting mechanism for management to fulfill these reporting requirements.

For events applicable to Sections I and II above, the reporter is required to complete an Event Investigation Form (EIF). The EIF form is designed to solicit the following information from the reporter:

  • Business unit name
  • Date of report
  • Report prepared by
  • Location of event
  • Summary of the event
  • Event’s impact on financial statements
  • Estimate of monetary value
  • Description of the quantification of monetary value
  • Persons involved in/with the event
  • AE management involvement
  • How reporter became aware of event
  • Timeframe of event(s)
  • Business unit steps/actions taken to date regarding the event
  • Steps/actions taken to help ensure event does not recur
  • Other pertinent information

The reporter should complete the form to the best of their knowledge with the realization that responses to some portions may not be applicable, available, or complete.

It is recognized that events may cross departmental or functional boundaries. Reporting should be done by the most senior manager in the business unit or function or by the senior manager’s designee.

The reporter may chose to provide verbal, e-mail, or other forms of notification as a “temporary” notification. However, submission of the EIF form through the system (see below) is the only acceptable official method.

Click here to access the Event Investigation Form.

Such notification does not relieve management from their fiduciary duty to take actions necessary to mitigate the event, or notify operating and administrative management based upon company/business unit policies. It is acknowledged that management may have to act rapidly and independently in the event that one or more of the acts listed above are detected.