1. June 5, 2013 Welcome New Members Leo S. Mackay, Jr. Chair, DII Working Group

2. New Members

3. The Defense Industry Initiative on Business Ethics and Conduct An Overview Promoting a culture of ethical conduct within the defense industry

4. In 1985, defense acquisition at height of the Cold war – allegations of criminal misconduct and government mismanagement in defense contracting – “Ill Wind” influence peddling scandal was the (unfortunate) poster child President Reagan appointed the Packard Commission, or “The President’s Blue Ribbon Commission on Defense Management,” to recommend reforms The Packard Commission, February 1986 Interim Report – waste, fraud and abuse had eroded the public’s confidence in the defense industry and the Defense Department. – The Commission urged defense contractors to improve the defense acquisition process through greater self-governance The Background

5. “To assure that their houses are in order, defense contractors must promulgate and vigilantly enforce codes of ethics that address the unique problems and procedures incident to defense procurement.” “They must also develop and implement internal controls to monitor these codes of ethics and sensitive aspects of contract compliance.” From the Report

6. The Response Jack Welch of General Electric and the CEOs and senior officials of 17 other defense contractors voluntarily met Created the Defense Industry Initiative on Business Ethics and Conduct. drafted the principles that became central to the DII. These principles first appeared in the Appendix to the Packard Commission's June 1986 final report By July 1986, 32 major defense contractors had pledged to adopt DII’s core principles.

7. Have and adhere to written Codes of Conduct; Train employees in those Codes; Encourage internal reporting of violations of the Code, within an atmosphere free of fear of retribution; Practice self-governance through the implementation of systems to monitor compliance with federal procurement laws and the adoption of procedures for voluntary disclosure of violations to the appropriate authorities; Share with other firms their best practices in implementing the principles, and participate annually in “Best Practices Forums”; and Be accountable to the public. Original DII Principles

8. Aeronca Inc. Allied-Signal, Inc. American Telephone & Telegraph Co. The Boeing Company Burroughs Corporation E-Systems, Inc. Eaton Corp. FMC Corporation Ford Aerospace & Communications Corp General Dynamics Corporation General Electric Company Goodyear Aerospace Corporation Grumman Corporation Hercules Incorporated Hewlett-Packard Company Honeywell Inc. Hughes Aircraft Co. IBM Corporation Lockheed Corporation Martin Marietta Corporation McDonnell Douglas Corporation Northrop Corporation Parker Hannifin Corporation PneumoAbex Corporation Raytheon Company Rockwell International Corp. The Singer Company Sperry Corporation TRW Inc. Textron Inc. United Technologies Corporation Westinghouse Electric Corporation Original DII Signatories

9. DII is a nonpartisan, non-profit association of responsible U.S. defense companies – committed to conducting business affairs at the highest ethical level and in full compliance with the law – our members are the professional ethics officers, CEOs and senior officials of 82 top defense companies serving the United States military DII provides resources and assistance to help train hundreds of thousands of defense-industry employees in ethics and compliance. DII holds regular meetings and conferences to share best practices DII mentors suppliers and new firms in how to comply with the laws and regulations that govern U.S. defense companies. Who We Are Today

10. The DII Principles were updated in March 2010: We, the members of the Defense Industry Initiative on Business Ethics & Conduct (DII), affirm our commitment to uphold the highest ethical standards in all our business dealings with the government, as expressed through the following principles: 1.We shall act honestly in all business dealings with the U.S. government, protect taxpayer resources and provide high-quality products and services for the men and women of the U.S. Armed Forces. 2.We shall promote the highest ethical values as expressed in our written codes of business conduct, nurture an ethical culture through communications, training, and other means, and comply with and honor all governing laws and regulations. The DII Principles Today

11. 3.We shall establish and sustain effective business ethics and compliance programs that reflect our commitment to self-governance, and shall encourage employees to report suspected misconduct, forbid retaliation for such reporting, and ensure the existence of a process for mandatory and voluntary disclosures of violations of relevant laws and regulations. 4.We shall share best practices with respect to business ethics and compliance, and participate in the annual DII Best Practices Forum. 5.We shall be accountable to the public, through regular reporting by DII to Congress and the public. These reports will describe members’ efforts to build and sustain a strong culture of business ethics and compliance. The DII Principles Today

12. DII Steering Committee: The DII is governed by a Steering committee, a policy-making body comprised of prominent defense industry CEOs DII Working Group: The DII Working Group are volunteers, comprised of one representative from each Steering Committee organization, who direct the activities of the DII DII Leadership

13. DII Steering Committee Chair Marillyn A. Hewson President and Chief Operating Officer Lockheed Martin Corporation DII Working Group Chair Leo McKay Vice President, Ethics & Business Sustainability Lockheed Martin Corporation DII Coordinator Angela B. Styles DII Leadership

14. DII Steering Committee Marillyn A. Hewson Chair, DII Steering Committee President & Chief Operating Officer Lockheed Martin Corporation William M. Brown President & Chief Executive Officer Harris Corporation Wes Bush Chairman, CEO & President Northrop Grumman Corporation Louis R. Chênevert Chairman of the Board & Chief Executive Officer United Technologies Corporation David M. Cote Chairman of the Board & Chief Executive Officer Honeywell International Inc. Scott C. Donnelly President & Chief Executive Officer Textron Inc. Linda P. Hudson President & Chief Executive Officer BAE Systems, Inc. Clayton M. Jones Chairman, President & Chief Executive Officer Rockwell Collins David Joyce President & Chief Executive Officer, GE Aviation General Electric Company John P. Jumper President & Chief Executive Officer Science Applications International Corporation Dennis A. Muilenburg President and Chief Executive Officer Boeing Defense, Space & Security The Boeing Company Phebe N. Novakovic Chairman & Chief Executive Officer General Dynamics Corporation William H. Swanson Chairman & Chief Executive Officer Raytheon Company Harold L. Yoh III Chairman & Chief Executive Officer The Day & Zimmermann Group, Inc.

15. Leo S. Mackay, Jr. Chair, DII Working Group Vice President, Ethics & Business Conduct Lockheed Martin Corporation Jamal Ahmed Senior Director, Internal Audit and Ethics Program Director Day& Zimmermann, Inc Charles D. Chadwick Vice President, Contracts and Business Conduct BAE Systems, Inc. Patricia J. Ellis Vice President, Business Ethics and Compliance Raytheon Company Sandra Evers-Manly Vice President, Corporate Responsibility Northrop Grumman Corporation La Guardia N. Myers Staff Vice President - Ethics General Dynamics Corporation Eric Kantor GE Aviation Legal Operation Associate General Counsel & Chief Compliance Officer DII Working Group Laura K. Kennedy Senior Vice President, Ethics & Compliance Science Applications International Corporation Denise King Director, Business Conduct Harris Corporation Danny Lee Vice President & General Counsel Textron Systems Corporation Dorene A. MacVey Senior Director, Ethics & Business Compliance Rockwell Collins, Inc. Ellen Martin Vice President, Ethics and Business Conduct The Boeing Company Paul Robert, Esq. Associate General Counsel & Director, Contracts & Compliance United Technologies Corporation Douglas E. Perry, Esq. Vice President, Global Compliance Honeywell Angela B. Styles DII Coordinator

16. Current Members – 82 Signatories New Member Companies Since Last BPF – Applied Research Associates, Inc. – Engility Corporation – Kforce Government Solutions, Inc. – MTS Systems Corporation – SAP National Security Services (SAP NS2) – Supreme Group USA, LLC Monthly Meetings Among Working Group Members 16 Organization Overview

17. Greater Engagement by DII Member Companies and their Leadership SmartBrief Supply Chain Tools – Model Supplier Code of Conduct – Supplier Toolkit – Supplier Due Diligence Revised web site 17 Current Initiatives

18. Monthly newsletter to all members with relevant information on ethics & compliance and the defense industry SmartBrief

19. General Question and Answers