CONDUCTING BUSINESS
THE LEVEL 3 WAY
Our Worldwide Business Code of Conduct Handbook
TABLE OF CONTENTS
Introduction........................................................ i
Letter from Our CEO & President and COO........ iii
Purpose of This Handbook.................................. v
Our Core Values.................................................. vii
What Is Expected of Us?..................................... 1
Ask Questions and Raise Concerns.................... 2
Working Within Level 3...................................... 3
Promoting Respect............................................. 3
.� Ensuring Safety.................................................. 4
� General Business Conduct.................................. 5
� Conflicts of Interest............................................ 7
� Gifts and Business Entertainment...................... 10
� Full Disclosure & Records Management............. 13
�
�Working Externally............................................. 15
� Compliance with Laws....................................... 15
� Fair Dealing and Fair Competition...................... 15
� Competition Laws.............................................. 16
� Anti-Bribery Laws............................................... 17
� Confidential Information and Privacy................. 21
� Insider Trading.................................................... 22
�When Things Go Wrong...................................... 25
� Reporting Violations........................................... 25
� Enforcement....................................................... 26
� Investigations..................................................... 27
� Retaliation Prohibitions...................................... 28
� Waivers.............................................................. 28
�A Global Perspective.......................................... 23
� Corporate Social Responsibility.......................... 23
�When You Need Help.......................................... 29
� Resources........................................................... 29
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Conducting Business the Level 3 Way
INTRODUCTION
It’s safe to say that each of us wants to do what’s right.
Whether it’s at home or work, or visiting far-off
places, there’s a comfort in knowing the rules, and
what’s expected of us.
Our leadership and our employees of Level 3 are
committed to always doing the right thing. Doing the
right thing is the right way to do business. It is what we
refer to as the Level 3 way. Operating in an open, honest
manner is critical to our company’s success, because it
is critical to maintaining trust and credibility with our
customers, our business partners, our investors, and most
importantly, with each other.
In a world where competitors can offer similar products
and services – or offer them for less – our reputation for
ethical behavior and integrity may be one of the main
reasons that customers choose to do business with us,
why investors decide to invest in our company, or why
people come to work at Level 3.
Sometimes, the difference between right and wrong is
black and white. But other times, there are many shades
of gray, and this can make it more complicated for each of
us to know exactly what’s right.
This Worldwide Business Code of Conduct Handbook
explains the worldwide standards that make up the
Level 3 Way of conducting our business. For those times
when the proper action is clear, it provides you that
guidance, and for those situations where the proper
action is not clear, it provides guidance on the questions
to ask and the resources that are available to you to
address your questions and concerns.
Our Board of Directors has adopted
this Handbook, and it applies to all
employees of Level 3 Communications,
Inc., including employees of all our
subsidiaries around the world and the
members of the Board of Directors
when they are acting in that capacity.
Walter Scott, Jr., Chairman of the Board
James Q. Crowe
Kevin P. Chilton
Archie R. Clemins
Steven T. Clontz
James O. Ellis, Jr.
T. Michael Glenn
Richard R. Jaros
Michael J. Mahoney
Charles C. Miller, III
John T. Reed
Peter Seah Lim Huat
Peter van Oppen
Albert C. Yates
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Conducting Business the Level 3 Way
LETTER FROM OUR CEO &
OUR PRESIDENT AND COO
James Q. Crowe, CEO
Jeff K. Storey, President and COO
We believe our company derives its strength from the way
we do things and the choices we make. The way we do
business and the way we treat our customers, business
partners and each other, defines us as individuals and as
a company. It’s the Level 3 way. We know our customers
sense it. If we do things the right way, the Level 3 Way,
our potential as a company is nearly unlimited.
We focus every day on how we respond to our customers,
but equally important is how we respond to each other.
Respect is one of our core values. Integrity is another.
We must be honest in all our dealings. When we make a
commitment, we honor it. We must be professional at all
times and remain accountable to our customers, to our
investors and to each other.
That is what our Worldwide Business Code of Conduct
Handbook is about. It is designed to be a roadmap to
give each of us a better understanding of who we are and
what we stand for as a company -- our vision, our core
values, our corporate strategy and our code of conduct.
We are building a different kind of company, with a global
network that is unprecedented, a portfolio of services that
is unparalleled, and the ability to scale and move massive
amounts of information that is unequalled.
This Handbook describes how we embody our values
when conducting our business around the world. Our
values help guide our actions. We don’t cut corners.
We don’t unfairly disparage our competitors. We don’t
operate in the gray area of integrity or honesty. There
are always temptations – opportunities to shade things
and rationalize the choices. But the first question we
must ask ourselves is, “Is it right?” Do you want to risk
compromising our company’s reputation, your friends’
and colleagues’ reputations, and your own? Those are
the choices you will live with. It’s your company. It’s your
reputation.
Our company is already beginning to make national
boundaries less relevant by bringing people together
from diverse backgrounds and cultures across the globe.
We now have customers around the world, connected by
our global network platform. And they want to send and
receive information when and where they want. That is
the future of communications, and we intend to lead.
The work we do matters. Helping people communicate
and share ideas from differing perspectives, geographies
and cultures contributes to a better world. Sharing
research, ideas and information contributes to progress
and knowledge.
Our vision for the company is “To be the trusted
connection to the networked world.” And “trusted” is an
important word. Trust has to be earned every day, in every
task we complete. Trust certainly includes reliability and
security. But it also goes to how we do what we do -- how
we respond to our customers, how we carry ourselves
and how we conduct business. We believe our vision is
important and achievable.
Not only are we asking you to read the Handbook, but to
commit to The Level 3 Way of doing business in all that
you do. And here’s our commitment to you: We will do the
same, and we know that we have our Board of Directors’
support.
If we do this right, we believe that one day you’ll look
back on the remarkable company you built. Perhaps you’ll
tell your children and grandchildren how Level 3 changed
the way people communicate and, in a larger sense, made
the world a little better as it brought people together
across national boundaries and cultures. And you’ll also
tell them how you built it. You’ll tell them about things
like honor, character and values. You’ll tell them about
the Level 3 Way.
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Conducting Business the Level 3 Way
vi
PURPOSE OF THIS HANDBOOK
The material in this Handbook explains the worldwide
standards that make up the Level 3 Way of conducting
our business. We are all expected to follow these
standards every day. You can think of this Handbook as
our business code of conduct – a code that is guided by
our core values and provides the standards to help each
of us navigate some of the gray areas in business to
ensure that we – individually and as a company – always
do what’s right!
Our customer surveys have consistently
shown that being a trustworthy partner
to do business with is one of the most
important factors that cause a company
to become our customer and, perhaps
more importantly, to stay our customer.
This Handbook is only one part of a larger program that
includes our policies, procedures and training that, taken
together, tell us what is expected of us as we conduct our
business worldwide. The overall program is designed to
ensure compliance with our corporate policies and the
laws that apply to our business anywhere in the world. It
is important to remember that some of the policies and
procedures that we establish from time to time may have
requirements that are more detailed and precise than
what is stated in this Handbook.
Our Board of Directors has adopted this Handbook, and
it applies to all employees of Level 3 Communications,
Inc., including employees of all our subsidiaries around
the world and the members of the Board of Directors
when they are acting in that capacity. Even in situations
where we may not be the final decision makers, such as
a joint venture that we are participating in, we should
use our influence to have the participants follow the
spirit and content of this Handbook. In some cases, the
Handbook also applies to our suppliers and agents who
have expressly agreed to abide by its terms. Even if they
haven’t expressly agreed to abide by the Handbook, all
of our suppliers and agents are expected to conduct
themselves in accordance with the principles in this
Handbook.
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Conducting Business the Level 3 Way
viii
OUR CORE VALUES
The standards included in this Handbook reflect our five core values and their basic principles:
Our Core Values
Integrity
• We choose to do the right thing always, even when
no one is looking.
• We’re honest with ourselves, our customers and our
investors, especially when it is hard.
Accountability
•We treat the company’s assets as our own and
behave with the company’s long-term success in
mind.
•We are personally and collectively accountable to
our customers, our investors and each other for our
successes and failures.
Performance
•We behave like professionals, continuously learning
and improving our contribution.
•We reward results, and create a culture of collective
success for our customers, our investors and
ourselves.
Respect
•We value the skills, the strengths and perspectives of
a diverse workforce.
•We encourage debate and seek out differing opinions
while treating each other with respect.
Commitment
•We deliver on what we promise, internally and
externally.
•We are a trusted member of the communities in
which we live and work.
We must know and live up to these core
values in everything that we do. By
following the standards described in this
Handbook, our actions will be consistent
with our core values as well as our legal
and ethical responsibilities.
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Conducting Business the Level 3 Way
WHAT IS EXPECTED OF US?
ASK QUESTIONS & RAISE CONCERNS
•Act Ethically. Each of us must follow the highest ethical standards
when conducting business, whether it’s with a fellow
employee, or a customer, a vendor, or anyone else.
to remember that some of the requirements we have
included in this Handbook are subject to the local laws of
each specific country where we conduct our business. We
must always follow the local laws of those countries.
•Obey the Law. We must all conduct our business in a manner
that fully complies with all applicable laws and
regulations.
The requirements of this Handbook take precedence
over something that might be common practice or
acceptable in your location or within your cultural norms.
Our business conduct may never fall short of the basic
principles embodied in this Handbook, and employees at
all levels of authority or seniority are expected to comply
with each of the Handbook’s provisions, and no one is
permitted to instruct or authorize others to violate any of
the Handbook’s provisions.
•Respect Others. We are all expected to treat each other, customers,
suppliers, and other third parties with dignity and
respect.
•Communicate Openly. We all must strive to maintain an atmosphere of
open communication and cooperation. We must
each take on the responsibility to shed light on any
potential violations of the standards established in
this Handbook, or in any of our corporate policies. •Know and Follow the Level 3 Way. We must all review this Handbook and our policies
that apply in the regions where we work, and follow
those requirements. Since many provisions of this
Handbook and our policies are based on legal
requirements, violations may subject you and the
company to criminal and civil penalties, including
fines, jail sentences, and other possible sanctions.
From time to time, we all are required to certify that
we have reviewed this Handbook and our policies
and we have complied with both.
Although laws, regulations and cultural or business norms
may differ in the various countries in which we operate,
our core values and the requirements of this Handbook
apply to our business worldwide. It is important for us
If you are a manager, anyone who supervises one or
more employees, you have increased responsibilities.
Managers are expected to lead by example. Each
manager is responsible for ensuring that all employees
under his or her supervision are thoroughly familiar with
this Handbook and our policies, and are applying them
consistently in all business dealings.
If you are a manager, you must work to prevent violations
of this Handbook, our policies and the law. When
allegations of wrongdoing are brought to your attention,
you must report those allegations to the Chief Ethics and
Compliance Officer and assist in taking any appropriate
corrective or disciplinary action.
Violations of this Handbook or our policies could result
in corrective action being taken against you, up to and
including being fired. Any corrective action that we take
for violations of this Handbook will be consistent with
applicable local legal requirements. It is important to
note that this Handbook is not a contract of employment,
and does not create any contractual rights between
Level 3 and any employee.
When you’re unsure about a situation, ask questions. This Handbook is meant to provide you a broad and
clear understanding of the conduct that we expect
of every employee around the world. The Handbook
is not a summary of all of our policies or the laws
that apply to our business, and it doesn’t address
every situation that you may encounter. In the
end, there’s no substitute for good judgment and
common sense.
Ask yourself these questions when faced with one of
those “gray” areas, where the decision as to what is the
right thing to do is not clear:
•Is it legal?
•Is it permitted or prohibited by the Handbook or one
of our policies?
•How would it be viewed by one of my peers, a
customer, a supplier, an investor, or the general
public?
If you are unsure about the answers to these questions,
you should seek advice, and your manager is usually in
the best position to help guide your decisions. Managers
must show respect toward employees and maintain open,
honest and constructive two-way communication with
them. This means not only allowing, but also encouraging
employees to ask questions, make suggestions and report
concerns or wrongdoing. It’s important that each of our
managers must maintain an “open-door” policy regarding
ethics and compliance issues.
If you still have questions, it’s your responsibility to ask a
more senior manager, or to contact one of the resources
listed in the “Resources” section to get clarification. Each
of us is accountable for understanding and complying
with this Handbook, our policies, and any applicable laws.
It’s your responsibility to make sure you do so by asking a
manager or contacting one of the listed Resources when
you need guidance. So ask questions whenever things
aren’t so black and white.
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Conducting Business the Level 3 Way
WORKING WITHIN LEVEL 3
Promoting Respect
The strength of a global company is in its diversity
of employees. With employees located in nearly 50
countries around the world, our company has the
advantage of a very diverse workforce; diverse not
only in gender, race, creed, or nation of origin, but
diverse through the individuality of each of us. Each
of us brings our own ideas, perspectives, and skills
to the workplace.
Ensuring Safety
To capitalize on all those different ideas, perspectives
and skills, we must all treat each other with respect.
We should seek out ideas that are different from ours;
we should look at business challenges from different
perspectives. The way a task, process or project has
always been done may not be the best.
We strive to provide a safe work environment for
each employee – not only safe from discrimination
and harassment, but safe from physical harm as
well.
To that end, operations are evaluated to identify potential
health and safety hazards, and we then develop and
implement measures to minimize risk. When we are
working, we all need to exercise an appropriate level of
care, understand and comply with established safe work
practices, and observe appropriate safety precautions.
We prohibit discrimination and do not tolerate any
harassment, derogatory comments, or inappropriate
behavior based on a person’s sex, race, age, color, national
origin, sexual orientation, marital status, religious beliefs,
veteran status, any mental or physical disability, or any
protected physical or personal characteristic.
In addition, retaliation against any employee for reporting
alleged discrimination or harassment is strictly prohibited.
We also need to recognize, report and
work together to prevent certain acts
that could contribute to an unsafe work
environment, including:
•Physical fighting or quarrelling with other employees
(or customers, suppliers or visitors)
•Threats of physical violence
•Possession of dangerous or unauthorized materials
such as weapons or explosives
•Damaging or destroying company or anyone’s
personal property
•Intentional disregard for, and failure to implement,
required safe work practices that if not followed
could result in serious injuries to employees or others
•Reporting to work under the effects of alcohol or
any illegal stimulant, depressant, or hallucinogenic
substance
•Sale or use of alcoholic beverages on company
property (excluding sanctioned business events)
•Possession, sale or use of other illegal intoxicants on
company property
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Conducting Business the Level 3 Way
General Business Conduct
Each of us is expected to demonstrate the highest
degree of integrity, responsibility and professional
conduct at all times. Avoid any action that might
be harmful to you or another employee, could cause
an unfavorable reaction from current or potential
customers, or could cause embarrassment or
unfavorable publicity for you or Level 3.
Here are some other examples of conduct that
may be a violation of this Handbook:
•Misusing, destroying or damaging the
company’s electronic communications systems,
hardware or software
•Theft of property, including proprietary or
confidential information, from anyone (the
company, employees, customers, suppliers, etc.)
•Dishonesty in any form in connection with
work, falsification of any company documents,
or impeding any ongoing investigation
•Insubordination, including the willful refusal
or failure to comply with our policies or
management directives
•Immoral or illegal behavior on Level 3’s
premises or while conducting business on
behalf of the company elsewhere
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If you have a family member who
is able to influence a decision
regarding our business or who could
benefit from our business, it could
be a conflict of interest. Here is an
example for you to consider:
Conducting Business the Level 3 Way
Conflicts of Interest
In our business dealings each of us must always
consider how our outside interests or activities may
result in actual, potential or perceived conflicts of
interest, as well as cause harm or embarrassment
to Level 3. We must recognize and avoid those
situations where personal or financial interests
might influence, or appear to influence, our
judgment on matters affecting the company. While
we respect your privacy when you are conducting
your personal affairs, we expect you to act in
the best interests of Level 3 and to apply sound
judgment to avoid conflicts of interest.
Conflicts of interest can arise in a variety of different
circumstances and may exist in those situations where
your actions or activities permit you or a member of your
family to obtain improper personal gains or advantages
(sometimes at the expense of the company) or have an
adverse effect on the company’s interests.
It is almost impossible to list all facts that might create a
conflict of interest. Conflicts of interest can be difficult to
spot, and frequently require evaluation of a wide range
of facts to determine the appropriate path forward. The
following are general guidelines regarding the types
of situations that could be or might create a conflict of
interest.
•Having another job or other activity that affects your
ability to perform your Level 3 job duties
•Being a consultant or adviser for a competitor,
supplier, customer or other organization that
appropriate members of management deem to pose a
potential conflict of interest
•Having a family member who works for a competitor,
supplier, customer or other organization that we
deem to pose a potential conflict of interest.
•Acceptance of gifts, unusual entertainment, or other
favors (not including items of nominal value in
accordance with accepted business practices) from
any outside entity that does, or is seeking to do,
business with the company or is a competitor
•Misusing information you get or have access to as a
result of your job
•Owning or your immediate family member owning
a significant financial or ownership interest in any
current or potential competitor, supplier, or customer.
•Being a board of directors or advisory board member
for any of our customers, competitors, suppliers
or any entity which, to your knowledge, we are
investigating, or with which we are carrying on or
contemplating negotiations, for merger, consolidation,
acquisition or other business venture
Sally is one of the Level 3 employees responsible for
vetting providers of off-net circuits for Level 3. Sally’s
father is the head of network sales at Valley Telecom
Group, a carrier located in New York that can provide
off-net circuits that we need. Knowing that we need
an off-net circuit that Valley Telecom could provide,
Sally authorizes Level 3 to purchase circuits from Valley
Telecom without checking pricing and contract terms from
any other providers in the area. Does Sally have a conflict
of interest in this example? Yes, since Sally’s father can
benefit from her decision to select Valley Telecom for this
business. Sally needs to report the relationship to the Vice
President in charge of her function and to the Chief Ethics
and Compliance Officer before she selects Valley Telecom
as a Level 3 supplier. The Vice President and the Chief
Ethics and Compliance Officer will determine whether
Sally can be involved in the selection of Valley Telecom for
this business.
As a general rule, ownership interests in a public company that represent less than
one percent (1%) of the total outstanding equity of such a company, will generally
not be considered to be a significant financial or ownership interest in that company,
so long as the investment is not so large that it creates the appearance of a conflict
of interest. Conflicts caused by investments can require significant expertise to
analyze. If you are unsure, you can contact the Chief Ethics and Compliance Officer for
assistance.
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Conducting Business the Level 3 Way
Conflicts of Interest (continued)
Gifts and Business Entertainment
These requirements also apply to the members
of our Board of Directors when they are acting in
that capacity. Our Board members are prominent
individuals with substantial business activities
outside of Level 3. As a result, to avoid conflicts
of interest, the members of our Board of Directors
disclose to the Chairman of the Nominating and
Governance Committee and the Chief Ethics and
Compliance Officer any personal interest that they
may have in a transaction or business decision upon
which the Board passes, and recuse themselves
from participation in any decision in which there is
a conflict between their personal interests and our
interests.
When you have a situation
that you think is or might be a
conflict of interest, you must
report it to the Vice President
in charge of your function
and to the Chief Ethics and
Compliance Officer. They
will consider several factors
when deciding if a conflict of
interest exists:
Each of us owes Level 3 a duty to advance the company’s
legitimate business interests. So, you cannot do any of
the following without the approval of the Chief Ethics and
Compliance Officer (or, in cases involving our executive
management, the approval of our Board of Directors or an
appropriate committee):
•take for yourself business opportunities that are
discovered through the use of the company’s
property, information or your job
•use the company’s property, information or your job
for personal gain that is not related to the company’s
legitimate business interests
•compete with the company
•Are you or could you be in a position to influence the company’s
decisions with respect to the competitor, supplier or customer;
•Is your family member or could your family member be in a
position to influence a decision regarding the company’s business
with a competitor, supplier or customer
•Could your judgment be affected, or could it appear to be affected,
as it relates to the competitor, supplier or customer because of the
significance of your personal interest.
After a review of the facts and circumstances regarding the situation,
the Chief Ethics and Compliance Officer, in consultation with the Vice
President in charge of the function, will determine whether a conflict
of interest exists and what measures to take to remedy the conflict.
Because facts can change all the time, you must inform the Chief
Ethics and Compliance Officer and the Vice President in charge of your
function of any changes in the facts or any new situations that could
affect the initial decision.
In general, we may only accept gifts, favors, or
entertainment (which would include meals and
transportation) from anyone who wants to do
business with Level 3 if they are of nominal value,
unsolicited, are in accordance with accepted
business practices and would not be viewed as
seeking to improperly influence our business
decisions. Gifts and entertainment that do not meet
these criteria could be considered a bribe. 10
Simply put, we do not accept bribes. Also, there are
cases where accepting gifts could create a conflict of
interest. When you consider accepting gifts, favors or
entertainment, keep in mind that perceptions matter.
Even if you think that a particular gift is not improperly
influencing your business judgment, other people might
have a different perception. The perception of undue
influence can affect the company’s (and your) reputation.
Always consider the value, cost, and frequency of gifts
and entertainment. For example, if a current or potential
supplier pays for your lunch 25 times over two months,
it could be viewed as seeking to improperly influence
your decision even if each lunch costs a nominal amount.
Also, as a general rule you may never accept cash or
“cash equivalents,” which include gift cards, debit cards
or gift certificates, unless it is pursuant to a promotion or
program that has been approved by us.
The Chief Ethics and Compliance Officer
and your manager will consider several
things when deciding whether you can
accept a particular gift or entertainment,
including your job position and if you
could be in a position to influence the
company’s decisions with respect to the
giver of the gift or entertainment.
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Conducting Business the Level 3 Way
Conducting Business the Level 3 Way
Gifts and Business Entertainment (continued)
What is “nominal value?” This is another area where
good judgment and common sense are required. While the particular facts of each situation are very
important, in the case of a gift, our guideline for
nominal value is no more than US$50 (or your local
currency equivalent) in a calendar year from the
same organization. But, this is only a guideline.
In the case of entertainment, again the particular facts
of each situation are very important. In this case, our
guideline for nominal value is no more than US$200
(or your local currency equivalent) per occasion, per
person, unless approved by your regional president or the
executive vice president in charge of your function.
Other things to keep in mind when deciding if you can
accept business entertainment are:
•Is the business entertainment being offered in the
normal course of our business?
•Will a representative of the vendor be attending?
•Is the business entertainment taking place at a
location and in a manner that does not violate any
other provisions of the Handbook or risk damaging
your or Level 3’s reputation? For example, adult
entertainment is never acceptable.
If you cannot answer “yes” to all of these questions, you
should decline the invitation.
What happens when part of the offered gift or entertainment is above nominal value? For
example, you are invited to attend a legitimate business meeting at a resort destination, with the
meeting host providing spa treatments, ski tickets or other items that are not of nominal value.
In this case, it is likely appropriate to attend the business meeting, but decline to participate in or
accept the non-business meeting portions of the event.
This is an area where there are many “gray zone”
questions regarding what is acceptable. If you are unsure
how to value a particular gift or entertainment or whether
accepting a particular gift or entertainment will be in
compliance with this Handbook, you are expected to
consult with your manager and, when appropriate, the
Chief Ethics and Compliance Officer.
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Conducting Business the Level 3 Way
Full Disclosure and Records Management
In our day-to-day work, many of us create
communications and documents or records that
need to be retained to ensure we are in compliance
with applicable law and to achieve our business
objectives. .
We require full, fair, accurate, timely and understandable
disclosure in the periodic reports that we file with
government agencies and in our other communications
with our investors and the public generally. Each of us
must be committed to the integrity and completeness
of our corporate recordkeeping. We also maintain an
effective worldwide system of policies, processes and
procedures that are sometimes called “internal controls”
to ensure that we properly record all of our business
transactions in our accounting books and records. Each of
us is required to adhere to these internal controls.
We specifically prohibit fraud in any transaction or
communication by any of us. The improper alteration,
destruction, concealment or falsification of records or
documents is strictly prohibited.
All employees who create and use records and
information (data, documents, or records that are
created, received, or maintained as part of our business
activities) are responsible for maintaining these records in
accordance with the requirements of our record retention
policy as it may be in effect from time to time.
In the event that you are responsible for executing and
managing contracts where Level 3 is a party, you should
assure that the Legal Department is provided with full and
complete copies of any contracts and amendments.
When we make entries in our books, records and
accounts, we must support those entries with
appropriately adequate documentation. In this way,
our entries will provide a complete, accurate, and
auditable record. We will only enter into transactions
pursuant to our management’s specific authorization
or established formalized policies and procedures. All
of our accounting entries will be coded into an account
that accurately and fairly reflects the true nature of the
transaction. Secret activities invite misconduct, while full
disclosure reinforces responsibility and acts as a powerful
deterrent to wrongdoing. Therefore, we strictly prohibit
any undisclosed or unrecorded transactions other than
those mandated by law in accordance with government
mandated procedures.
All of us are required to provide accurate and complete
information to our officers, legal counsel, internal
auditors, independent auditors and any other person
authorized to receive the information, especially in the
case when we are asked to provide the information as
part of an investigation of any possible violations of this
Handbook.
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WORKING EXTERNALLY
Compliance with Laws
Fair Dealing and Fair Competition
Competition Laws
It is our policy to comply with all laws, rules and
regulations that are applicable to our business in all
countries in which we operate. .
.
As a result, our funds and assets must not be used for any
unlawful or improper purpose. Because the application
of particular laws, rules and regulations to our business
may be unclear, you should obtain advice from our Legal
Department to ensure full compliance with all applicable
laws, rules and regulations.
In our dealings with people outside of the company,
we must always:
Our policy is to comply fully, and to ensure that
each of us as individuals complies fully, with the
letter and the spirit of all applicable antitrust and
competition laws of the countries where we conduct
our business.
•accurately describe our products, services, and prices
•accurately represent our identity and authority on
behalf of the company
•avoid financial relationships with customers or
suppliers – explicit or implied – involving kickbacks,
commission sharing, reciprocal purchases, or similar
arrangements
While we’ll compete vigorously for business based
on the strength of our products and services and the
commitment of our employees, we’ll also conduct
competitive marketing activities fairly and honestly. To
that end, we must always:
•sell products and services on the basis of quality and
value to our customers
•obtain appropriate authorization from customers and
prospective customers prior to installing or changing
services
•terminate services only when authorized by a
customer or as permitted by our agreements and
applicable laws
•avoid attempting to induce a customer to breach
an order or contract with a competitor except in
accordance with the provisions for cancellation of the
order or contract
•avoid attempting to obtain competitive information
through improper means
•refrain from unfairly disparaging competitors’
products, personnel, or services – either directly or
indirectly.
Generally, antitrust and competition laws prohibit
practices that might unreasonably restrict competition.
Agreements with competitors regarding fixing prices for
our services, deciding how to divide or split a market
opportunity, and limitations on how much we can sell
are generally prohibited by these laws and violators are
subject to criminal sanctions in the form of fines and
imprisonment.
If you are involved in transactions with any of our
competitors or potential competitors or regularly interact
with any of our competitors or potential competitors
through trade associations or by speaking at industry
conferences, you should be aware of antitrust and
competition laws that may apply to these activities. If you
are unsure how these laws may affect how you perform
your job, you should ask your manager or get advice from
the Legal Department before negotiating with or entering
into any agreement with a competitor or potential
competitor.
Antitrust and competition laws apply to both corporations
and individuals, and can be violated by both corporations
and individuals. Anyone who violates or helps someone
else violate these laws may be subject to criminal
prosecution, imprisonment and fines. Remember that
if your actions are a violation of these laws, it may also
result in Level 3 being prosecuted criminally and fined or
sued for substantial civil damages.
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Conducting Business the Level 3 Way
Anti-Bribery Laws
Just as is the case when we are offered gifts,
favors and business entertainment, we need
to ensure that when we offer gifts, favors and
business entertainment to others our actions are
in accordance with accepted business practices
and would not be viewed as seeking to improperly
influence their decisions relating to Level 3. This
is especially true when we are dealing with
government officials. .
Here are some examples
of actions that could be
considered bribes or kickbacks:
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Conducting Business the Level 3 Way
If we are not very careful in this area, providing a gift or
entertainment could be considered to be the payment of
a bribe. We do not pay bribes. And, as is the case with
receiving gifts and entertainment, if it appears that we are
seeking to improperly influence someone else’s decisions,
our reputation will suffer and, in some cases, we may
have violated the law.
We are committed to complying with all applicable
anti-bribery laws in all countries in which we operate.
These laws prohibit improper payments, such as bribes
and kickbacks, as well as offers or promises to make
improper payments, whether or not the offer or promise is
successful. Remember, bribes and kickbacks can also take
the form of improper gifts, favors or entertainment.
•gifts, favors or entertainment that are not of nominal value or not
otherwise in accordance with accepted business practices
•gifts, favors or entertainment provided to the family member
of a government official or someone that we are seeking to do
business with
•cash payments to government officials or business contacts by any
of us or agents, suppliers, customers or consultants on our behalf
•the uncompensated use of our services, facilities or property,
except as may be expressly authorized
•charitable contributions that are made to influence a government
official or someone that we are seeking to do business with
•loans, loan guarantees or other extensions of credit to a
government official or someone that we are seeking to do
business with
Anti-bribery laws include the U.S. Foreign Corrupt
Practices Act (FCPA), the U.K. Bribery Act and other
laws enacted to combat bribery of government officials
as well as non-government business partners in all
countries in which we operate. Since we have significant
activity around the world, it is very important that we all
understand the actions that are prohibited by the FCPA,
the U.K. Bribery Act of 2010 and other anti-bribery laws.
Bribes and kickbacks, including offers or promises to
make any improper payments, are illegal and against our
policy. This is true even if a third party (such as an agent
or consultant) acting on our behalf does it for us. Since
we are responsible for the actions of the third parties that
we hire, we must take appropriate actions to investigate
these third parties so that we are sure that they do not
pay bribes or kickbacks.
The U.K. Bribery Act of 2010 applies to
corruption aimed at both government
officials and private citizens. Under that
law it is a crime to directly or indirectly
promise, give or request a financial
or other advantage with the intent or
belief that the advantage will cause the
recipient to act in a way that is improper
for them to act.
Under this law, it is also a crime to directly or
indirectly offer, promise or give a financial or other
advantage to a government official if there is an
intent or belief that the advantage will influence the
government official to act in a way that is improper.
The U.K. Bribery Act applies to activities both in the
United Kingdom and outside the United Kingdom,
when those actions outside the United Kingdom are
taken by those with a close connection to the U.K.
– which includes British citizens and U.K. residents.
Also, Level 3 can be prosecuted if a person associated
with it bribes another person intending to get or keep
business for Level 3. The law can also be violated
if someone else – such as one of our contractors or
agents – delivers the advantage on our behalf.
It is very difficult to provide a complete list of
the actions that would be “financial or other
advantages,” who would be a government official
and the criteria of who has a “close connection to
the U.K.” And the determination of whether behavior
is “improper” is based on what would be expected
of a reasonable person in the UK, regardless of local
customs. So, you should be sure to seek advice from
the Legal Department if there is any doubt about
whether or how the law applies to your business
dealings.
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Conducting Business the Level 3 Way
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Conducting Business the Level 3 Way
In October 2012, The Wall Street Journal reported that “Allegations of bribing overseas officials have already
cost Avon Products Inc., Weatherford International Ltd. and Wal-Mart Stores Inc. nearly half a billion dollars. And
they haven’t been charged. Under widespread practice, companies often spend millions of dollars investigating
themselves for potential violations of the [FCPA] . . . . The combined $456 million spent by those three companies
largely went to law firms and other professionals hired to conduct the probes and fortify the companies’ internal
anti-bribery controls.”
Anti-Bribery Laws (continued)
We do not make improper payments, including
bribes or kickbacks, to anyone, whether or not
the recipient is employed by a non-governmental
business entity or is considered a government
official. We also do not pay “small” bribes that are
paid to facilitate routine government action and
are sometimes called “facilitation” or “grease”
payments.
While many enforcement
actions by U.S. regulators
involve the payment of bribes
to secure government contracts,
here are some examples from
the U.S. government where the
payment of a bribe to secure
any of the following would be a
violation of the FCPA:
We need to be very careful in our interactions with
government officials, because what might be permitted
when giving a gift or entertainment to a non-government
official may not be permitted when the recipient is a
government official. The term “government official” is
used broadly in many anti-bribery laws. It includes people
employed by state-owned commercial enterprises, such
as state-owned or state-controlled telecommunications
companies, oil companies or airlines. The term also
includes people acting on behalf of government agencies
and departments, and public international organizations.
Political parties, party officials and candidates for political
office can also be considered government officials. Since
the definition of who is a government official is very
broad, you should consult the Legal Department or the
Chief Ethics and Compliance Officer if you are unsure
whether someone should be considered a government
official.
•winning a contract
•influencing the procurement process
•circumventing the rules for importing products or equipment
•gaining access to non-public tender information
•avoiding contract terminations
We need to be very concerned about any requests for large discounts or
excessive commissions and requests for the payment of large sums in
cash or to off-shore bank accounts. You should also be aware of close
family or business relationships between an agent that you are working
with and any high-ranking foreign official.
The FCPA prohibits a U.S. company, its stockholders, board
of directors, agents, officers and employees from paying or
authorizing the payment of any money or giving anything
of value, directly or indirectly, to a non-U.S. government
official to:
•influence any act or decision by the government
official; or
•induce the government official to use his or her
influence to assist in obtaining business for or
directing business to any person
We need to be careful when the customer or prospective
customer is a governmental entity. Since government
officials are obligated to follow specific codes of conduct
and laws, special care must be taken in government
procurement activities. Government departments and
agencies are often governed by laws and regulations
concerning entertainment, meals, gifts, gratuities and
other things of value given by companies and people with
whom those government departments and agencies do
business or over whom they have regulatory authority.
It is our policy to comply strictly with those laws and
regulations.
It is very difficult to identify a “bright-line” test of precise
facts that would cause a violation of anti-bribery laws.
So, you will need to complete periodic training that we
will provide to help you understand the circumstances
that can create violations under these laws, and you
should be sure to seek advice from the Legal Department
if there is any doubt about whether or how these laws
applies to your business dealings.
Our restrictions to avoid the payments
of bribes and kickbacks to government
officials do not affect your individual
right, when not acting as our employee,
to support political parties or candidates
of your choice.
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Conducting Business the Level 3 Way
22
Conducting Business the Level 3 Way
Our common stock is traded on the
NYSE under the symbol LVLT.
Confidential Information and Privacy
In doing our jobs, each of us may have access to
information that relates to our business, customers,
suppliers, or competitors. Some of us also have
access to information about each other. We must
exercise care to protect the confidentiality of
this information. We are strictly prohibited from
using or sharing any confidential or proprietary
information unless it is necessary to perform our
duties. An exception to this general rule is if the
disclosure is required or mandated by law or you are
otherwise told to do so by the Legal Department.
Insider Trading
We are all committed to protecting the privacy and
security of Personally Identifiable Information (PII) of our
employees, as well as any PII for customers or suppliers.
PII is defined as the name of any person in conjunction
with that person’s Social Security number, national
identification number, driver’s license number or medical
information, and in some circumstances a person’s credit
card or financial account number.
Each of us must take all appropriate proactive measures
to prevent the improper disclosure or use of confidential
information, and none of us may try to disable or
circumvent any of these protective measures that are in
place.
As employees of a telecommunications company we all
have an obligation to keep our customers’ conversations,
calling records and data transfers confidential. It is the
responsibility of each employee to maintain the privacy
of information conveyed on the Level 3 network. Most
countries have laws protecting the confidentiality of
customers’ messages.
If you are unsure if information is confidential or nonpublic, you should consult your manager or seek advice
from the Legal Department. Also, if you have any doubts
about what customer specific information may be
disclosed or if you receive legal papers such as subpoenas,
court orders or the like, consult with a representative of
the Legal Department before sharing that information
with anyone outside of Level 3.
Since Level 3 is a public company with shares
trading on the New York Stock Exchange (NYSE),
we are subject to periodic reporting requirements
and applicable rules of the Securities and Exchange
Commission (SEC). Any employee in possession
of, or having knowledge of, material, non-public
information is prohibited in trading our securities
or disclosing that information to any person. This is
sometime called trading on “inside” information.
In addition to not being able to trade securities when you
have material inside information, you cannot share that
information with anyone else including friends, relatives,
fellow employees and our customers and/or suppliers.
That is sometimes called “tipping.”
“Material” information includes any information that
would influence a reasonable investor to trade (or not to
trade) in securities. Examples of “material information”
can be information relating to Level 3’s earnings or
financial and performance guidance, as well as a
proposed merger, acquisition, important contract, or a
change in upper management.
Also, many employees are subject to special rules when
it comes to buying or selling Level 3 securities. These
employees can only buy or sell our securities during
limited periods or “windows” following the release of
quarterly or annual earnings information. If you are
unsure if you are subject to these special trading rules,
you should consult your manager or seek advice from the
Chief Ethics and Compliance Officer.
People who trade using material inside information, as
well as people who tip others, could be subject to civil
and criminal proceedings.
In May 2012, the Securities and Exchange Commission (SEC) announced that a former executive at Yahoo! Inc. and a
former mutual fund manager at a subsidiary of Ameriprise Financial Inc. used confidential information about a search
engine partnership between Yahoo and Microsoft Corporation in violation of the U.S. federal securities laws. The Yahoo
employee, who was a senior director of business management, was charged with telling the Ameriprise employee that
a search engine deal between Yahoo and Microsoft would be announced soon. The Ameriprise employee had reached
out to the Yahoo employee amid market rumors of an impending partnership between the two companies, and the
Yahoo employee indicated that the information was kept quiet at Yahoo and only a few people knew of the coming
announcement. Based on the Yahoo employee’s illegal tip, the Ameriprise employee prompted the mutual funds she
managed to buy more than 700,000 shares of Yahoo stock that were later sold for profits of approximately $389,000.
The Yahoo employee pled guilty to conspiracy to commit securities fraud, and the Ameriprise employee pled guilty to
both insider trading and conspiracy to commit securities fraud.
23
Conducting Business the Level 3 Way
Conducting Business the Level 3 Way
A GLOBAL PERSPECTIVE
Level 3 and Corporate Social Responsibility
Level 3 is fortunate to be part of communities
around the world that support our company and our
growth. We believe being part of those communities
brings with it the responsibility to support them as
well. As a result, we maintain a Corporate Social
Responsibility program called “Level 3 Cares,” which
focuses on education, the natural environment,
and on serving the underprivileged. The Level 3
Cares program includes three components: Level 3
Volunteers, Level 3 Environmental Sustainability and
Level 3 Gives.
Level 3 Volunteers is our way of supporting and
encouraging our employees who choose to actively
volunteer and give back to their communities. The
program offers our employees at least eight hours of paid
volunteer time to dedicate to whatever cause is important
to them.
Level 3 Environmental Sustainability represents our
commitment to protect and improve the environment.
We identify local environmental efforts and through
our community relationships work towards a common
environmental goal. Through this program we also strive
to improve the environmental effect of our business
operations in the local communities where we operate.
Level 3 Gives provides funding to assist community
initiatives that are important to our employees and
builds upon our volunteer program. We believe that our
employees’ time, energy and expertise are valuable to
our communities, but we also understand that nonprofits
need funds to support the good work they do.
Level 3 supports nonprofit organizations that specifically
improve and enhance our natural environment, provide
educational or job/career development opportunities, or
seek to serve the needs of the underprivileged people
within our communities. All grant requests must be
requested by an employee, and the requesting employee
must be personally involved with the organization that is
the potential recipient of the grant.
For more information on the Level 3 Cares program,
please see the Level 3 Cares section of Next Level.
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25
Conducting Business the Level 3 Way
26
Conducting Business the Level 3 Way
WHEN THINGS GO WRONG
Reporting Violations
All employees must report violations of this
Handbook, our policies or the law. The report
should be made to your immediate manager who,
in turn, must report it to the Vice President of the
functional area that you work in and our Chief
Ethics and Compliance Officer. The report can also
be made directly to our Chief Ethics and Compliance
Officer, Neil J. Eckstein, at +1.720.888.2514 or neil.
[email protected].
We also have in place an anonymous and confidential
incident reporting system that is maintained by an
independent company. Where allowed by local laws,
you can use this service if you do not feel comfortable
reporting an actual or potential violation of the Handbook
to your manager or the Chief Ethics and Compliance
Officer. You may contact the service toll free in the U.S. at
+1.800.461.9330 , by accessing the Level 3 Compliance
Line through Next Level > The Level 3 Way > Level 3
Compliance Line or by logging in to compliancereport.
level3.com.
Enforcement
Both of these avenues are available to you 24x7. You
can also find telephone numbers to call the service
from countries around the world by going to www.
compliancereport.level3.com. It is often more difficult
to investigate a concern that is raised anonymously. So,
please think about talking directly with your manager or
the Chief Ethics and Compliance Officer or sharing your
identity when using the independent reporting system.
Your identity will be kept confidential to the extent that
possible and consistent with applicable laws.
Concerns regarding potential accounting, internal
accounting controls and/or auditing matters may be sent
directly to our Senior Vice President of Internal Audit,
Walter Honeycutt at +1.720.888.6155 walter.honeycutt@
level3.com.
As a result of differences in the laws and regulations regarding data
protection in France and Germany, if you are an employee in those countries,
you should not feel under any compulsion to use the processes that we have
included in Handbook (including anonymous incident reporting) to report
violations. If you are an employee in France or Germany you can contact the
Chief Ethics and Compliance Officer to discuss any potential violations.
You are encouraged to raise any concerns, problems,
or complaints concerning anything in this Handbook,
any of our policies or other workplace matters with
your manager through our “open door” approach. All of our managers are responsible for working
together with their direct reports to resolve, to the
extent possible, any work-related problems their
employees may have.
Obviously, your manager must be aware of the problem
before he or she can do anything about it. We believe that
a majority of all employee problems and concerns can
be resolved through direct communication between the
employee and the manager.
In certain circumstances, such as those that involve the
manager directly, you may not feel comfortable bringing
a complaint to your manager. In these circumstances, you
may report the complaint directly to your team’s Human
Resources representative, the Chief Ethics and Compliance
Officer or the Level 3 Compliance Line service.
After an appropriate investigation of any alleged
violation, Level 3 will determine whether a violation of the
Handbook has occurred and, if so, whether and to what
extent any corrective action will be taken. Level 3 will
consistently enforce the Handbook through appropriate
actions, up to and including firing an employee from their
job.
In addition to the violator, employees subject to corrective
action may include others involved in the wrongdoing
such as:
•anyone who fails to use reasonable care to detect a
violation of the Handbook;
•anyone who, if requested to give information,
withholds material information regarding a violation
of the Handbook; and
•managers who approve or condone conduct that is in
violation of the Handbook.
In addition, we may in certain cases report violations
to appropriate law enforcement agencies to determine
whether additional civil and/or criminal proceedings are
appropriate.
While we will be true to the guiding principles of our
core values, we also realize that if any requirements
of this Handbook or our policies is considered invalid
under particular local laws, it should be understood to
be inapplicable and not included with respect to our
operations in that specific country. A good example
of this relates to reporting violations of this Handbook
or our policies anonymously. Some countries have
laws that prohibit reporting a violation anonymously.
We will respect those laws.
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Conducting Business the Level 3 Way
Conducting Business the Level 3 Way
Investigations
Retaliation Prohibitions
Waivers
Level 3 strictly prohibits and will not tolerate
retaliation against anyone who makes a good faith
report of an ethical or legal concern. Any employee
engaging in retaliatory conduct will be subject to
corrective action, up to and including being fired.
If you suspect that you or someone you know has
been retaliated against for raising an ethics or
compliance issue, immediately contact the Chief
Ethics and Compliance Officer.
Level 3 may, in its sole discretion, grant waivers
of the provisions of the Handbook from time
to time after completing a review the facts and
circumstances related to the requested waiver.
Waivers are only effective if set forth in writing
after full disclosure of the facts and circumstances
surrounding the waiver. We will investigate good faith allegations of
violations of the Handbook, our policies and the
law. We take good faith allegations of improper
conduct by the company and our employees very
seriously, and employees must cooperate fully
with any investigations into these allegations. It is
a violation of this Handbook and our policies for
anyone to interfere with or knowingly provide false
information in the course of an investigation.
In connection with any investigation of a reported
violation or possible violation of the Handbook or our
policies, you must not:
•interfere with the investigation, by providing false,
misleading or incomplete information, concealing
information or encouraging others not to contribute
to an investigation or;
•destroy or alter any information relevant to the
investigation.
We take claims of retaliation seriously. Allegations of
retaliation will be investigated and appropriate action will
be taken. Our prohibition of retaliation does not mean
that you can protect yourself from the consequences of
your own misconduct by self-reporting. However, we do
encourage self-reporting and may take such an action into
account when assessing the appropriate corrective action.
If a report is made in “bad faith” – for instance, if a false
or misleading report is made in a deliberate effort to get
someone in trouble or is otherwise not made in good faith
(as opposed to an honest mistake) – the person making
the report may be subject to corrective action. Corrective
action in the case of a bad faith report of a violation will
not be considered retaliation.
If you believe that a waiver is necessary or appropriate,
you need to submit a written request for a waiver that
includes reasons for the request. The request should be
sent to the Chief Ethics and Compliance Officer.
An executive officer (which includes the Chief Executive
Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, any Executive Vice President, the
Chief Legal Officer and the Controller) or a member of the
Board of Directors must submit the request for a waiver
to the Chairman of the Nominating and Governance
Committee of our Board of Directors, with a copy to the
Chief Legal Officer and the Chief Ethics and Compliance
Officer. Any waiver of the Handbook for executive officers
and members of our Board of Directors can only be
granted by the Board of Directors or a duly authorized
committee of the Board of Directors and will be disclosed
promptly to our investors.
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Conducting Business the Level 3 Way
WHEN YOU NEED HELP
Resources
You should always feel free to discuss questions
regarding this Handbook and our policies with your
manager, Human Resources representative or the
Chief Ethics and Compliance Officer. You can also
find the various policies that apply to your region
under the Human Resources section of Next Level.
HUMAN RESOURCES
CHIEF ETHICS AND
COMPLIANCE OFFICER
SENIOR VICE PRESIDENT
INTERNAL AUDIT
AUDIT COMMITTEE OF THE
LEVEL 3 COMMUNICATIONS,
INC. BOARD OF DIRECTORS
U.S.:
The following resources also exist within Level 3 to help
you and to help get your questions answered.
+1-720-888-MYHR (6947)
[email protected]
LEGAL
Chief Legal Officer: John Ryan
+1-720-888-6150
[email protected]
+1 (720) 888-2533
[email protected]
EMEA:
+44 (20) 7954 2288
[email protected]
General Counsel North America: Lon Licata
LATAM:
[email protected]
General Counsel EMEA: John McCarthy
+44 (33) 0060 7448
[email protected]
General Counsel LATAM: Valeria Plastino
+54 11 5170 3552
[email protected]
Neil Eckstein
Walter Honeycutt
+1 (720) 888-2514
[email protected]
+1 (720) 888-6155
[email protected]
[email protected]
CONFIDENTIAL REPORTING
Level 3 Compliance Line
+1 (800) 461-9330
Next Level > The Level 3 Way > Level 3
Compliance Line
compliancereport.level3.com
When the difference between right and wrong is black and white, this Handbook provides the guidance for
what to do in those situations. But, since other times there are many shades of gray, and this can make it more
complicated to know exactly what’s right, this Handbook provides guidance on our core values, the questions to
ask and the resources that are available to you to address your questions and concerns. Taken together, it is the
Level 3 Way for conducting our business around the world.
This Worldwide Code of Business Conduct Handbook applies in its entirety to all employees of Level 3
Communications, Inc., including employees of all of its subsidiaries around the world and the non-employee
members of the Board of Directors when they are acting in that capacity. However, only the following
sections are deemed to be the Code of Ethics for purposes of the rules of the U.S. Securities and Exchange
Commission and the listing standards of the New York Stock Exchange: What Is Expected of Us?; Ask
Questions and Raise Concerns; Promoting Respect; General Business Conduct; Conflicts of Interest; Gifts
and Entertainment; Full Disclosure of Records Management; Compliance with Laws; Fair Dealing and
Fair Competition; Competition Laws; Anti-Bribery Laws; Confidential Information and Privacy; and Insider
Trading. All sections not listed above and all examples or summaries of news stories or government
investigations are not included in the Code of Ethics.
Effective: March 18, 2013