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Notice: The information contained herein is the property of Kennametal Inc. and/or a Kennametal Inc. subsidiary, andmay contain proprietary or trade secret information and intellectual property rights. It has been submitted to you in
confidence for use internally within Kennametal for a specific purpose and may only be used for that purpose. The
reproduction, distribution and utilization of this Policy, in whole or in part, as well as the communication of any of its
contents to any unauthorized individuals is prohibited. All rights reserved.

This page is a record of allrevisions of the Policy.

REV
00
01
02

BY
DWG
PJW
SAR

PAGES
1-10
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For convenience, the nature of the revision is briefly noted underremarks. Please review the attached policy to assure complete
understanding of all relevant changes, additions, or deletions. Unlessotherwise stated, this revision should be implemented upon receipt.

REMARKS
Original Release.
Revision
Reviewed and updated; revised third party due diligence process; revision supersedes
prior versions.

REVISSUED BY

APPROVED BYAPPROVAL DATE

00

Roxanne TurnerDavid W. Greenfield

08/01/2007

01

Paul J. Ward

Kevin G. Nowe11/01/2013

02

Seth A. Rice

Michelle R. Keating

8/13/2017

The electronic version of this PolicyPolicy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.

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KENNAMETAL INC. GLOBAL ANTI-CORRUPTION
AND ANTI-BRIBERY POLICYGLOBAL ANTI-CORRUPTION AND ANTI-BRIBERY POLICYI.

SCOPE AND APPLICABILITY

The Global Anti-Corruption and Anti-Bribery Policy (the “Policy”) applies to all
directors, officers and employees of Kennametal Inc., its subsidiaries and affiliatedcompanies (the “Company” or “Kennametal”) and its sales agents, representatives, anddistributors globally (collectively referred to as “Third Parties”). All other parties providing
goods or services to Kennametal anywhere in the world are subject to the Global Sourcing
Policy, which includes compliance with Global Anti-Corruption Laws (defined below) andapplicable Company policies and procedures.
This Policy, Kennametal’s Code of Conduct, and information on how to contact the
Office of the General Counsel or report a question or concern is available on
Kennametal’s
external
ethicsandcompliancewebsiteathttps://www.kennametal.com/en/about-us/ethics-and-compliance.html
orhttps://secure.ethicspoint.com/domain/media/en/gui/48375/index.html.
This Policy and all global compliance policies and procedures issued by the Officeof Ethics and Compliance are available to all team members on the Policies SharePointsite accessible from The Hub intranet global homepage.
II.

DEFINITIONS“Government Official” broadly includes an officer or employee of a government or
any department, agency, or political party of a government, any official of a political partyor candidate for political office or of a public international organization (such as the United
Nations), or any person acting in an official capacity for or on behalf of any of them. An
employee of a state owned or public sector enterprise or company may be a “government
official” under the U.S. Foreign Corruption Practices Act and other Global Anti-Corruption
Laws.
“Global Anti-Corruption Laws” broadly includes all applicable local, national, andinternational anti-corruption and anti-bribery laws and regulations, including the UnitedStates Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010, andany updates or amendments thereto.

The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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KENNAMETAL INC. GLOBAL ANTI-CORRUPTION
AND ANTI-BRIBERY POLICYCOMMITMENT TO COMPLIANCE

Kennametal is committed to complying with all applicable Global Anti-Corruption
Laws wherever it operates. It is the responsibility of all Kennametal directors, officers,
employees and Third Parties to know about, understand and comply with such laws andregulations in all aspects of Kennametal’s business. This includes compliance with rules
requiring the complete and accurate maintenance of financial books, records, andaccounts involving both foreign and domestic payments and transactions.
To ensure a consistent global standard of conduct, Kennametal strictly prohibits
its directors, officers, employees, and Third Parties from offering, accepting, or promising
to offer or accept (for both Government Officials and private parties), bribes, improper
payments, or inducements of any kind to obtain or retain business, or to gain an unfair
business advantage. This policy applies across all Kennametal operations
regardless of whether or not the conduct may be lawful in a given country or
location.
Kennametal is committed to complying with all applicable Global Anti-Corruption
Laws that apply to its operations. By law, as a United States (“U.S.”) based company, all
Kennametal directors, officers, and employees, regardless of citizenship or location, mustcomply with the U.S. Foreign Corrupt Practices Act of 1977 (the "FCPA"). Additionally,
because Kennametal has business operations in the United Kingdom (“U.K.”), all
Kennametal directors, officers, and employees must comply with the U.K. Bribery Act of2010 (“UK Bribery Act”).
Questions regarding this Policy, Global Anti-Corruption Laws, or whether an action
or decision is permissible, must be directed to the Office of the General Counsel prior toproceeding with any action or decision. See the “Obligation to Report” section of thisPolicy for more information on how to obtain guidance.
IV.

REPORTING CONCERNS & SEEKING GUIDANCE
A. Who Must Report:
1. Employees: Employees must immediately report any suspected or
actual violations of Global Anti-Corruption Laws, this Policy, or the Codeof Conduct to Kennametal’s Office of the General Counsel. Once an
employee has made a report, the employee also has an obligation to
update the report as new information comes into his or her possession.
The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.

Form: KMT0002F01 R02 (12/2008)

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Under no circumstances shall the reporting of any such information
serve as a basis for retaliatory actions against the employee making thereport if that employee has acted in good faith. See Kennametal’s NonRetaliation and Reporting Policy, available on the Policies SharePointsite.
2. Third Parties: All Third Parties are expected to report any suspected or
actual violations of Global Anti-Corruption Laws or this Policy to either
their Kennametal business contact or Kennametal’s Office of theGeneral Counsel.
B.

How to Report:
1.
Office of the General Counsel: 600 Grant Street, Suite 5100,
Pittsburgh, PA U.S.A. 15219; +1 (412) 248-8309 or +1 (412) 2488275; k-corp.ethics@kennametal.com
2.
Kennametal Helpline (reports can be made anonymously where
allowed by law) https://kennametal.ethicspoint.com or by calling thetelephone access number for your country on Kennametal’s external
ethicsandcompliancewebsite(https://www.kennametal.com/en/about-us/ethics-andcompliance.html).

V.

IMPROPER PAYMENTS AND BUSINESS COURTESIES
A. Prohibition on Improperly Influencing Business Decisions

1. Payments, Business Courtesies (including gifts and entertainment) or“Anything of Value”: no offers, payments, promises to pay or authorizations to pay
any money, make any business courtesies or provide anything of value may bemade by or on behalf of the Company to any Government Official, governmentowned (or even partially government-owned) company, private company or anyone
affiliated with a private company doing business with Kennametal anywhere in theworld, except when authorized by this Policy and the Global Business Gifts andEntertainment Policy (posted on the Policies SharePoint site on The Hub).

The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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All gifts and entertainment involving government officials or governmentowned entities are prohibited, regardless of value, unless advance written approvalis provided by the Office of the General Counsel.
The following are prohibited activities under this Policy:(i) Improperly influencing any act or decision of such person or party in his,her or its official capacity;(ii) Improperly inducing such person or party to do or omit to do any act that
violates that person’s or party’s lawful duty; or(iii) Improperly inducing such person or party to use influence with agovernment or organization to affect or influence any act or decision ofsuch government or organization.
2. Level of Knowledge Required for a Violation of Law: Actual knowledge of aviolation is not required to violate the Global Anti-Corruption Laws. If an individual knowsor has reason to know that an illegal act is likely to occur or is aware of a high probabilityof the existence of corrupt conduct by a Third Party, there may be a violation of one ormore of the Global Anti-Corruption Laws. Deliberate avoidance of knowledge, willful
blindness or conscious disregard of such knowledge may result in both the Company andthe individual being deemed to have knowledge of the unlawful action.
3. Red Flags of Potential Corrupt Activity: the following are examples ofactivity that may indicate a “high probability” of a Global Anti-Corruption Law violation andmust be promptly brought to the Office of the General Counsel for further guidance:







Excessive commissions to third-party agents or consultants;
Unreasonably large discounts to third-party distributors;
Third-party ‘consulting agreements’ that include only vague descriptionsof service;
Third-party consultant is in a different line of business than that for which
it has been engaged;
Third-party is related to or closely associated with a Government Official;
Third-party became part of the transaction at the express request or
insistence of a Government Official;
The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.

Form: KMT0002F01 R02 (12/2008)

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Third-party is merely a shell company incorporated in an offshore
jurisdiction; andThird-party requests advance payment or payment to offshore bankaccounts.

B. Prohibition on Facilitation Payments
A “facilitation payment” (also known as a “grease payment”) is a small payment toa government official or clerk, which is primarily made for the purpose of expediting or
ensuring the performance of a routine, non-discretionary government function.
Facilitation payments are illegal under some Global Anti-Corruption Laws, andKennametal therefore prohibits facilitation payments. A few examples of situations
where facilitation payments may occur in order to expedite a function, yet are prohibited
include: (i) obtaining permits or travel visas; (ii) connecting electricity or telephoneservice; and (iii) obtaining police protection. Immediately contact the Office of the GeneralCounsel with any questions regarding facilitation payments.
C. Gifts, Entertainment and Hospitality
Kennametal prohibits offering or promising to offer improper gifts, entertainmentand hospitality, such as the payment of hotel, transportation, meal and entertainment
expenses, to both government and private company officials. Kennametal’s Global
Business Gift and Entertainment Policy (posted on the Policies SharePoint site on The
Hub) defines when and how gifts and entertainment can be offered and accepted by
Kennametal employees. Under approved circumstances, certain reasonable hospitality,
nominal gifts and entertainment may be offered for legitimate business purposes.
Gifts, entertainment and hospitality must be:

In compliance with Kennametal’s Global Business Gifts and Entertainment
Policy (with necessary pre-approvals, where required) and the Company’s
Code of Conduct;

In compliance with applicable Kennametal travel and expense policies;Directly related to the Company's business, be of a reasonable amount, andprovided in good faith;
The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.

Form: KMT0002F01 R02 (12/2008)

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Any hospitality, travel, gift, or entertainment involving a government official or
employee of a state-owned entity must be pre-approved by the Office of theGeneral Counsel, regardless of value;Permitted under the local law of the applicable country; andGifts bearing the Company logo or other items must be of small monetary
value and distributed for approved promotional or commemorative purposes
only (unless exceptions are approved under the Global Business Gifts andEntertainment Policy).

D.

Prohibition on Cash and Cash Equivalents

The offer, acceptance, or promise to offer or accept cash gifts, payments, or cash
equivalents (including gift cards and coupons) of any kind (regardless of amount) from or
to a Government Official or private company in connection with doing business with
Kennametal anywhere in the world is strictly prohibited under this Policy and the Global
Business Gifts and Entertainment Policy.
VI.

ACCOUNTING PROVISIONSAll Kennametal bank accounts, books and records must be kept in reasonabledetail to accurately and fairly reflect both foreign and domestic financial activities andexpenditures. Applicable Finance policies and procedures must be followed. Contact
your Finance business partner or the Corporate Controller for guidance.
VII.

DUE DILIGENCE REQUIREMENTS FOR THIRD PARTIES

Kennametal and its directors, officers and employees are potentially liable for the
unlawful acts of Third Parties who provide anything of value to improperly influence a
decision when acting on behalf of or in connection with its representation of the Company
or its products or services. As defined above, Third parties for purposes of this Policy
means sales agents, representatives, and distributors. Suppliers of goods and services
to Kennametal anywhere in the world are subject to the Global Sourcing Policy andassociated review processes.

The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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KENNAMETAL INC. GLOBAL ANTI-CORRUPTION
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Risk appropriate due diligence and on-going monitoring of Third Parties is requiredby this Policy, as specified in more detail below. Attachment A of the Policy defines therisk factors used to evaluate Third Parties and determine appropriate risk-based due
diligence steps. The Kennametal business unit or partner is responsible for ensuring thedue diligence required by this Policy is completed in coordination with the Office of theGeneral Counsel and Office of Ethics and Compliance.
A. Initial Due Diligence Requirement
All proposed new Third Parties of Kennametal or any of its affiliates globallymust complete the anti-corruption risk assessment and due diligence process defined by
the Office of Ethics and Compliance (“OEC”) prior to signature of the contract with theproposed business partner. Completion of this due diligence is a required approval stepin the electronic contract management workflow process.
It is the obligation of the Kennametal business unit representative to ensure
timely and sufficient information, including the initiating due diligence questionnaire, isprovided to the OEC to enable the OEC to complete the required anti-corruption due
diligence review process for proposed new Third Parties. The level of anti-corruption due
diligence required is determined by the proposed Third Party’s risk score: low, medium,or high. The risk score is determined based upon predefined factors established by theCompany, including country of operations and sales, projected revenue, potential forgovernment interaction, and affiliations with governmental authorities or officials. The
OEC will provide the results of the anti-corruption due diligence review to the Kennametalbusiness representative for review and discuss any notable findings or concerns. The
OEC and/or Office of the General Counsel will offer recommendations to the Kennametalbusiness representative on how or whether to complete on-boarding of the Third Party
based upon the diligence results and risk factors. Copies of the due diligence report are
maintained by the OEC in the global electronic diligence system. All other documentation
is maintained by the relevant Kennametal business representative.
Third Party contracts must contain approved anti-corruption and anti-bribery
compliance terms and conditions that includes compliance with and reference to thisPolicy, which is also posted on Kennametal’s external ethics and compliance website inmultiple languages.

The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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B. On-going Monitoring and Follow-Up Due Diligence
The Kennametal business representative is required to actively monitor
existing Third Parties for compliance red flags, such as those listed in Section V. of thisPolicy, as well as other indications of suspicious or corrupt activity. Any concerns must
be promptly reported to the OEC and/or the Office of the General Counsel so anappropriate investigation can be conducted and mitigation measures implemented.
Once the initial due diligence process is completed by the OEC, Third
Parties will be subject to periodic follow-up due diligence (monitoring) during the life of
the relationship. The OEC will collaborate with the Kennametal business units tocomplete periodic due diligence follow-up reviews. The reviews of existing Third Parties
will be conducted using risk-based factors.
VIII.

DISCIPLINARY ACTION AND LEGAL PENALTIES

Failure of employees to comply with this Policy and associated Company policies
and guidelines may result in disciplinary action, up to and including termination of
employment from Kennametal.
Significant penalties for both the Company and individuals could result fromviolations of the Global Anti-Corruption Laws. The following are examples of possible
penalties under the FCPA and the UK Bribery Act:FCPAUK Bribery Act

Companies Fines of up to US$2 million per violation
 Debarment from participation in government
contracts
 Loss of export privileges Appointment of an independent compliancemonitor Accounting Provisions – Fines of up to $2.5
million per violation

Companies
 Unlimited financial penalties
 Debarment from public contracts
 Asset confiscation proceedings

Individuals
 Unlimited financial penalties
 Imprisonment up to 10 years

Individuals
 Fines of up to US$100,000 per violation
The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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Imprisonment up to 5 years per violation
Accounting Provisions – Fines up to US$10
million & 10 years imprisonment

IX.

COMPANY POLICY REFERENCES

The following documents are available to all employees on the Legal and Ethics sectionof the Policies SharePoint site from The Hub:

Code of ConductGlobal Business Gifts and Entertainment PolicyGlobal Records Management Policy



Non-Retaliation and Reporting Obligation PolicyConflicts of Interest PolicyGlobal Sourcing Policy

The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)

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Attachment A – Summary of Risk Factors and Due Diligence Steps
Anti-corruption due diligence is performed on all new Third Parties as detailed in thisPolicy. In addition, selected Third Parties are reviewed periodically based on relevantrisk factors (e.g. country of operation, government interaction, sales volume, etc.).
The Third Party due diligence process begins with the completion of the due diligencequestionnaire by the Kennametal business representative, with input from the proposed
Third Party; the questionnaire is maintained by and communicated from the Office of
Ethics and Compliance (OEC) to the business units. The responses to thisquestionnaire are entered into the electronic due diligence platform by the OEC for riskscoring.
The following factors are used to determine the risk score for the Third Party: Country of headquarters and countries where product is marketed/sold; Expected / historic annual sales revenue;
 Government ownership of the Third Party;
 Sale or marketing of products / services to a government entity; and Method of compensation other than Kennametal standard contract terms.
Based on the above factors, a risk score is calculated and assigned to the Third
Party. The risk scores are: Low, Medium or High. Based upon the risk scores, due
diligence procedures are performed on the Third Party by the OEC and communicatedto the Kennametal business representative.
 Low Risk will be focused on a continuous assessment of the management
team and the company appearing on any government sanctioned party list or
the Politically Exposed Persons (PEP) List.
 Medium Risk, incorporates the Low Risk screening and also includes
assurances from Third Party management that the business is run in acompliant manner; red flags are examined in more detail. A second-level
questionnaire that focuses on Third Party business organization, ownership,
key personnel, and financials is used for Medium Risk.
 High Risk, incorporates both the Low and Medium Risk elements but also
includes a detailed comprehensive anti-corruption review, with evidentiary
requirements from the Third Party.
Upon successful completion of the anti-corruption due diligence process, the Third Party
will receive risk-appropriate anti-corruption compliance awareness training.
The electronic version of this Policy is a controlled document.
Any printed copies of this document are for REFERENCE ONLY.
Form: KMT0002F01 R02 (12/2008)