Investor Relations
Ethics and Business Conduct Policy
Under the direction of the Board of Directors of Stratus Properties Inc., it is the policy of the
Company that its business activities are managed and operated in conformity with applicable law
and high ethical standards. The Board has also directed that all personnel employed by or
affiliated with the Company comply with this policy at all times. (References to "the Company"
include Stratus Properties Inc. and its direct and indirect subsidiaries; references to "Personnel"
include employees, officers, and directors of the Company; and references to "Personnel
affiliated with the Company" include affiliated and unaffiliated service providers).
This Statement of Ethics and Business Conduct Policy summarizes some of the important
principles that should afford guidance to Personnel in carrying out their responsibilities. Both
the Board of Directors and the Company's management are determined to maintain the
Company's reputation for integrity and fairness in business dealings with others and in the
communities where its offices and operations are located. Departures from our standards will
not be tolerated. Individuals who violate the Ethics and Business Conduct Policy are subject to
discharge or other appropriate disciplinary action. All Personnel employed by or affiliated with
the Company are therefore expected to be familiar with and to abide by this Policy. To this end,
all appropriate Personnel will be asked to provide an Annual Ethics and Business Conduct
Certification.
Most of the standards articulated in the Policy are established by U.S. and other applicable laws.
Violations of these laws can expose the Company and the individuals involved to criminal and
civil liability and to other serious consequences. At the same time, in practice these principles
can raise difficult issues in particular situations. All Personnel are responsible for seeking
guidance in the case of any doubt regarding the Policy's application. Any inquiries should be
directed to the Company's general counsel, Kenneth N. Jones, at (512) 435-2312.
Conflicts of Interest
It is the Company's policy that its Personnel must avoid any investments, associations or other
relationships that would interfere, or could appear to interfere, with their good judgment
concerning the Company's best interests. A conflict situation can arise when Personnel take
actions or have interests that may make it difficult to perform their work objectively and
effectively. Conflicts of interest also arise when an employee, officer or director, or a member of
his or her family, receives improper personal benefits as a result of his or her position in the
Company.
If such a situation arises, or an individual is unsure if a situation constitutes a conflict of interest,
he or she must immediately report the circumstances of the situation to the Company's
compliance officer. If the Company's senior management determines that such circumstances
constitute a conflict of interest, they must immediately report such conflict to the Audit
Committee.
Corporate Opportunities
No employee, officer or director may: (1) take for himself or herself personally opportunities
that are discovered through the use of Company property, information or position; (2) use
Company property, information or position for personal gain; or (3) compete with the Company.
All Company personnel owe a duty to the Company to advance its legitimate interests when the
opportunity to do so arises.
Insider Trading
No employee, officer or director may trade in Company securities unless he or she does not
possess material nonpublic information. No employee, officer or director may disclose such
information to others, including family members, who might use it for trading or pass it along to
others who might trade.
"Material" information includes any information that would influence a reasonable investor to
buy, sell or hold Company stock. If a person learns or knows of information that would prompt
anyone to want to buy or sell stock, chances are the information is material. Generally,
"nonpublic" information is information that has not been disclosed by means of a widely
distributed press release.
The Company will periodically issue more detailed guidance and procedures to certain personnel
that are subject to the Company's window period recommendations with respect to transactions
in Company securities.
Outside Business Activities
The Company endeavors to conduct its business operations with the highest degree of
proficiency. To that end, each of the Company's officers, managers and employees is expected
to devote virtually all of his or her business time to the Company's business and to use his or her
best efforts to perform faithfully and efficiently his or her duties to the Company. Accordingly,
each of the Company's officers, managers and employees is expected to refrain from any outside
employment or business activities that interfere with his or her ability to perform services and
fulfill the responsibilities that the Company requires of him or her.
All employees will be judged by the same performance standards and will be subject to the
Company's scheduling demands regardless of any outside employment and business activities.
If the Company determines, in its sole discretion, that an officer, manager, or employee's outside
employment or business activities interfere with his or her ability to perform services and fulfill
the responsibilities that the Company requires, the Company may ask the officer, manager, or
employee to reduce or even terminate the outside employment or business activities if he or she
wishes to remain employed by the Company.
Confidentiality
All information about the Company's business and its plans that has not been disclosed to the
public is a valuable asset that belongs to the Company. All Personnel employed by and affiliated
with the Company should maintain the confidentiality of information entrusted to them by the
Company, its business partners, suppliers, customers or others related to the Company's
business. Such information must not be disclosed to anyone, including friends and family
members, except when disclosure is authorized by the Company or legally mandated.
Trade Secrets and Fair Dealing
All Personnel are prohibited from (1) misappropriating any form of confidential financial,
business, or technical information, or any property, from any other person or company, or (2)
receiving any such information or property from a person or company with knowledge or reason
to know that such information or property is misappropriated or has otherwise been obtained
without permission of the owner. All Personnel should endeavor to deal fairly with the
Company's customers, suppliers, business partners, competitors and other employees.
Additionally, Personnel should not take advantage of any person through manipulation,
concealment, abuse of privileged information, misrepresentation of material facts, or any other
unfair-dealing practice.
Protection and Proper Use of Company Assets
All Personnel should protect the Company's property and assets and ensure their efficient and
proper use. Theft, carelessness and waste can directly impact the Company's profitability,
reputation and success. All Company property and assets should be used for legitimate business
purposes, and personal use of such property and assets without permission is strictly prohibited.
Financial Record Keeping
It is the Company's policy that all of its books and records must fully and fairly reflect all
receipts and expenditures. No undisclosed or unrecorded funds of the Company shall be
established for any purpose. Attempts to create false or misleading records are forbidden, and no
false or misleading entries shall be made in the Company's books and records for any reason.
This policy covers not only expenses incurred or transactions undertaken by Personnel, but also
expenses incurred by third parties (such as co-venturers, consultants, and agents) for which
reimbursement is requested.
Improper Payments
No Personnel employed by or affiliated with the Company shall make, offer, promise or
authorize any payment or use of any funds, assets or anything of value that is directly or
indirectly for the benefit of any individual (including any government official), company or
organization, and which is designed to secure, or is an award for securing in the past, any
improper business advantage for the Company or any other person. This policy applies
regardless of whether the payment or use is lawful under the laws of a particular jurisdiction.
The Company will periodically issue to all appropriate Personnel more detailed guidance and
procedures regarding improper payments.
It is the Company's policy that no payment, transfer, offer or promise of the Company's funds,
assets, or anything of value shall be made that is not properly authorized, properly accounted for
and clearly identified on the Company's books. Furthermore, no payment or transfer of the
Company's funds or assets shall be made or approved with the intention or understanding that
any part of such payment or transfer is to be used except as specified in the supporting
documents. Except as approved by authorized management, payments to third parties (other
than petty cash) may not be made in cash, nor may they be paid to any account in a country
otherwise unrelated to the payee's business, or to any person other than the authorized payee.
Political Contributions
It is the Company's policy not to contribute any funds to any candidate for political office,
official of a political party, or committee or organization for the election of a particular candidate
to any political office (federal, state or local) in the United States. Any requests or proposals for
contributions to political parties by the Company are not subject to this general policy but raise
legal issues. Accordingly, all such requests or proposals should be submitted to the Company's
general counsel who will arrange for necessary review and approval by senior management.
This policy does not prevent any Personnel in their individual capacity from rendering services
to individual candidates, political committees or political parties where permitted by applicable
laws, nor is it intended to discourage voluntary contributions by Personnel to such candidates,
committees, or parties (as long as such contributions are rendered in a person's individual
capacity and not on behalf of the Company), including any Company-related political
committee. Also, this policy does not preclude the Company from establishing programs,
permitted by applicable laws, under which it may make (1) contributions to any Companyrelated
political committee so as to match, in whole or in part, a contribution voluntarily made to
that committee by an eligible employee or other individual; (2) contributions to any state
political committee sponsored by an industry or trade association of which the Company or any
subsidiary is a member; or (3) other contributions permitted by law and specifically authorized
by management.
Business Entertainment and Gifts
It is the Company's policy that all solicitation of or dealings with suppliers, customers or others
doing or seeking to do business with the Company shall be conducted solely on the basis that
reflects both the Company's best business interests and its high ethical standards. Except in the
case of government officials or employees of state-owned companies, the providing of common
courtesies, entertainment, modest gifts and occasional meals for potential or actual suppliers,
customers or others involved with aspects of the Company's business in a manner appropriate to
the business relationship and associated with business discussions is permitted, provided
expenses in this connection are reasonable, authorized and consistent with applicable law.
The provision of business entertainment and gifts to government officials, including private
persons acting in an official capacity on behalf of the government, can raise serious issues under
U.S. and local laws. The payment by any Personnel employed by or affiliated with the Company
of lavish or excessive gifts and entertainment expenses to or on behalf of such officials is
prohibited. Any gifts or entertainment must be modest, customary and must comport with all
applicable U.S. and local laws. Personnel are encouraged to consult with the Company's general
counsel or his designee with any questions.
Travel and Travel-Related Expenses
Site visits, offsite meetings and other transactions involving the payment or reimbursement by
the Company of travel and travel-related expenses (including transportation, lodging, meals and
incidental expenses) incurred by government officials also can create issues under U.S. and local
laws. Any such expenses paid for or reimbursed must be genuine, reasonable, directly related to
the business of the Company, and allowed by U.S. or local law. Payments for travel not related
to a business purpose, including side trips primarily for pleasure, and payments for travel of
spouses or other family members, raise issues requiring special attention and must be specifically
authorized by the Company's general counsel or designee.
Acceptance of Payments
It is the Company's policy that no Personnel employed by or affiliated with the Company shall,
directly or indirectly, seek or accept any payments, fees, services or other gratuities (irrespective
of size or amount) outside the normal course of such individual's business duties from any other
person, company or organization that does or seeks to do business with the Company. Gifts of
cash or cash equivalents of any amount are strictly prohibited. The receipt of common
courtesies, sales promotion items of small value, modest gifts, occasional meals and reasonable
entertainment appropriate to a business relationship and associated with business discussions are
regarded as not inconsistent with this Ethics and Business Conduct Policy.
Antitrust Laws
In general, the antitrust laws prohibit competitors (both actual and potential) from making any
agreements restricting or limiting competition between themselves. This prohibition applies
whether the agreement is oral or written, explicit or implicit, formal or informal. Thus, it makes
no difference whether competitors enter into an unlawful agreement as a result of a board room
meeting or as the result of spontaneous discussions on the golf course or in a restaurant.
Although the most well-known examples of illegal agreements involve price fixing or bid
rigging, the antitrust laws prohibit agreements that allocate customers, territories or markets,
agreements that regulate the volume of products sold or the terms of their sale, and agreements
among purchasers that they will only purchase from sellers on specified terms. Additionally, in
certain circumstances, the antitrust laws prohibit competitors from agreeing to boycott or
unreasonably refusing to deal with third parties.
Not only do the antitrust laws prohibit joint activities that restrain trade, they also prohibit
companies from unilaterally acting to eliminate competitors through anti-competitive conduct.
Depending on the particular circumstances, the antitrust laws may reach such activities as belowcost
pricing, price discrimination, tying the sale of one product with another, unnecessary
acquisition of scarce supplies, and conduct that has the effect of unnecessarily raising a
competitor's costs.
Personnel who participate in a violation of the antitrust laws expose themselves and the
Company to grave consequences. Criminal penalties include substantial fines for the Company
and imprisonment and fines for the individuals who performed or authorized the illegal activity.
A violation of the antitrust laws also exposes the Company and individual participants to civil
lawsuits from the government, injured consumers and injured competitors. These lawsuits are
very costly and may result in fines, punitive damages, injunctions, consent decrees, and other
penalties that can adversely affect the Company years into the future.
This discussion has not been an exhaustive statement of antitrust law but rather is designed to
alert you to antitrust problems that you may face. Personnel are encouraged to consult with the
Company's general counsel or his designee with any questions.
Code of Ethics for Financial Officers
The honesty, integrity and sound judgment of the Chief Executive Officer, Chief Financial
Officer, Controller-Financial Reporting (the principal accounting officer) and persons performing similar functions, is fundamentalto the reputation and success of the Company. To
the best of their knowledge and ability, the chief executive officer and those officers of the
Company performing accounting, financial management or similar functions ("Financial
Officers") must:
- act with honesty and integrity, avoid actual or apparent conflicts of interest in personal and professional relationships, and disclose to the Board of Directors any material transaction or other relationship that reasonably could be expected to give rise to such a conflict,
- provide colleagues with information that is accurate, complete, objective, relevant, timely and understandable,
- provide full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and other public communications made by the Company,
- comply with applicable laws, rules and regulations of federal, state, and local governments (both foreign and domestic) and other appropriate private and public regulatory agencies,
- act in good faith, with due care, competence and diligence, without misrepresenting material facts,
- proactively promote ethical and honest behavior within the Company, and
- assure responsible use of and control of all assets, resources and information of the Company.
Any Financial Officer that the Audit Committee of the Board of Directors determines has failed
to comply fully with the points listed above will be deemed to have willfully failed to perform
his or her duties, and shall be subject to termination for cause or other disciplinary action the
Audit Committee of the Board of Directors determines to be appropriate.
Compliance with Other Laws, Rules and Regulations
The Company expects all Personnel to fully comply with all applicable laws, rules and
regulations. While such laws prescribe a minimum standard of conduct, this Ethics and Business
Conduct Policy requires conduct that often exceeds the legal standard.
The Company has additional policies and procedures covering in detail compliance with specific
legal requirements, such as the Company's insider trading policies and the Company's disclosure
policies. All Personnel are expected to be familiar and comply with these additional policies and
procedures.
In the event of a conflict between applicable laws, or a conflict between applicable law and
Company policies, Personnel should seek guidance from the compliance officer, and should
generally follow the course of conduct that reflects the most stringent standard of behavior.
Administration and Waiver of this Policy
This Ethics and Business Conduct Policy will be administered under the direction of the Audit
Committee of the Board of Directors. Any requests for waivers of this Policy by employees
should be submitted in writing to the general counsel, c/o 100 Congress, Suite 1300, Austin, TX
78701. Any waivers of this Policy for executive officers or directors will only be granted by the
Audit Committee, and must be promptly disclosed to the Company's stockholders on the
Company's website.
Reporting of Illegal or Unethical Behavior
If any Personnel employed by or affiliated with the Company observes or knows of possible or
actual violations of this Policy, or has any questions about its meaning, intent and/or application,
it is that individual's responsibility to report such situations or pose any questions promptly to
his or her immediate supervisor. If for any reason a person is not comfortable approaching his
or her immediate supervisor, any one of the following avenues are also acceptable means of
reporting illegal or unethical behavior:
- contact the Company's general counsel, Kenneth N. Jones, by phone ((512) 435-2312), e-mail (kjones@abaustin.com), or mail (c/o 100 Congress, Suite 1300, Austin, TX 78701)
- send a note, with any relevant documents, by mail to Chairman, Stratus Audit Committee, c/o 98 San Jacinto Boulevard, Suite 220, Austin, Texas 78701, and mark the outside envelope "Confidential."
All matters will be treated as strictly confidential, and also may be reported on an anonymous
basis. The Company will not allow retaliation in any form for any reports that are made in good
faith.
Accounting Complaints
The Company's policy is to comply with all applicable financial reporting and accounting
regulations applicable to the Company. If any person has any concerns or complaints regarding
any questionable accounting or auditing matters of the Company, then he or she is encouraged to
submit those concerns or complaints (anonymously, confidentially or otherwise) to the Chairman
of the Audit Committee, c/o 98 San Jacinto Boulevard, Suite 220, Austin, Texas 78701.
Annual Certification
The Company requires selected Personnel to complete and sign, annually, a certification
designed to elicit information as to compliance with the policies and standards summarized
above. After review of these completed certifications, a report is made to the Audit Committee
of the Board of Directors of Stratus Properties Inc.
Violations of any of the foregoing policies and standards can expose the Company and the
individuals involved to potential criminal and civil liability and to lawsuits for damages or
restitution. Individuals who violate these policies are subject to discharge or other disciplinary
action.
It is recognized that Personnel may have questions regarding the application of this Policy in
particular situations. All Personnel are responsible for seeking guidance in case of any doubt.
For this purpose, inquiries should be directed to the Company's general counsel, Kenneth N.
Jones.
