KMC MUSIC CORP.

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KMC HEAD OFFICE
SUPPLY CHAIN TRANSPARENCY

Fender Musical Instruments Corporation, and its subsidiaries who conduct business into and within California, including KMC Music, Inc. (collectively, “The FMIC Group”), recognizes and supports the California Transparency in Supply Chains Act (“the Act”). The Act, which takes effect January 1, 2012, requires retailers and manufactures like The FMIC Group to make consumers aware of efforts to detect, and eradicate human slavery from their global supply chains.

As of January 1, 2012, The FMIC Group’s actions in this area consist of the following:

· All of The FMIC Group’s direct suppliers have received a bulletin that not only summarizes the Act, but announces The FMIC Group’s policy of enforcing and supporting the purpose of the Act. A copy of this bulletin may be obtained upon request through contact information below.

· Standard purchase order (PO) terms require all direct suppliers to represent and warrant that products made for and on behalf of The FMIC Group, are in compliance with laws prohibiting forced, or child labor. The terms also include explicit references to California’s Transparency in Supply Chains Act.

· Senior supply chain managers in the FMIC Group have personally met with some of The FMIC’s Group’s most critical OEM partners, to instill ongoing cooperation in The FMIC Group’s commitment against unlawful labor in its supply chain. Master agreements with these critical OEMs contain (like The FMIC Group’s standard PO terms) prohibitions against child or forced labor.

· In territories around the world where The FMIC Group does not sell direct and instead relies upon third party distributors, written distributor agreements are used that contain specific provisions against the use of child labor or slavery.

· The FMIC Group maintains internal accountability standards and procedures for employees failing to meet company standards regarding slavery and trafficking. The FMIC Group’s Code of Conduct holds personnel accountable for ensuring compliance and ethical standards in The FMIC Group’s international business.

· The FMIC Group has, for years, maintained a compliance “hotline” that all personnel are instructed to use in the event violations of law or policies are suspected and/or detected.

· The FMIC Group provides periodic training to impacted personnel on understanding, detecting, reporting and preventing unlawful labor issues in the supply chain. Relevant news stories are routinely tracked and distributed to impacted personnel to ensure the topic remains addressed in The FMIC Group’s normal course of business.

· At this time The FMIC Group does not conduct independent, unannounced inspections of third party facilities in its supply chain (in part due to challenges such as visa requirements in territories where The FMIC Group conducts business). However, for scheduled visits to OEM partner facilities in territories with such requirements, The FMIC Group now routinely includes unannounced agenda items dealing directly with human slavery detection and prevention. Going forward, The FMIC Group is actively seeking opportunities to incorporate independent, unannounced audits into its compliance plan.

The FMIC Group remains committed to building the world’s best musical instruments and accessories, in a way that helps, not hurts the people and communities involved in its business. We welcome your input on this important issue. Written requests from consumers for a copy of this statement, or other information related to the above, may be obtained by contacting us by email here. Responses will be given within 30 days of receiving such request.

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