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Overview of the Conflict Minerals Issue

What is the Dodd-Frank Act Section 1502 Conflict Minerals provision?

Section 1502 of the Dodd-Frank Act is a provision related to sourcing conflict minerals, signed into law July 21, 2010. The intent of the provision is to deter — through increased transparency of companies’ sourcing practices — the extreme violence and human rights violations in the Democratic Republic of Congo (DRC) and neighboring countries funded by the exploitation and trade of certain minerals.

Section 1502 instructs the U.S. Securities and Exchange Commission (SEC), in consultation with the U.S. Department of State, to promulgate regulations requiring certain companies to submit annually a description of measures taken to exercise due diligence on the source and chain of custody of Conflict Minerals. SEC issued final Conflict Minerals reporting rules on August 22, 2012. The goal is to have product and materials that are necessary to the production of a product and utilized in the manufacturing process of that product to be “conflict mineral free”.

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minerals

What are Conflict Minerals?

Cassiterite (tin ore), wolframite (tungsten ore), coltan (tantalum ore) and gold. They often refer as 3TG (Tin, Tantalum, Tungsten and Gold), originating from the Democratic Republic of Congo or an adjoining country

What is DRC conflict free?
“DRC conflict-free” is defined to mean the products that do not contain [conflict] minerals or their derivatives determined to be directly or indirectly financing or benefit armed groups from affected countries: Democratic Republic of the Congo (DRC); Central Africa Republic; The Republic of the Congo; Tanzania; The Republic of South Sudan; Zambia; Angola; Burundi; Rwanda and Uganda.

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Clayton Conflict
Minerals Policy Statement

CMH Manufacturing expects all vendors to follow the code of conduct as enumerated in the OECD Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High-Risk Areas. CMH Family of Brands has formulated a framework for detailed due diligence to further ensure their vendors meet the standards required for responsible global supply chain management of tin, tantalum, tungsten, their ores and mineral derivatives, and gold in conflict-affected and high-risk areas.

CMH Manufacturing has incorporated measures to prevent future introduction of minerals that financially support conflict in these areas into its supply chain, while also verifying compliance from vendors in its current supply chain. The particular conflict regions currently referenced are the Democratic Republic of the Congo and the outlying countries, termed “covered countries”. CMH Family of Brands will support and actively contribute to industry initiatives in regards to conflict materials and the advocacy of ethical business practices.

CMH Manufacturing will not tolerate products in its supply chain that contain minerals that directly or indirectly finance or benefit armed groups.

CMH Manufacturing and its vendors will not knowingly contribute to conflict through the purchase or trade of products containing minerals from the conflict region. Vendors are expected to adhere to the EICC Code of Conduct, established to ensure worker safety and fairness, environmental responsibility, and business efficiency, and deal exclusively with known responsible sources.

CMH Manufacturing expects all vendors to similarly adopt a standard of business ethic and process of due diligence to ensure their vendors are not associated with armed groups. All necessary declarations, with proper utilization of the EICC-GeSI Conflict Minerals Reporting Template, will be required from vendors. Origin of minerals must be known and documented in these reports to ensure observance of this standard. Vendors are expected to use this method as well as observing and cooperating with industry initiatives designed to eliminate the use of conflict minerals.

CMH Manufacturing’s commitment to the protection of human rights and responsible business practices is to remain a constant guideline for trade worldwide.

Helpful Resources

For more information on Conflict Minerals:

CFIS's website: http://www.conflictfreesourcing.org

EICC's conflict mineral site: http://www.eiccoalition.org/initiatives/conflict-free-sourcing-initiative

For questions or concerns related to our conflict mineral initiatives, suppliers and other external stakeholders may contact us at conflictminerals@claytonhomes.com or by mail at Berkshire Hathaway Inc., 3555 Farnam Street, Suite 1400, Omaha, NE 68131.

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