I. In connection with an investigation by the Division of Enforcement ("Division")

UNITED STATES OF AMERICA 

SECURITIES AND EXCHANGE COMMISSION 

NON-PROSECUTION AGREEMENT 

I. In connection with an investigation by the Division of Enforcement ("Division") 
relating to possible violations ofthe books and records and intemal accounting controls 
provisions 
ofthe Foreign Corrupt Practices Act from at least 2009 through 2014 
("Investigation"), the United States Securities and Exchange Commission 
("Commission") and Nortek, Inc. ("Respondent") enter into this non-prosecution 
agreement ("Agreement") on the following terms and conditions: 
COOPERATION 
2. The Respondent, a corporation organized and operating under the laws 
of 
Delaware agrees to cooperate fully and truthfully in the Investigation and any other 
related enforcement litigation or proceeding to which the Commission is  a party (the 
"Proceedings"), regardless 
ofthe time period in which the cooperation is  required. In 
addition, the Respondent agrees to cooperate fully and truthfully, when directed by the 
Division's staff, in an official investigation or proceeding by any federal, state, or self­
regulatory organization ("Other Proceedings"). The full, truthful, and continuing 
cooperation 
of the Respondent shall include, but not be limited to: 
a. producing, in a responsive and prompt manner, all non-privileged 
documents, information, and other materials to the Commission as requested by the 
Division's staff, wherever located, in the possession, custody, 
or control of the 
Respondent; 
b. using its best efforts to secure the full, truthful, and continuing 
cooperation, as defined in Paragraph 3, 
ofcurrent and former directors, officers, 
employees and agents, including making these persons available, when requested to do so 
by the Division's staff, at its expense, for interviews and the provision 
oftestimony in the 
investigation, trial and other judicial proceedings in connection with the Proceedings or 
Other Proceedings; and 
c. entering into tolling agreements, when requested to do so by the 
Division's staff, during the period 
of cooperation. 
3. The full, truthful, and continuing cooperation of each person described in 
Paragraph 2 above 
will be subject to the procedures and protections ofthis paragraph, 
and shall include, but not be limited to: 
a. producing all non-privileged documents and other materials as requested 
by the Division's staff; 

b. appearing for interviews, at such times and pl aces, as requested b y  the 
Div ision's staff; 
c. responding to a
ll inquiries, when requested to do so by the Division's 
staff, in connection with the  Proceedings or Other Proceedings; and 
d. testifying at trial a nd other judicial proceedings, when requested to do so 
by the  Division's staff,  in connection w ith the Proceedings or Other Proceedings. 
UNDERTAKINGS 
4. 
The Respondent understands and agrees to perfonn the following undertakings: 
a. to 
pay disgorgement obtained or retained as a  resul t of the v iolations 
discovered during the Investigation, without reimbursement or ind
emnification  from any 
so
urce, in the amount of$291,403, together with prejudgm ent interest thereon in the 
amount of$30,655 within 15 days. Payment may be made directly from a bank account 
v ia  Pay.gov throu
gh the SEC website at http://www.sec.gov/about/offices.ofrn.htm. 
Payment 
may also be made by certified check, ba nk cashi er's check, or United States 
postal 
money ord er payable to the Securities and Exchange Commission, which shall be 
delivered 
or mailed to: 
Enterprise Services Center 

Accounts 
Receivable Branch 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

along  with a  letter identifying the  Respondent and specify ing that the payment is m ade 
purs uant to a  non-prosecution  agreement entered into w ith th e Commissio n o n June 7, 
2016, and send 
an additional copy of the letter and check in accordance with the service 
requirements 
ofParagraph 7; 
PUBLIC STATEMENTS 
5. After this 
Agreement is executed , the Respondent agrees not to  take any action or 
to make or permit any public statement through present or future  attorneys, employees, 
agents, 
or other persons authorized to speak for it, except i   n legal proceedings in w hich 
the Commission is not a party, denying, directly or indirectl y, the factual basis ofany 
aspect 
ofth is Agreement. T his  paragraph is not intended to  apply to any statement made 
b y an individua l in the course ofa ny criminal, civil, or regulatory proceeding initiated by 
the government 
or self-regulatory organization against such individual, unless such 
individual is speaking 
on behalfofthe Responde nt. Ifit is determined by the 
Commission th
at a  public statement by the Respondent or any related person contradicts 
in whole 
or in part th is Agreement, a t its sole discretion, the Commission may bring an 
enforcement action in accordance with Paragraphs 8  through 10. 
2 


6. Prior to issuing a press release concerning this Agreement, the Respondent agrees 
to have the text 
of the release approved by the staff of the Division. 
SERVICE 
7. The Respondent agrees to serve by hand delivery or by next-day mail all written 
notices and correspondence required by or related to this Agreement to Paul 
G. Block, 
Assistant Regional  Director, Foreign Corrupt Practices Act Unit, United States Securities 
and Exchange Commission, 
33 Arch Street, 24th Floor, Boston, MA 02110, (617) 573­
8912, unless otherwise directed in writing by the staff 
of the Division. 
VIOLATION OF AGREEMENT 
8. The Respondent understands and agrees that it shall be a violation ofthis 
Agreement 
if it knowingly provides false or misleading information or materials in 
connection with the Proceedings or Other Proceedings. In the event 
ofsuch misconduct, 
the Division will advise the Commission 
ofthe Respondent's misconduct and may make 
a criminal referral for providing false information (18 U.S.C. 
§ 1001), contempt (18 
U.S.C. 
§§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.). 
9. The Respondent understands and agrees that it shall be a violation of this 
agreement 
if it violates the federal securities laws after entering into this agreement. It is 
further understood and agreed that should the Division determine that it has failed to 
comply with any term or condition ofthis Agreement, the Division will notify the 
Respondent or its counsel 
of the fact and provide an opportunity for the Respondent to 
make a submission consistent with the procedures set forth in the Securities Act 
of 1933 
Release No. 5310. Under these circumstances, the Division may, in its sole discretion 
and not subject to judicial review, recommend to the Commission an enforcement action 
against the Respondent for any securities law violations, including, but not limited to, the 
substantive offenses relating to the Investigation. Nothing in this agreement limits the 
Division's discretion to recommend to the 
Commission an enforcement action against the 
Respondent for future violations 
ofthe federal securities laws, without notice, to protect 
the public interest. 
10. The Respondent understands that 
if it fails to make any payment by the date 
agreed and/or in the amount agreed according to the schedule set forth above, all 
outstanding payments under this Agreement, minus any payments made, shall become 
due and payable immediately at the discretion 
of the staff of the Commission. 
11. The Respondent understands and agrees that in any future enforcement action 
resulting from its violation 
ofthe Agreement, any documents, statements, information, 
testimony, 
or evidence provided by it during the Proceedings or Other Proceedings, and 
any leads derived there from, may be used against it in future legal proceedings. 
3 


12. The Respondent understands and agrees that any enforcement action brought by 
the Commission following the Respondent's violation 
of the Agreement that would not 
have been time-barred by the applicable statute 
of limitations if brought on the date of the 
execution of this Agreement, may be commenced against the Respondent, 
notwithstanding the expiration 
of the statute of limitations between the signing ofthis 
Agreement and the commencement of such action. 
13. In the event it breaches this Agreement, the Respondent agrees not to dispute, 
contest, 
or contradict the factual statements contained in Exhibit A, or their admissibility, 
in any future Commission enforcement action against it. 
COMPLIANCE WITH AGREEMENT 
14. Subject to the full, truthful, and continuing cooperation 
ofthe Respondent, as 
described in Paragraphs 2 and 3, and compliance with all obligations and undertakings in 
the Agreement, the Commission agrees not to bring any enforcement action 
or 
proceeding against the Respondent arising from the Investigation. This agreement should 
not, however, be deemed exoneration 
ofthe Respondent or to be construed as a finding 
by the Commission that no violations 
ofthe federal securities laws have occurred. 
15. The Respondent understands and agrees that this Agreement does not bind other 
federal, state 
or self-regulatory organizations, but the Commission may, at its discretion, 
issue a letter to these organizations detailing the fact, manner, and extent 
ofits 
cooperation during the Proceedings or Other Proceedings, upon the written request 
ofthe 
Respondent. 
16. The Respondent understands and agrees that 
if it sells, merges, or transfers all or 
substantially all of its business operations as they exist as of the date ofthis Agreement, 
whether such a sale is structured as a stock or asset sale, merger, 
or transfer during the 
Deferred Period, it shall include in any contract for sale, merger, or transfer a provision 
binding the purchaser 
or successor in interest to the obligations set forth in this 
Agreement. Furthermore, the protections arising from this Agreement will not apply to 
purchasers 
or successors in interest unless such purchaser or successor enters into a 
written agreement, on terms acceptable to the Division, agreeing to assume all the 
obligations set forth in this Agreement. 
17. The Respondent understands and agrees that the Agreement only provides 
protection against enforcement actions arising from the Investigation and does not relate 
to any other violations 
or any individual or entity other than the Respondent. 
VOLUNTARY AGREEMENT 
18. The Respondent's decision to enter into this Agreement is freely and voluntarily 
made and is not the result 
offorce, threats, assurances, promises, or representations other 
than those contained in this Agreement. 
4 


19. The Respondent read and understands this Agreement. Furthermore, the 
Respondent has reviewed all legal and factual aspects 
of this matter with its attorney and 
is  fully satisfied with its attorney's legal representation. The Respondent has thoroughly 
reviewed this Agreement with its attorney and has received satisfactory explanations 
concerning each paragraph 
of the Agreement. After conferring with its attorney and 
considering all available alternatives, the Respondent has made a knowing decision to 
enter into the Agreement. 
20. The Respondent represents that its Board 
of Directors has duly authorized, in the 
resolution attached as Exhibit B, the execution and delivery 
ofthis Agreement, and that 
the person signing this Agreement has authority to bind the Respondent. 
ENTIRETY OF AGREEMENT 
21. This Agreement constitutes the entire agreement between the Commission and the 
Respondent, and supersedes all prior understandings, 
if any, whether oral or written, 
relating to the subject matter herein. 
22. This Agreement cannot be modified except in writing, signed by the Respondent 
and a representative 
ofthe Commission. 
23. In the event an ambiguity or a question 
of intent or interpretation arises, this 
Agreement shall be construed as 
if drafted jointly by the parties hereto, and no 
presumption or burden 
of proof shall arise favoring or disfavoring the Commission or the 
Respondent 
by virtue ofthe authorship ofany of the provisions of the Agreement. 
[Remainder 
ofpage intentionally left blank] 
5 


The signatories below acknowledge acceptance of the foregoing terms and conditions. 
RESPONDENT 
I 
Date: 
Kev?ef~ 
Senior Vice President, 
General Counsel 
& Secretary 
Nortek, Inc. 
500 Exchange Street, I 0th Floor 
Providence, RI 02903 
On 
~ , 3 , 2016, Kevin W. Donnelly, a person known to me, personally 
appearedefore me and acknowledged executing the foregoing agreement with full 
authority to do so 
on behalf ofNortek, Inc., as its Senior Vice President, General Counsel 
& Secretary and pursuant to the attached Resolution ofthe Board of Directors. 
NCirary Public 
Stat~: ~h;d~ k la...('\C, 
Commission number: l/31;:i9 
Commission expiration: J.JI (. a 
I(.;)7 .,;:)(}I ~ 
RESPONDENT'S COUNSEL 
Approved as to form: 
'IS~r :;L 
~lf~ . ­
Luke T. Cadigan 
K&L GATES LLP 
SECURITIES AND EXCHANGE COMMISSION 
DIVISION 
OF ENFORCEMENT 
Date Kara Brockmeyer 
Chief, FCP A Unit 
6 


EXHIBIT A 
STATEMENT OF FACTS 
Ifthis case had gone to trial, the Commission would have presented evidence 
sufficient to prove the following facts: 
Nortek, Inc. 
1. Nortek, Inc. ("Nortek") is incorporated in Delaware with its principal 
place 
of business in Providence, Rhode Island. Nortek manufactures and sells a wide 
variety 
of products for residential and commercial constructions and remodeling and the 
personal and enterprise computer markets, including heaters, range hoods, heating, 
ventilation and air conditioning systems, and garage door and security systems. Nortek's 
stock is  registered pursuant to Section l 2(b) 
of the Securities Exchange Act of 1934 
("Exchange Act"), and it is  listed on the NASDAQ Global Select Market. 
2. Linear Electronics (Shenzhen) Co. Ltd. ("Linear China") was an indirect 
wholly-owned subsidiary 
ofNortek located in Shenzhen, China. Linear China 
manufactures products for Nortek, including during the period 2009 through 2014. 
Improper Payments and Gifts to Chinese Government Officials 
3. From at least 2009 to 2014, Linear China's managing director, 
accounting manager, customs liaison officer, and other employees made or approved 
improper payments and gifts to local Chinese officials in order to receive preferential 
treatment, relaxed regulatory oversight, and/or reduced customs duties, taxes, and fees. 
4. The improper payments and gifts to local Chinese officials included cash 
payments, gift cards, meals, travel, accommodations, and entertainment. Linear China 
made the illicit payments to local officials from multiple different governmental 
departments, including customs, tax, fire, police, labor, health inspection, environmental 
protection, and telecommunications. 
5. Linear China's improper payments were systemic and went undetected for 
several years. From 2009 through 2014, Linear China made more than 400 payments to 
local Chinese officials. At least one improper payment was made every month during 
those 5 years. These payments totaled approximately 
$290,000. 
6. In some instances, Linear China's accounting department entered the illicit 
payments as entries in various accounts and supported the expenditures with false or 
misleading information and supporting documentation. 
1 


Nortek's Inadequate Internal Accounting Controls 
and Inaccurate Books and Records 
7. As evidenced by Linear China's illicit payments made directly to Chinese 
officials in the ordinary course 
of business over many years, Nortek failed to devise and 
maintain a system 
of internal accounting controls at Linear China sufficient to provide 
reasonable assurances that, among other things, transactions were executed 
in accordance 
with management's general or specific authorization, and transactions were recorded as 
necessary to maintain accountability for assets. Linear China made improper payments 
from multiple accounts, which Nortek failed to review or test. Nortek failed to notice 
obvious red flags in Linear China's financial records, including the number and size 
of 
Linear China's meals and entertainment expenses. Further, Nortek failed to establish 
procedures to ensure its Linear China employees were trained in anti-corruption 
compliance. 
8. From 2009 through 2014, certain Linear China employees paid bribes 
that were inaccurately recorded in Linear China's books, records and accounts, which 
were consolidated into the books and records 
of Nortek. 
Nortek's Self-Report 
9. Nortek timely self-reported this matter to the Division of Enforcement and 
conducted a prompt and thorough investigation. In 2014, Nortek conducted an internal 
audit 
of Linear China's books and records. The internal audit team identified 
questionable payments made to local Chinese officials. As a result, Nortek conducted an 
internal investigation 
of Linear China's conduct and forensically analyzed Linear China's 
financial records. The internal investigation confirmed Linear China had made improper 
payments to Chinese officials local to Shenzhen, China. Before completing its internal 
investigation, Nortek promptly self-reported its preliminary findings to both the SEC and 
the Department 
ofJustice. 
Remedial Measures and Cooperation 
10. Upon learning of the bribes, Nortek took immediate action to end the 
illicit payments and implemented significant remedial measures. Once the employees at 
Linear China were interviewed by the internal investigation, those involved were 
terminated, including Linear China's managing director and chief financial officer. 
Nortek also comprehensively reviewed its then existing compliance program and 
undertook significant corrective action to enhance its compliance program and ensure 
that its employees around the globe were receiving adequate training. As part 
of its 
remedial efforts, Nortek: (i) revised its internal audit testing and protocols to focus on 
quickly discovering any FCPA-related improprieties; 
(ii) strengthened its anti-corruption 
policies; 
(iii) developed a Compliance Committee consisting ofrepresentatives from 
management and subsidiaries to supervise compliance implementation 
ofNortek's 
policies and training; (iv) provided extensive mandatory in-person and on-line trainings 
on the FCPA and anti-corruption policies to its employees around the globe in 
2 


appropriate languages; and (v) adjusted its internal audit schedules to prioritize facilities 
located 
in geographic areas known for higher incidences of corruption. 
11. Nortek provided comprehensive, organized, and real-time cooperation 
with the staff 
ofthe Enforcement Division during the course of its internal investigation, 
including: (i) sharing the detailed findings 
of its internal investigation, including 
identifying all improper payments and potential improper payments made to foreign 
officials and providing its summaries 
of witness interviews; (ii) timely updating the staff 
with additional findings when its investigation uncovered new information; (iii) 
effectively segregating, organizing, and presenting the most salient documents to the 
staff; (iv) voluntarily translating documents from Chinese into English; (v) voluntarily 
making witnesses available for interviews, including those in China; and (vi) conducting 
a risk assessment to determine whether the improper conduct at Linear China occurred at 
Nortek's other manufacturing locations in China. 
3 


Kevin W. Donnelly 
NORTEK INC. CERTIFICATE OF CORPORATE RESOLUTION 

I, Kevin W. Donnelly, 
do hereby certify that I am the  duly  elected, qualified and acting Senior 
Vice President, General Counsel 
& Secretary of Nortek, Inc. ("Nortek" or the " Corporation"), a 
Delaware  corporation, a
nd that the following is a complete and accurate copy ofa  resolution 
adopted by the Board 
of Directors ofNorte k at a  meeting  held on May 3, 2016 at which a 
quorum was present and re
solved as follows: 
RESOLVED: That Kevin W. Donnelly, an  Officer of this Corporation, be and here by is 
authorized to act on behalf ofthe  Corporation, and in his sole di scretion, to negotiate, 
approve, 
and execute the Non-Prosecution Agreement, attached hereto, with the United 
Stat
es Securities and Exchange Commission (" Commission") in connection with the 
inv
estigation conducted by  the Commission; in this connection, the aforementioned 
Officer be and hereby  is authorized to und
ertake suc h actions as he may deem necessary 
and advisable, including the  execution 
of such documentation as may be required by the 
Commission, in ord
er to carry out the fo regoing. 
I further certify that the aforesaid resolution 
has  not been  amended or revoked in any respect and 
remains in full force and effect. 
IN 
WITNESS WHEREOF, I have executed this Certificate as a 
sealed instrument this 3 r d day 
ofMay, 2016. 
By: 
Senior Vice President, 
General Counsel 
& Secretary 
Nortek, Inc. 
l'J....otary~ 
Stat er·6f Rhode Island 

County of Providence 

~lA4A A . If~ 
Dawn Valois 

Notary Public 

UNITED STATES OF AMERICA 

SECURITIES AND EXCHANGE COMMISSION 


NON-PROSECUTION AGREEMENT 


I. In connection with an investigation by the Division of Enforcement ("Division") 
relating to possible violations of the books and records and intemal accounting controls 
provisions of the Foreign Corrupt Practices Act from at least 2009 through 2014 
("Investigation"), the United States Securities and Exchange Commission 
("Commission") and Nortek, Inc. ("Respondent") enter into this non-prosecution 
agreement ("Agreement") on the following terms and conditions: 

COOPERATION 

2. The Respondent, a corporation organized and operating under the laws of 
Delaware agrees to cooperate fully and truthfully in the Investigation and any other 
related enforcement litigation or proceeding to which the Commission is a party (the 
"Proceedings"), regardless of the time period in which the cooperation is required. In 
addition, the Respondent agrees to cooperate fully and truthfully, when directed by the 
Division's staff, in an official investigation or proceeding by any federal, state, or self­
regulatory organization ("Other Proceedings"). The full, truthful, and continuing 
cooperation of the Respondent shall include, but not be limited to: 

a. producing, in a responsive and prompt manner, all non-privileged 
documents, information, and other materials to the Commission as requested by the 
Division's staff, wherever located, in the possession, custody, or control of the 
Respondent; 

b. using its best efforts to secure the full, truthful, and continuing 
cooperation, as defined in Paragraph 3, of current and former directors, officers, 
employees and agents, including making these persons available, when requested to do so 
by the Division's staff, at its expense, for interviews and the provision of testimony in the 
investigation, trial and other judicial proceedings in connection with the Proceedings or 
Other Proceedings; and 

c. entering into tolling agreements, when requested to do so by the 
Division's staff, during the period of cooperation. 

3. The full, truthful, and continuing cooperation of each person described in 
Paragraph 2 above will be subject to the procedures and protections of this paragraph, 
and shall include, but not be limited to: 

a. producing all non-privileged documents and other materials as requested 
by the Division's staff; 



b. appearing for interviews, at such times and places, as requested by the 
Division's staff; 

c. responding to all inquiries, when requested to do so by the Division's 
staff, in connection with the Proceedings or Other Proceedings; and 

d. testifying at trial and other judicial proceedings, when requested to do so 
by the Division's staff, in connection with the Proceedings or Other Proceedings. 

UNDERTAKINGS 

4. The Respondent understands and agrees to perfonn the following undertakings: 

a. to pay disgorgement obtained or retained as a result of the violations 
discovered during the Investigation, without reimbursement or indemnification from any 
source, in the amount of$29 1,403, together with prejudgment interest thereon in the 
amount of$30,655 within 15 days. Payment may be made directly from a bank account 
via Pay.gov through the SEC website at http://www.sec.gov/about/offices.ofrn.htm. 
Payment may also be made by certified check, bank cashier's check, or United States 
postal money order payable to the Securities and Exchange Commission, which shall be 
delivered or mailed to: 

Enterprise Services Center 

Accounts Receivable Branch 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 


along with a letter identifying the Respondent and speci fying that the payment is made 
pursuant to a non-prosecution agreement entered into with the Commission on June 7, 
2016, and send an additional copy of the letter and check in accordance with the service 
requirements of Paragraph 7; 

PUBLIC STATEMENTS 

5. After this Agreement is executed, the Respondent agrees not to take any action or 
to make or permit any public statement through present or future attorneys, employees, 
agents, or other persons authorized to speak for it, except in legal proceedings in which 
the Commission is not a party, denying, directly or indirectl y, the factual basis of any 
aspect of this Agreement. This paragraph is not intended to apply to any statement made 
by an individual in the course of any criminal, civil, or regulatory proceeding initiated by 
the government or self-regulatory organization against such individual, unless such 
individual is speaking on behalfof the Respondent. If it is determined by the 
Commission that a public statement by the Respondent or any related person contradicts 
in whole or in part th is Agreement, at its sole discretion, the Commission may bring an 
enforcement action in accordance with Paragraphs 8 through 10. 

2 


http://www.sec.gov/about/offices.ofrn.htm


6. Prior to issuing a press release concerning this Agreement, the Respondent agrees 
to have the text of the release approved by the staff of the Division. 

SERVICE 

7. The Respondent agrees to serve by hand delivery or by next-day mail all written 
notices and correspondence required by or related to this Agreement to Paul G. Block, 
Assistant Regional Director, Foreign Corrupt Practices Act Unit, United States Securities 
and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA 02110, (617) 573­
8912, unless otherwise directed in writing by the staff of the Division. 

VIOLATION OF AGREEMENT 

8. The Respondent understands and agrees that it shall be a violation of this 
Agreement if it knowingly provides false or misleading information or materials in 
connection with the Proceedings or Other Proceedings. In the event of such misconduct, 
the Division will advise the Commission of the Respondent's misconduct and may make 
a criminal referral for providing false information (18 U.S.C. § 1001), contempt (18 
U.S.C. §§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.). 

9. The Respondent understands and agrees that it shall be a violation of this 
agreement if it violates the federal securities laws after entering into this agreement. It is 
further understood and agreed that should the Division determine that it has failed to 
comply with any term or condition of this Agreement, the Division will notify the 
Respondent or its counsel of the fact and provide an opportunity for the Respondent to 
make a submission consistent with the procedures set forth in the Securities Act of 1933 
Release No. 5310. Under these circumstances, the Division may, in its sole discretion 
and not subject to judicial review, recommend to the Commission an enforcement action 
against the Respondent for any securities law violations, including, but not limited to, the 
substantive offenses relating to the Investigation. Nothing in this agreement limits the 
Division's discretion to recommend to the Commission an enforcement action against the 
Respondent for future violations of the federal securities laws, without notice, to protect 
the public interest. 

10. The Respondent understands that if it fails to make any payment by the date 
agreed and/or in the amount agreed according to the schedule set forth above, all 
outstanding payments under this Agreement, minus any payments made, shall become 
due and payable immediately at the discretion of the staff of the Commission. 

11. The Respondent understands and agrees that in any future enforcement action 
resulting from its violation of the Agreement, any documents, statements, information, 
testimony, or evidence provided by it during the Proceedings or Other Proceedings, and 
any leads derived there from, may be used against it in future legal proceedings. 

3 




12. The Respondent understands and agrees that any enforcement action brought by 
the Commission following the Respondent's violation of the Agreement that would not 
have been time-barred by the applicable statute of limitations if brought on the date of the 
execution of this Agreement, may be commenced against the Respondent, 
notwithstanding the expiration of the statute of limitations between the signing of this 
Agreement and the commencement of such action. 

13. In the event it breaches this Agreement, the Respondent agrees not to dispute, 
contest, or contradict the factual statements contained in Exhibit A, or their admissibility, 
in any future Commission enforcement action against it. 

COMPLIANCE WITH AGREEMENT 

14. Subject to the full, truthful, and continuing cooperation of the Respondent, as 
described in Paragraphs 2 and 3, and compliance with all obligations and undertakings in 
the Agreement, the Commission agrees not to bring any enforcement action or 
proceeding against the Respondent arising from the Investigation. This agreement should 
not, however, be deemed exoneration of the Respondent or to be construed as a finding 
by the Commission that no violations of the federal securities laws have occurred. 

15. The Respondent understands and agrees that this Agreement does not bind other 
federal, state or self-regulatory organizations, but the Commission may, at its discretion, 
issue a letter to these organizations detailing the fact, manner, and extent of its 
cooperation during the Proceedings or Other Proceedings, upon the written request of the 
Respondent. 

16. The Respondent understands and agrees that if it sells, merges, or transfers all or 
substantially all of its business operations as they exist as of the date of this Agreement, 
whether such a sale is structured as a stock or asset sale, merger, or transfer during the 
Deferred Period, it shall include in any contract for sale, merger, or transfer a provision 
binding the purchaser or successor in interest to the obligations set forth in this 
Agreement. Furthermore, the protections arising from this Agreement will not apply to 
purchasers or successors in interest unless such purchaser or successor enters into a 
written agreement, on terms acceptable to the Division, agreeing to assume all the 
obligations set forth in this Agreement. 

17. The Respondent understands and agrees that the Agreement only provides 
protection against enforcement actions arising from the Investigation and does not relate 
to any other violations or any individual or entity other than the Respondent. 

VOLUNTARY AGREEMENT 

18. The Respondent's decision to enter into this Agreement is freely and voluntarily 
made and is not the result of force, threats, assurances, promises, or representations other 
than those contained in this Agreement. 

4 




19. The Respondent read and understands this Agreement. Furthermore, the 
Respondent has reviewed all legal and factual aspects of this matter with its attorney and 
is fully satisfied with its attorney's legal representation. The Respondent has thoroughly 
reviewed this Agreement with its attorney and has received satisfactory explanations 
concerning each paragraph of the Agreement. After conferring with its attorney and 
considering all available alternatives, the Respondent has made a knowing decision to 
enter into the Agreement. 

20. The Respondent represents that its Board of Directors has duly authorized, in the 
resolution attached as Exhibit B, the execution and delivery of this Agreement, and that 
the person signing this Agreement has authority to bind the Respondent. 

ENTIRETY OF AGREEMENT 

21. This Agreement constitutes the entire agreement between the Commission and the 
Respondent, and supersedes all prior understandings, if any, whether oral or written, 
relating to the subject matter herein. 

22. This Agreement cannot be modified except in writing, signed by the Respondent 
and a representative of the Commission. 

23. In the event an ambiguity or a question of intent or interpretation arises, this 
Agreement shall be construed as if drafted jointly by the parties hereto, and no 
presumption or burden of proof shall arise favoring or disfavoring the Commission or the 
Respondent by virtue of the authorship of any of the provisions of the Agreement. 

[Remainder ofpage intentionally left blank] 

5 




The signatories below acknowledge acceptance of the foregoing terms and conditions. 

RESPONDENT 

I 

Date: Kev?ef~ 
Senior Vice President, 
General Counsel & Secretary 
Nortek, Inc. 
500 Exchange Street, I 0th Floor 
Providence, RI 02903 

On ~ , 3 , 2016, Kevin W. Donnelly, a person known to me, personally 
appearedefore me and acknowledged executing the foregoing agreement with full 
authority to do so on behalf ofNortek, Inc., as its Senior Vice President, General Counsel 
& Secretary and pursuant to the attached Resolution of the Board of Directors. 

NCirary Public 
Stat~ : ~h;d~ k la...('\C, 
Commission number: l/31;:i9 
Commission expiration: J.JI (. a 

I(.;)7 .,;:)(}I ~ 

RESPONDENT'S COUNSEL 

Approved as to form: 'IS~r :;L 
~lf~ . ­
Luke T. Cadigan 
K&L GATES LLP 

SECURITIES AND EXCHANGE COMMISSION 
DIVISION OF ENFORCEMENT 

Date Kara Brockmeyer 
Chief, FCP A Unit 

6 




EXHIBIT A 

STATEMENT OF FACTS 

If this case had gone to trial, the Commission would have presented evidence 
sufficient to prove the following facts: 

Nortek, Inc. 

1. Nortek, Inc. ("Nortek") is incorporated in Delaware with its principal 
place of business in Providence, Rhode Island. Nortek manufactures and sells a wide 
variety of products for residential and commercial constructions and remodeling and the 
personal and enterprise computer markets, including heaters, range hoods, heating, 
ventilation and air conditioning systems, and garage door and security systems. Nortek's 
stock is registered pursuant to Section l 2(b) of the Securities Exchange Act of 1934 
("Exchange Act"), and it is listed on the NASDAQ Global Select Market. 

2. Linear Electronics (Shenzhen) Co. Ltd. ("Linear China") was an indirect 
wholly-owned subsidiary ofNortek located in Shenzhen, China. Linear China 
manufactures products for Nortek, including during the period 2009 through 2014. 

Improper Payments and Gifts to Chinese Government Officials 

3. From at least 2009 to 2014, Linear China's managing director, 
accounting manager, customs liaison officer, and other employees made or approved 
improper payments and gifts to local Chinese officials in order to receive preferential 
treatment, relaxed regulatory oversight, and/or reduced customs duties, taxes, and fees. 

4. The improper payments and gifts to local Chinese officials included cash 
payments, gift cards, meals, travel, accommodations, and entertainment. Linear China 
made the illicit payments to local officials from multiple different governmental 
departments, including customs, tax, fire, police, labor, health inspection, environmental 
protection, and telecommunications. 

5. Linear China's improper payments were systemic and went undetected for 
several years. From 2009 through 2014, Linear China made more than 400 payments to 
local Chinese officials. At least one improper payment was made every month during 
those 5 years. These payments totaled approximately $290,000. 

6. In some instances, Linear China's accounting department entered the illicit 
payments as entries in various accounts and supported the expenditures with false or 
misleading information and supporting documentation. 

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Nortek's Inadequate Internal Accounting Controls 
and Inaccurate Books and Records 

7. As evidenced by Linear China's illicit payments made directly to Chinese 
officials in the ordinary course of business over many years, Nortek failed to devise and 
maintain a system of internal accounting controls at Linear China sufficient to provide 
reasonable assurances that, among other things, transactions were executed in accordance 
with management's general or specific authorization, and transactions were recorded as 
necessary to maintain accountability for assets. Linear China made improper payments 
from multiple accounts, which Nortek failed to review or test. Nortek failed to notice 
obvious red flags in Linear China's financial records, including the number and size of 
Linear China's meals and entertainment expenses. Further, Nortek failed to establish 
procedures to ensure its Linear China employees were trained in anti-corruption 
compliance. 

8. From 2009 through 2014, certain Linear China employees paid bribes 
that were inaccurately recorded in Linear China's books, records and accounts, which 
were consolidated into the books and records of Nortek. 

Nortek's Self-Report 

9. Nortek timely self-reported this matter to the Division of Enforcement and 
conducted a prompt and thorough investigation. In 2014, Nortek conducted an internal 
audit of Linear China's books and records. The internal audit team identified 
questionable payments made to local Chinese officials. As a result, Nortek conducted an 
internal investigation of Linear China's conduct and forensically analyzed Linear China's 
financial records. The internal investigation confirmed Linear China had made improper 
payments to Chinese officials local to Shenzhen, China. Before completing its internal 
investigation, Nortek promptly self-reported its preliminary findings to both the SEC and 
the Department of Justice. 

Remedial Measures and Cooperation 

10. Upon learning of the bribes, Nortek took immediate action to end the 
illicit payments and implemented significant remedial measures. Once the employees at 
Linear China were interviewed by the internal investigation, those involved were 
terminated, including Linear China's managing director and chief financial officer. 
Nortek also comprehensively reviewed its then existing compliance program and 
undertook significant corrective action to enhance its compliance program and ensure 
that its employees around the globe were receiving adequate training. As part of its 
remedial efforts, Nortek: (i) revised its internal audit testing and protocols to focus on 
quickly discovering any FCPA-related improprieties; (ii) strengthened its anti-corruption 
policies; (iii) developed a Compliance Committee consisting of representatives from 
management and subsidiaries to supervise compliance implementation ofNortek's 
policies and training; (iv) provided extensive mandatory in-person and on-line trainings 
on the FCPA and anti-corruption policies to its employees around the globe in 

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appropriate languages; and (v) adjusted its internal audit schedules to prioritize facilities 
located in geographic areas known for higher incidences of corruption. 

11. Nortek provided comprehensive, organized, and real-time cooperation 
with the staff of the Enforcement Division during the course of its internal investigation, 
including: (i) sharing the detailed findings of its internal investigation, including 
identifying all improper payments and potential improper payments made to foreign 
officials and providing its summaries of witness interviews; (ii) timely updating the staff 
with additional findings when its investigation uncovered new information; (iii) 
effectively segregating, organizing, and presenting the most salient documents to the 
staff; (iv) voluntarily translating documents from Chinese into English; (v) voluntarily 
making witnesses available for interviews, including those in China; and (vi) conducting 
a risk assessment to determine whether the improper conduct at Linear China occurred at 
Nortek's other manufacturing locations in China. 

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Kevin W. Donnelly 

NORTEK INC. CERTIFICATE OF CORPORATE RESOLUTION 


I, Kevin W. Donnelly, do hereby certify that I am the duly elected, qualified and acting Senior 
Vice President, General Counsel & Secretary of Nortek, Inc. ("Nortek" or the "Corporation"), a 
Delaware corporation, and that the following is a complete and accurate copy of a resolution 
adopted by the Board of Directors ofNortek at a meeting held on May 3, 2016 at which a 
quorum was present and resolved as follows: 

RESOLVED: That Kevin W. Donnelly, an Officer of this Corporation, be and hereby is 
authorized to act on behalf of the Corporation, and in his sole di scretion, to negotiate, 
approve, and execute the Non-Prosecution Agreement, attached hereto, with the United 
States Securities and Exchange Commission ("Commission") in connection with the 
investigation conducted by the Commission; in this connection, the aforementioned 
Officer be and hereby is authorized to undertake such actions as he may deem necessary 
and advisable, including the execution of such documentation as may be required by the 
Commission, in order to carry out the foregoing. 

I further certify that the aforesaid resolution has not been amended or revoked in any respect and 
remains in full force and effect. 

IN WITNESS WHEREOF, I have executed this Certificate as a sealed instrument this 3 r d day 
ofMay, 2016. 

By: 

Senior Vice President, 
General Counsel & Secretary 
Nortek, Inc. 

l'J....otary~ 

Stat er·6f Rhode Island 

County of Providence 


~lA4A A . If~ 
Dawn Valois 

Notary Public