Code of Ethics
Code of Business Conduct and Ethics and Prohibited Business Practices
May 28, 2015
This Code of Business Conduct and Ethics applies to all vendors and suppliers of The Pampered Chef. Such vendors and suppliers, including you, are referred to herein collectively as the “Covered Parties” and the Pampered Chef and its subsidiaries are referred to herein collectively as the “Company.” Any questions should be directed to the General Counsel of The Pampered Chef.
The Company is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions. To this end, this Code of Business Conduct and Ethics serves to (1) emphasize the Company’s commitment to ethics and compliance with the law; (2) set forth basic standards of ethical and legal behavior; (3) provide reporting mechanisms for known or suspected ethical or legal violations; and (4) help prevent and detect wrongdoing. We expect our vendors and suppliers to operate with the same level of commitment and integrity in all its dealings respecting Pampered Chef business.
Given the variety and complexity of ethical questions that may arise in the Company’s course of business, this Code of Business Conduct and Ethics serves only as a rough guide. Confronted with ethically ambiguous situations, the Covered Parties should remember the Company’s commitment to the highest ethical standards and seek advice from Company representatives to ensure that all actions they take honor this commitment. When in doubt, remember Warren Buffett’s rule of thumb:
‘…I want [people] to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper – to be read by their spouses, children and friends – with the reporting done by an informed and critical reporter.’
- Ethical Standards.
- Conflicts of Interest.
A conflict of interest exists when a person’s private interest interferes in any way with the interests of the Company. A conflict can arise when a Covered Party takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest may also arise when a Covered Party, or members of his or her family, receives improper personal benefits as a result of his or her interactions with the Company. Loans to, or guarantees of obligations of, Covered Parties and their family members may create conflicts of interest. It is almost always a conflict of interest for a Covered Party to work simultaneously for a competitor.
Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with a Company representative. Any Covered Party who becomes aware of a conflict or potential conflict should bring it to the attention of a Company representative or consult the procedures described in Section E of this Code.
- Company Opportunities.
Covered Parties are prohibited from taking for themselves opportunities that are discovered through the use of Company property, information or position without the consent of the Company. No Covered Party may use Company property, information or position for improper personal gain, and no Covered Party may compete with the Company directly or indirectly.
- Fair Dealing.
Covered Parties shall behave honestly and ethically at all times and with all people. They shall act in good faith, with due care, and shall engage only in fair and open competition, by treating competitors, suppliers, customers, and colleagues ethically. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. No Covered Party should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair practice.
The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered or accepted by a Covered Party or any family member of a Covered Party unless it (1) is consistent with customary business practices, (2) is not excessive in value, (3) cannot be construed as a bribe or payoff and (4) does not violate any laws or regulations. The offer or acceptance of cash gifts by any Covered Party is prohibited. Covered Parties should discuss with Company representatives any gifts or proposed gifts which they think may be inappropriate.
- Insider Trading.
Covered Parties who have access to confidential information are not permitted to use or share that information for securities trading purposes (“insider trading”) or for any other purpose except the conduct of the Company’s business. All non-public information about the Company should be considered confidential information.
Covered Parties must maintain the confidentiality of confidential information entrusted to them, except when disclosure is authorized by an appropriate legal officer of the Company or required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors or harmful to the Company or its customers if disclosed. It also includes information that suppliers and customers have entrusted to the Company. The obligation to preserve confidential information continues even after the business relationship with the Company ends.
- Protection and Proper Use of Company Assets.
All Covered Parties should endeavor to protect the Company’s assets and ensure their efficient use. Any suspected incident of fraud or theft must be immediately reported for investigation.
The obligation of Covered Parties to protect the Company’s assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate the agreement and it could also be illegal and result in civil or criminal penalties.
- Compliance with Laws, Rules and Regulations.
Obeying the law, both in letter and in spirit, is the foundation on which the Company’s ethical standards are built. In conducting business with the Company, the Covered Parties shall comply with applicable governmental laws, rules and regulations at all levels of government in the United States and in any non-U.S. jurisdiction in which the Company does business. Although not all Covered Parties are expected to know the details of these laws, it is important to know enough about the applicable local, state and national laws to determine when to seek advice from a Company representative.
The document “Prohibited Business Practices Policy” sets forth the Company’s policy on compliance with laws, specifically addressing such topics as prohibited offers or payments, gifts and entertainment, transactions with certain countries and persons, accounting controls, and accurate record-keeping. This Policy is included in this Book and available to all Covered Parties.
- Conflicts of Interest.
- Violations of Ethical Standards.
- Reporting Known or Suspected Violations.
The Covered Parties shall promptly report any known or suspected violations of this Code to a Company representative.
- Accountability for Violations.
If the Company or its designee determines that this Code has been violated, either directly, by failure to report a violation, or by withholding information related to a violation, the conduct by offending Covered Party may be deemed a breach of contract. Violations of this Code may also constitute violations of law and may result in criminal penalties and civil liabilities for the offending Covered Party. All Covered Parties are expected to cooperate in investigations of misconduct.
- Reporting Known or Suspected Violations.
- Compliance Procedures.
We must all work together to ensure prompt and consistent action against violations of this Code. In some situations, however, it is difficult to know if a violation has occurred. Because we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are the steps to keep in mind:
- Make sure you have all the facts. In order to reach the right solutions, we must be as informed as possible.
- Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? Use your judgment and common sense. If something seems unethical or improper, it probably is.
- Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
- Discuss the problem with the Company representative. This is the basic guidance for all situations.
- Ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.
PROHIBITED BUSINESS PRACTICES POLICY
It is the policy of The Pampered Chef and its subsidiaries (“Company”) to strictly comply with all laws and regulations that apply to any of their activities and operations, or that may give rise to the risk of liability for The Pampered Chef, or persons employed by any of them.
This Prohibited Business Practices Policy applies to all vendors and suppliers of The Pampered Chef (“Covered Party”). Each such Covered Party shall comply with this Policy, strictly abide by all applicable laws and regulations, and exercise great care not to take or authorize any actions that may create even the appearance of illegal conduct or other impropriety. Covered Parties who violate this Policy shall be subject to appropriate legal action.
- COMPLIANCE WITH BOTH U.S. AND FOREIGN LAW IS REQUIRED
This Policy (1) identifies certain specific laws and regulations that may apply to The Pampered Chef and the Covered Party, and (2) sets forth the minimum standards that must be followed to ensure compliance with those laws and regulations. The applicable laws and regulations include not only federal, state and local laws and regulations of the United States, but also laws and regulations of any foreign countries in which The Pampered Chef and Covered Party does business.
This Policy is not exhaustive, and there may be additional laws and regulations that apply that are not discussed here.
Any Covered Party who has a question whether particular conduct could be illegal or involve any unethical or improper act should promptly report his or her concerns. The General Counsel of The Pampered Chef has been designated to receive and investigate such reports and to implement this Policy. Covered Parties may also report their concerns to a Company representative.
If in doubt as to the lawfulness or propriety of particular conduct, a report of the matter should be made so that the issue can be investigated.
- PROHIBITED OFFERS OR PAYMENTS
Each Covered Party must strictly comply with the U.S. law known as the Foreign Corrupt Practices Act (“FCPA”). In layman’s terms, the FCPA prohibits bribes, kickbacks and favors to foreign government officials to obtain an improper advantage, such as the awarding of a government contract.
Prohibited Purposes. To ensure compliance with the FCPA, no Covered Party or its agents may corruptly provide or offer to provide anything of value to a foreign official for any of the following purposes:
- influencing the official;
- securing any improper advantage;
- affecting any official decision; or
- helping the Company obtain or retain business or direct business to any other person or company.
“Corrupt” Payments. The FCPA prohibits providing or offering to provide things of value if done “corruptly.” This means that the payor has an intent or desire to wrongfully influence the recipient and to get something in return, i.e., a quid pro quo. The word “corruptly” is used in the FCPA statute to make clear that the offer, payment, promise or gift must be in-tended to induce the official to misuse his or her official position.
Foreign Officials. Various types of foreign officials are covered by the FCPA. This includes:
- foreign government officials, such as Customs employees;
- officials of a public international organization;
- foreign political parties and their employees; and
- candidates for foreign political office.
Under some circumstances, employees of state owned or controlled entities (whether partially or completely state owned or controlled) may be deemed to be foreign officials under the FCPA. A company may be under government control even if it is publicly traded, and even if some of its stock is not owned by the government. In some countries, government control of publicly traded companies is common. This Policy prohibits providing or offering to provide anything of value to employees or agents of state owned or controlled companies for any of the prohibited purposes described above, even if those companies are engaged in purely commercial businesses.
Indirect and Direct Payments. The prohibition applies not only to direct payments or offers of payment, but also to indirect offers or payments made through any intermediaries or agents. Care must be taken to ensure that third party representatives of the Covered Party, such as sales representatives, consultants, advisors, lobbyists and other contractors, do not offer or provide anything of value to a foreign official for any of the prohibited purposes described above.
Anything of Value. The term “anything of value” is construed very broadly under the FCPA. Each of the following could constitute a “thing of value”:
- monetary gifts in any form (whether cash, check, wire, etc.);
- other types of gifts;
- meals (including drinks);
- entertainment, such as golf outings or sporting events; and
- travel, whether domestic or foreign.
The term also applies to intangible benefits such as contributions to an official’s favorite charity, offers of employment for an official’s friends or family, or other kinds of help or assistance to officials or their friends and family. This Policy applies equally to offers of payment and payments to relatives and family members of foreign officials, as to foreign officials themselves.
Willful Blindness Is Not A Defense. The FCPA can apply to companies or individuals that are willfully blind to improper payments or offers of payment. Covered Parties who suspect or see indications that corrupt payments or offers of payment are being made on the Company’s behalf must not “look the other way” or ignore the indications. For instance, if a Covered Party becomes aware of facts suggesting that money being paid to a sales agent may be provided to a foreign official even if that is not the stated purpose, that concern must be immediately reported to a Company representative. Similarly, each Covered Party should be alert to and promptly report concerns that other employees may be involved in such payments.
Bona Fide and Reasonable Business Expenses. The FCPA permits paying bona fide and reasonable travel and lodging expenses for government officials if the expenses relate directly to (1) the promotion, demonstration or explanation of products or services, or (2) the execution or performance of a contract. To ensure compliance with the FCPA, this Policy permits paying such expenses only upon the advance written approval of the Company’s General Counsel. Where such expenses are approved for payment, any payment should be made to the third party provider (for instance, an airline or hotel) rather than to the foreign official, and any such payments must be supported by receipts and be properly documented. Under no circumstances shall per diem payments or allowances be provided to a foreign official, nor shall the Covered Party pay for any portion of expenses incurred by any spouse or other family member of a foreign official.
Facilitating Payments. Payment by a Covered Party of ‘facilitation or expediting payments’ is prohibited unless such payment has been authorized, in advance and in writing, by the Company General Counsel. All Improper Payments Prohibited. While the FCPA applies only to bribes and kickbacks paid to foreign officials, improper payments to other persons may violate other U.S. laws or the local law of the country in which such payments are made. This Policy expressly prohibits the offering or payment of bribes or kickbacks to any person under any circumstances, whether the recipient is domestic or foreign and whether or not the recipient is a foreign official. Thus, for example, Covered Parties must not offer or pay anything of value to customers or prospective customers or their employees to induce them to award business to the Company or to obtain any other improper advantage. They must also not receive such payments from any person or company in return for providing an improper advantage such as awarding business to such person or company.
- PROHIBITED TRANSACTIONS WITH CERTAIN COUNTRIES AND PERSONS
The Pampered Chef, must strictly comply with all applicable economic and trade sanctions and embargo programs under U.S. law, United Nations resolutions and foreign laws and regulations. Compliance requires careful monitoring of, and sometimes prohibitions on, transactions involving target countries and regimes and target individuals and/or groups of individuals (for example, terrorists and narcotics traffickers). Violations can result in substantial fines, imprisonment and severe restrictions on a company’s ability to do business in the United States and abroad.
The trade restrictions described below apply to “U.S. persons,” which includes all companies organized in the United States and their foreign branches, all companies and employees located in the United States, and all employees who are United States citizens or permanent resident aliens of the United States, wherever located. The U.S. trade restrictions against Cuba described below also apply to subsidiaries of U.S. companies that are organized outside of the United States.
Any potential conflict between local law and the trade restrictions described below should be addressed by the Company General Counsel.
Transactions with Cuba, Sudan, Iran, North Korea and Syria. The United States has instituted comprehensive embargoes and sanctions programs against the following countries:
- Iran; and
- Sudan (with exemptions for certain specified areas of Sudan, and generally excluding the Republic of South Sudan).
These embargoes and sanctions programs prohibit U.S. persons from engaging in or facilitating virtually any commercial or financial transactions involving the embargoed countries. Some examples of dealings that may be restricted include:
- imports into the United States of goods, technology or services from or originating in the embargoed country;
- exports from the United States to the embargoed country of goods, technology or services, either directly or through intermediaries;
- brokering the sale of goods, technology or services to or from the embargoed country, even if the transaction is done entirely outside of the United States;
- providing insurance or reinsurance to businesses or property of the embargoed country or its nationals, or imports from or exports to the embargoed country or its nationals; and
- other transactions in which a financial institution or other person acting on behalf of the embargoed country has any interest.
Under U.S. and foreign laws and regulations, partial embargoes have been instituted against North Korea and Syria. Currently, the following rules are in effect:
- North Korea. Imports into the United States of goods, technology or services of North Korean origin, either directly or through intermediaries, is prohibited without prior U.S. government approval. This broad prohibition applies to goods, technology and services from North Korea that are used as components of finished goods of, or substantially transformed in, a third country. U.S. economic sanctions programs no longer prohibit most exports and sales to North Korea; however, sanctions imposed by the United Nations (which are legally binding on all member states), restrict exports to North Korea of certain goods, technology and services, including defense hardware, related defense services and luxury goods. In addition, depending on the goods involved (for instance, luxury goods), the export may be subject to other U.S. export controls, such as those administered by the U.S. Department of Commerce.
- Syria. Virtually all exports to Syria of items originating in whole or in part from the United States, whether exported directly from the United States or indirectly through a foreign country, are not permitted without prior U.S. government approval. U.S. economic sanctions programs generally do not prohibit imports into the United States from Syria, with some exceptions (for instance, imports of Syrian petroleum and petroleum goods).
To ensure compliance with the foregoing laws, no Covered Party may engage in, facilitate or approve any transactions or conduct of the type described above that directly or indirectly involves Cuba, Iran, Sudan, North Korea or Syria, without the express prior authorization of the Company’s General Counsel.
Transactions with Certain Blocked Individuals, Entities and Groups. The United States has also instituted economic and trade sanctions programs prohibiting certain imports, exports, offshore transactions and financial transactions with designated individuals, entities and groups, without prior U.S. government approval. The U.S. government identifies such individuals, entities and groups by putting their names on various lists.
Some lists include entities that have engaged in conduct that is contrary to U.S. national security and foreign policy. These lists include “Transnational Criminal Organizations,” “Narcotic Traffickers,” “Terrorists Organizations” and proliferators of “Weapons of Mass Destruction.” A second type of list is comprised of persons, entities and groups within certain specified countries or regions, including the Balkans, Belarus, Myanmar (Burma), Cote d’Ivoire (Ivory Coast), Cuba, the Democratic Republic of the Congo, Iran, Iraq, Lebanon, Libya, North Korea, Somalia, Sudan, Syria, Yemen and Zimbabwe.
Collectively, the persons on these lists are known as “Specially Designated Nationals” or “SDNs,” and appear on the U.S. Office of Foreign Assets Control (“OFAC”) master list of “Specially Designated Nationals and Blocked Persons” (the “SDN List”). The SDN List is updated frequently and available on the internet at: http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml
No Covered Party may engage in, facilitate or approve any transactions, or conduct any activities with, any person on the SDN List, whether directly or indirectly, and any prospective dealings with persons on or suspected to be on the SDN List must be immediately reported to the Company’s General Counsel. Each Covered Party that works with vendors should review its vendors and customers against the current SDN List.
Disclosure of Iran-Related Activities. After February 6, 2013, Section 13 of the U.S. Securities Exchange Act of 1934 requires that certain issuers registered with the Securities and Exchange Commission (“SEC”), disclose in their public filings and in separate reports to the SEC if the issuer or any of its affiliates has knowingly engaged in certain specified activities related to Iran. For these issuers, quarterly and annual reports filed after February 6, 2013 must include disclosure on all of the reportable activities that occurred during the period covered by the report (e.g., for an annual report, during the fiscal year), even if the activities occurred before February 6, 2013. Disclosure is required regarding the activities of The Pampered Chef. A broad range of activities is reportable, generally relating to Iran’s energy sector, military capabilities and suppression of human rights. For instance, issuers must disclose when they or any of their affiliates knowingly engage in any of the following:
- certain activities relating to Iran’s petroleum industry, such as providing insurance or reinsurance contributing to Iran’s ability to import refined petroleum products or export crude oil;
- cerain activities facilitating Iran’s ability to acquire or develop conventional weapons or weapons of mass destruction;
- certain activities supporting Iran’s acquisition or use of goods or technologies that are likely to be used to commit human rights abuses against the people of Iran; and
- any other transactions or dealings with the Government of Iran.
In addition, the law requires that issuers disclose any transactions or dealings with any person designated as a global terrorist or proliferator of weapons of mass destruction on the SDN List (whether or not relating to Iran).
The required report must include detailed information such as the nature and extent of the activity, gross revenues and net profits (if any) attributable to the activity, and whether the company intends to continue the activity. Such information is made available to the public, and may result in an investigation or imposition of sanctions by the U.S. government.
To ensure compliance with the law, this Policy prohibits activities involving or relating to Iran or persons from Iran on the SDN List. If any Covered Party has reason to believe that any such activity has occurred, he or she must promptly report the matter to the Company General Counsel, so that a determination may be made as to whether the activity is of the type required to be disclosed under U.S. law. Because there is no materiality threshold for transactions subject to the disclosure requirement, it is important that the Company be made aware of any and all such activities, even those that may seem minor or incidental.
Ongoing Compliance. As anti-terrorism and foreign policy programs evolve and related rules change, the nature and extent of permitted and prohibited activities could change; for instance, additional countries or persons could become subject to embargoes or sanctions programs, or existing embargoes could be lifted or sanctions programs relaxed. Also, additional or different requirements may be applicable to The Pampered Chef companies that are not U.S. persons or that are doing business outside of the United States. Covered Parties should consult with their attorney to confirm compliance with applicable requirements before entering into any contractual or business relationship with persons or involving countries implicating potential anti-terrorism or foreign policy concerns.
U.S. Anti-Boycott Laws. U.S. anti-boycott laws require that U.S. companies and foreign subsidiaries they control refuse to participate in foreign boycotts that the United States does not sanction. Although the anti-boycott laws apply to all non-U.S.-sanctioned boycotts imposed by foreign countries, the Arab League’s boycott of Israel is the principal foreign economic boycott affecting companies. It is the policy of The Pampered Chef to comply fully with all applicable U.S. anti-boycott laws. No Covered Party may take any action that directly or indirectly supports the boycott of Israel or any other foreign boycott not sanctioned by the United States. Any Covered Party with concerns whether a transaction implicates U.S. anti-boycott rules, or the boycott or anti-boycott laws of any other country, should consult a Company’s representative and not proceed with the transaction until advised.
Prior to selecting, retaining and renewing any third party (including any consultant, distributor, commercial agent or joint venture partner) who will represent the Company in financial transactions with customers or in interactions of any kind with government officials, the Covered Party shall conduct appropriate due diligence concerning the prospective third party. Each Covered Party employing the services of such third parties shall develop and maintain due diligence procedures appropriate to the risks presented. Such due diligence shall include, at a minimum, the third party’s character, qualifications, experience, reputation for integrity, and proven ability to provide the service for which it is being retained. Factors weighing against retention of a third party include any unusual requests for compensation and any unusual payment, shipment or destination terms.