This Code of Business Conduct and Corporate Ethics Policy (the “Code”) is a statement of Warnaco’s policies and procedures for conducting its business in a legal and ethical manner. It is provided to all employees in order to reaffirm Warnaco’s existing policies relating to ethical standards and business practices.
All policies and procedures in the Code apply to all Warnaco employees and agents, its divisions and affiliates (collectively “Warnaco”), whether operating in the United States or in any other countries where Warnaco does business. References to employees in the Code also include temporary employees, contractors and agents.
Warnaco expects all employees to observe high ethical standards in the performance of their duties, and to observe all laws and regulations governing business transactions and practices. Warnaco’s policy is to prevent the occurrence of illegal or unethical behavior, to halt any illegal or unethical behavior that may occur as soon as reasonably possible after its discovery, and to discipline those who violate the Code, including individuals responsible for the failure to exercise proper supervision and oversight to detect and report a violation by their subordinate employees. Discipline may, when appropriate, include termination.
Government regulation of business activities continues to increase, which results in more complex laws, regulations and procedures. Accordingly, whenever the legality or propriety of any proposed course of conduct is subject to question, it is incumbent upon the employee involved to obtain advice concerning these policies from the person to whom he or she reports, and, when appropriate, to request advice from Warnaco’s General Counsel. An employee who has a question regarding the applicability or interpretation of the Code should follow the procedures specified in the section entitled “Implementation Of The Code.” The Code is not a contract, and is not intended to create any contractual obligations on the part of Warnaco or its subsidiaries or affiliates. The Code also does not alter the existing at-will employment relationship between Warnaco and its employees described in Section I (c) of this Handbook.
Warnaco employees shall comply with the laws and highest standards of business ethics and conduct in every country in which Warnaco does business. Each employee is responsible for his or her own actions. All employees must acquaint themselves with the legal standards and restrictions applicable to their assigned duties and responsibilities, and conduct themselves accordingly. Each employee also should understand that compliance with the letter of the law, but not the spirit, is insufficient. Even the appearance of unethical or inappropriate behavior could have a negative impact on Warnaco and its employees.
Each employee must avoid any investment, interest, or association that interferes or might interfere with the independent exercise of his or her own individual best judgment, and with the employee’s obligation to perform his or her responsibilities in Warnaco’s best interests. Specifically:
All employees shall deal with all suppliers, customers, and all other persons doing business with Warnaco in a completely fair and objective manner without favor or preference based upon personal financial considerations.
Employees shall not accept from or give to any supplier, customer or competitor any gift or entertainment (except as permitted under the section of the Code entitled “Gifts And Entertainment”).
No employee shall do business with a close relative on behalf of Warnaco, unless the transaction is on arms-length terms and is disclosed, in writing, to Warnaco’s General Counsel (and so long as the General Counsel determines that the transaction is not inconsistent with the purposes of this policy).
No employee shall, directly or indirectly, own any financial interest in or hold any employment or managerial position with any firm or corporation which is a competitor of or which does or seeks to do business with Warnaco if such interest or position may influence any decision that such employee might make in the performance of his or her duties.
All employees have the affirmative duty to disclose to the corporate officer responsible for their function the existence of any personal material financial interest in or employment or managerial position with any firm or corporation that is a competitor of or which seeks to do or does business with Warnaco. Each corporate officer shall review each such case with the General Counsel, and they shall determine whether the existence of such interest or position is or may be in conflict with this policy or otherwise detrimental to the best interests of Warnaco or any of its operations. If it is determined that such conflict or detrimental effect may occur, such steps as are necessary to correct the situation will be immediately instituted.
The disclosure of trade secrets and confidential information regarding Warnaco business or scientific operations, whether intentional or accidental, can adversely affect Warnaco’s financial stability and the job security of its employees. Because of this risk of harm, no employee shall, without Warnaco’s President’s written consent, during the term of employment or thereafter, use, directly or indirectly, for the benefit of such employee or others, or disclose to others, any trade secrets or confidential information obtained during the course of employment.
Each employee shall promptly report to the appropriate immediate supervisor any attempt by outsiders to obtain trade secrets or confidential information or any unauthorized use or disclosure of trade secrets or confidential information by other employees.
No employee shall seek or accept, any payments, fees, loans, services, or gifts from, or offer to give same, to any person or firm as a condition or result of doing business with Warnaco. Warnaco’s policy is intended to permit gifts of reasonable value, normal business meals and entertainment, the exchange of customary reciprocal courtesies between Warnaco employees and their business associates, and similar customary and reasonable expenditures to promote general business goodwill.
Reasonable expenditures for gifts to, and the entertainment of business contacts by, Warnaco employees may be made if the expenditures have been appropriately authorized and are correctly recorded on the books of the paying entity. However, entertainment or gifts shall not be of substantial monetary value nor exceed that value customarily and openly provided by Warnaco’s responsible competitors in the area involved.
With respect to gifts to, and entertainment of government officials or employees, this policy is subject to the provisions of the Code entitled “United States Government Payments” and “Foreign Government Payments.”
All Warnaco books, records and accounts must accurately reflect the nature of the transactions recorded. All Warnaco assets and liabilities must be recorded in the regular books of account. No undisclosed or unrecorded fund or asset shall be established in any amount for any purpose. No false or artificial entries shall be made for any purpose. No payment shall be made, or purchase price agreed to, with the intention or understanding that any part of such payment is to be used for any purpose other than that described in the document supporting the payment. This policy is not limited to accounting and auditing personnel. It applies to all employees, including anyone negotiating and authorizing sales and purchase contracts, submitting expense reports, or preparing or paying invoices.
It is Warnaco’s policy that:
(1) No Warnaco funds or services shall be paid or furnished to any political party or any candidate for or incumbent in any public office for political purposes except as expressly permitted pursuant to paragraph (2) of this provision. Although employees are permitted to make personal contributions, Warnaco shall not reimburse an employee for any such contribution.
(2) (a) For United States:
Federal Elections: It is unlawful for Warnaco to make a contribution or expenditure in connection with any United States federal election, or in connection with any primary election or political convention held to select candidates for any federal office.
State and Local Elections: No contributions of Warnaco’s funds or resources to state or local officials or candidates shall be made without the prior written approval of the Chairman of the Board and the General Counsel.
(b) For Foreign Countries:
No
deviation from the prohibitions set forth in paragraph (1) of this provision may
be made in any country outside of the United States without the prior written
approval of the General Counsel.
Approval shall be given only after there has been a determination that
such payment or the furnishing of such services is consistent with the laws and
highest standards of business ethics and conduct of the country involved.
No employee shall directly or indirectly give, offer or promise any form of bribe, gratuity, or kickback to a United States official or employee, or any state, local, or municipal official or employee.
Warnaco competes on the basis of price, quality, and service. Therefore, it is Warnaco’s policy to comply with the United States Foreign Corrupt Practices Act, and with all local laws applicable to governmental payments. It is Warnaco’s policy that no employee shall directly or indirectly pay, give or offer money or anything of value to any foreign government officer, employee or representative, or to any foreign political party or candidate for or incumbent in any foreign political office, in order to assist in obtaining, retaining or directing business. Accordingly, all laws of foreign countries must be strictly observed.
All employees have an obligation to deal with Warnaco’s customers and suppliers in a consistently legal, fair, and honorable manner. All contractual arrangements and transactions with third parties, such as distributors, customers, or consultants, must be formalized in a written contract or purchase order that provides for services that are in fact to be performed, and for reasonable fees. No commission payment shall be made in excess of those required in the ordinary course of business, and such payments shall be made strictly in accordance with Warnaco’s approval process. Neither Warnaco nor any employee shall make any payment for the benefit of any supplier, customer, distributor, or other person for the purpose of inducing that person to act against the interest of his or her employer.
Warnaco is committed to providing its employees with a safe and healthy work environment. Employees shall comply with all applicable occupational health and safety laws and regulations.
Warnaco has consistently maintained a policy of strict compliance with all aspects of the antitrust laws. U.S. antitrust laws govern Warnaco’s conduct and transactions with its competitors, customers, and suppliers. Severe criminal and civil penalties may be imposed on Warnaco and on its employees if an employee authorizes or participates in a violation of the antitrust laws. Therefore, it is important to understand and strictly follow this policy so Warnaco and its employees may avoid even the appearance of an antitrust violation.
In order to avoid activities that may raise inferences of a violation or result in allegations of a violation of antitrust laws, the following policies shall apply:
(1) No employee shall enter into any understanding, agreement, plan, or scheme which he or she has reason to believe or has been advised by Warnaco’s counsel is illegal under any of the antitrust laws.
(2) No employee shall exchange or discuss with any competitor information relating to Warnaco prices or pricing policies, distribution policies, supplier or customer selection or classifications, credit policies, or any other similar competitive information.
(3) No employee shall knowingly participate in any formal or informal meetings with third parties at which agreements or understandings of the type described in Paragraph 1 are being made or at which information of the type described in Paragraph 2 is being exchanged or discussed.
It is Warnaco’s policy and practice to promote the protection of people and the environment as a part of everything we do and every decision we make. Warnaco’s goal is to avoid creating any situation that may lead to unacceptable environmental, health, or safety hazards for employees, the public, or the environment. Accordingly, all Warnaco employees, and all of its facilities and operations, shall comply with all applicable environmental laws, rules, and regulations, including those dealings with emissions to the atmosphere, discharges to surface or underground waters or publicly owned treatment works, drinking water supplies, solid and hazardous waste management, releases of hazardous substances, community emergency response planning, and toxic substances control.
Warnaco encourages investment in its publicly traded securities by those associated with the company. However, no employees, regardless of their position with Warnaco, should purchase or sell, directly or indirectly through third persons, Warnaco’s stock on the basis of material information known to them but not to the public. If a person possesses material non-public information concerning a corporation, it is illegal for the person to trade in securities of the corporation. No Warnaco director, officer or employee, or third party who is in a confidential relationship with Warnaco, shall trade in or recommend the purchase or a sale of Warnaco’s common shares (or any other securities) while they are in possession of “material information” regarding the operations or prospects of Warnaco that has not been publicly disclosed and disseminated to the investment community. All such persons must also abstain from trading in, or recommending the purchase or sale of the securities of any other corporation of which they have obtained unpublicized “material information” as a result of their employment by Warnaco. “Material information” is information that, if publicly disclosed, could reasonably be expected to affect the market value of a corporation’s securities or to influence investor decisions with respect to those securities. Specific examples of “material information” include generally unanticipated changes in annual and quarterly earnings or dividend rates, significant acquisitions, proposed tender offers or stock splits, and senior management changes. Information regarding major new products, contract awards, expansion plans, or significant litigation or regulatory proceedings may also fall in the category of “material information.” For a more detailed discussion of this policy, please consult Warnaco’s Statement of Policy Concerning Purchases and Sales of Company Securities and Conflicts of Interest dated August 2003.
1. Corporate Compliance Officer
The General Counsel is the Corporate Compliance Officer responsible for implementation of Warnaco’s compliance program, including the Code.
2. Questions Regarding The Code
An employee who has a question regarding the applicability or interpretation of the Code should direct the question to:
• his or her manager;
• another managerial employee; or,
• an employee relations representative.
Questions may also be directed to the General Counsel, either in person, in writing, or by calling extension 8282 in New York.
3. Reporting Of Violations
If an employee knows of a violation or possible violation of the Code, the employee should immediately report it to:
• his or her manager;
• another managerial employee; or
• an employee relations representative.
An employee may also report a violation or possible violation of the Code directly to the General Counsel. Any manager, or employee relations representative receiving such a report must, when appropriate, immediately advise the General Counsel. Written reports to the General Counsel should be addressed to Jay A. Galluzzo, and marked “CONFIDENTIAL - TO BE OPENED BY THE GENERAL COUNSEL ONLY.” Telephone reports to the General Counsel should be directed to extension 8282 in New York. There shall be no reprisals for good faith reporting of actual or possible violations of the Code. Any employee who retaliates against anyone asserting any complaint or alleged violation of the Code shall be subject to discipline, including possible termination.
Any employee of the Company may also submit, on an anonymous basis if the employee so desires, any concerns regarding financial statement disclosures, accounting, internal accounting controls, misuse or inappropriate use of corporate assets or auditing matters by setting forth such concerns in writing and forwarding them in a sealed envelope to the Chair of the Audit Committee, P.O. Box 114, 244 Madison Avenue, New York, New York 10016, such envelope to be labeled with a legend such as: “To be opened by the Audit Committee only.” If an employee would like to discuss any matter with the Company’s Audit Committee, the employee should indicate this on the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate. Absent an express waiver of confidentiality in the written submission, the identity of any employee who makes such a submission or otherwise communicates with the Audit Committee shall remain strictly confidential.
At each of its meetings, including any special meeting called by the Chair of the Audit Committee following the receipt of any information pursuant to the paragraph above, the Audit Committee shall review and consider any such complaints or concerns that it has received and take any action that it deems appropriate in order to respond to such complaints or concerns.
4.
Investigation Of Violations
Warnaco will promptly investigate all reported violations of the Code and will treat all such reports confidentially to the extent consistent with Warnaco’s interests and its legal obligations. The General Counsel will direct all investigations by Warnaco of wrongdoing. Employees are expected to cooperate in the investigation of an alleged violation of the Code. If the result of the investigation indicates that corrective action is required, Warnaco will decide what steps it should take, including, when appropriate, legal proceedings, to rectify the problem and avoid the likelihood of its recurrence.
5. Discipline for Violations
Disciplinary actions may be taken for:
• Authorization or participation in actions that violate the Code;
• Failure to report a violation of the Code;
• Refusal to cooperate in the investigation of a violation of the Code;
• Failure by a violator’s supervisor(s) to detect and report a violation of the Code, if such failure reflects inadequate supervision or lack of oversight; or,
• Retaliation against an individual for reporting a violation of the Code.
Disciplinary action may, when appropriate, include termination.
6. Acknowledgement
The acknowledgment for the Code requires employees to confirm that they have received and read the Code, understand it, and will comply with it.