EXHIBIT 14
PHOENIX FOOTWEAR GROUP, INC.
POLICIES ON ETHICAL BEHAVIOR
(CODE OF ETHICS)
A. STATEMENT OF PURPOSE
The purpose of these policies is to ensure that all employees adhere to
proper legal and ethical standards in their business relationships, to
reaffirm the strong company commitment to the highest standards of legal
and ethical conduct in its business practices and to consolidate the
various policies concerning this commitment into a single document.
In particular, these policies are intended to deter wrongdoing and to
promote, especially with regard to the Company's chief executive officer,
chief financial officer and chief accounting officer (or controller)
- honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
- full, fair, accurate, timely and understandable disclosure in
reports and documents that the company files with, or submits to,
the Securities and Exchange Commission and in other public
communications made by the company;
- compliance with applicable governmental laws, rules and regulations;
- prompt internal reporting of ethical policy violations to an
appropriate person (or persons) identified in those policies;
- accountability for adherence to these policies.
B. POLICY ON ETHICAL STANDARDS
It has been the longstanding policy of the company to maintain the highest
ethical standards in the conduct of company affairs and in its
relationship with customers, suppliers, employees, advisors and the
communities in which our operations are located.
C. POLICY ON RESPONSIBLE BEHAVIOR
As an integral member of the company team, you are expected to accept
certain responsibilities, adhere to acceptable business principles in
matters of personal conduct, and exhibit a high degree of personal
integrity at all times. This not only involves sincere respect for the
rights and feelings of others, but also demands that in both your business
and personal life, you refrain from any behavior that might be harmful to
you, your co-workers, or the company, or that might be viewed unfavorably
by current or potential customers, or by the public at large. Whether you
are on duty or off, your conduct
reflects on the company. You are, consequently, encouraged to observe the
highest standards of professionalism at all times.
D. POLICY ON USE OF GOOD JUDGMENT
It would be virtually impossible to cite examples of every type of
activity, which might give, rise to a question of unethical conduct.
Therefore, it is important that each of us rely on our own good judgment
in the performance of our duties and responsibilities. When those
situations occur where the proper course of action is unclear, request
advice and counsel from your department head. The reputation and good name
of the company depends entirely upon the honesty and integrity of each one
of us.
E. POLICY ON ETHICAL STANDARDS
All employees must conform to ethical and legal standards to abide by the
law and to preserve the company's integrity and reputation. Failure to
adhere to this policy may result in disciplinary action, up to and
including discharge from employment.
F. POLICY ON GIFTS OF ALL KINDS
The purpose of the policy relating to entertainment, gifts, favors and
gratuities is to avoid any implication that unfair or preferential
treatment will be granted or received by the company's employees in their
course of dealing on behalf of the company. A basic consideration should
be that public disclosure would not be embarrassing to the company or the
recipient. The following guidelines are provided for the applications of
this policy.
- Gifts of cash, or cash equivalents, are never permissible regardless
of amount.
- An especially strict standard is imposed on gifts, services, or
considerations of any kind from suppliers. Only those considerations
which are deemed common business courtesies and are of an
insignificant or nominal value to the recipient will be permitted.
- Gifts, favors, and entertainment may be given to others at company
expense only if they are consistent with accepted business practices
and are of such limited value that they cannot be considered as a
bribe or payoff.
G. POLICY ON FAVORS
Employees may not give or receive any gifts or favors to or from any
customer, supplier, and competitor (other than a gift of nominal value)
without the prior consent of a manager. In no event shall an employee give
or receive a gift in the form of cash, stocks, bonds, options, or similar
types of items.
It is impermissible and may be unlawful to give, offer, or promise
anything of value for the purpose of influencing someone in connection
with company business or a company transaction. Similarly, it is
impermissible and may be unlawful to solicit, demand, or accept anything
of value with the intent of being influenced or rewarded concerning any
company business or transaction. Therefore, no employee may give or
receive any gift if it could reasonably be viewed as being done to gain a
business advantage.
Employees are not prevented from incurring normal business-related
expenses for entertainment or from accepting personal mementos of minimal
value. It is acceptable to occasionally allow a supplier or customer to
pay for a business meal.
H. POLICY ON BRIBES
The company will pay only those agents with whom it has a formal written
agreement and from whom it has an invoice detailing the amount to be paid.
Employees must ensure that vouchers properly identify commissions.
An employee may make payment to an agent for only the amount that
constitutes the proper remuneration for the service rendered by the agent.
An employee may not make a commission or any other payment if that
employee knows or has reason to know the payment will be used as a bribe.
I. POLICY CLARIFYING MEANING OF "INSIDE" INFORMATION
U.S. Securities regulations, which regulate transactions in corporate
securities (stocks and bonds), impose severe sanctions against the use of
"inside" information in the purchase and sale of securities by officers
and employees of a company for their own benefit and profit. "Inside"
information includes any important material fact, which might be a factor
in a decision to buy or sell a particular security. The "insider" includes
not only the employee, but family members, friends, brokers, or anyone to
whom the information is communicated by the employee. The securities
include not only those of the company, but also the securities of any
company of which you have acquired important, non-public knowledge because
of your employment. Specifically, you should not trade in the securities
of any company which, to your knowledge, is under consideration as an
acquisition by the company.
Regulations which are designed to protect the investing public are
strictly enforced, and both civil and criminal action can be taken against
both the individual and company involved. If you have any doubts as to
whether a contemplated securities transaction might be deemed a violation
of the "insider" trading rule, you should contact the Chief Financial
Officer.
J. POLICY PROHIBITING CERTAIN INVESTMENTS
Employees are prohibited from investing in any of the company's customers,
suppliers or competitors unless the securities are publicly traded and the
investments are on the same terms available to the public and not based on
any "inside information." This prohibition applies to all forms of
investments and to all employees, directors, officers, and agents of the
company and their immediate families.
In general, employees should not have any financial interest in a
customer, supplier, or competitor that could cause divided loyalty, or
even the appearance of divided loyalty.
K. POLICY ON CONFLICTS OF INTEREST
If an employee is hired for a position that gives the employee the
authority to spend company funds or set company policy, it is an implicit
condition of his or her employment that the employee use the authority in
the company's interest.
L. POLICY LISTING TYPES OF CONFLICTS OF INTEREST
The term "conflict of interest" describes any circumstances that would
cast doubt on an employee's ability to act with total objectivity
concerning the company's interest. Each employee is expected to avoid any
action or involvement, which would in any way compromise his or her
actions on behalf of the company. Activities which could raise a question
of conflict of interest include, but are not limited to, the following:
- To conduct business on behalf of the company with a member of the
employee's family or a business organization in which the employee
or a member of his or her family has a significant association,
which could give rise to a conflict of interest, without first
obtaining a written non-objection from an officer of the company.
- To serve in an advisory, consultative, technical, or managerial
capacity for any nonaffiliated business organization, which does
significant business with or is a competitor of the company, without
first advising their department head of such plans.
M. POLICY PROHIBITING CONFLICTS OF INTEREST
Every employee is prohibited from partaking in any activity or association
that creates or appears to create a conflict between the employee's
personal interests and the company's business interests. In addition, an
employee must not allow any situation or personal interests to interfere
with the exercise of independent judgment or with that employee's ability
to act in the best interests of the company.
N. POLICY ON DISCLOSING CONFIDENTIAL INFORMATION
Employees have an ethical duty not to disclose confidential information
gleaned from business transactions and to protect confidential
relationships between the company and its customers, suppliers, and
stockholders.
Business information that has not been made public (e.g., insider
information) shall not be released to private individuals, organizations,
or government bodies unless demanded by legal process such as a subpoena
or court order. Employees shall not use confidential information obtained
in the course of their employment for the purpose of advancing any private
interest or otherwise for personal gain.
Employees should refer any requests for information (reference checks,
credit reporting, etc.) about present or former employees of the company
to the Human Resource Manager.
O. POLICY ON CONFIDENTIALITY
The company possesses and will continue to possess information that has
been created, discovered, and developed by the company; has been disclosed
to the company under the obligation or confidentiality; or has otherwise
become known to the company or in which property rights have been assigned
or conveyed to the company, which information is confidential to the
company and which information has commercial value in the business of the
company. All such information, except such information as is known or
becomes known to the public without violation of the terms of this
paragraph, is hereafter called "Confidential and Proprietary Information."
By way of illustration, but not limitation, Confidential and Proprietary
Information includes customer lists, subscription lists, details of author
or consultant contracts, pricing policies, financial statements,
projections, marketing plans or strategies, new product developments or
plans, business acquisition plans, new personnel acquisition plans, trade
secrets, operation methods, software and computer programs. During the
employee's employment with the company and after termination (whether
voluntary or involuntary) of the employee's employment with the company or
any of its affiliates, the employee shall keep secret and retain in
strictest confidence all such Confidential and Proprietary Information.
Nothing contained in this paragraph shall be deemed to prevent the
employee from utilizing his or her general knowledge, intellect,
experience, and skills for gainful employment after termination of
employment with the company.
P. POLICY ON BOOKS, RECORDS AND DOCUMENTS
Reporting accurate, complete and understandable information about the
company's business, earnings and financial condition is an essential
responsibility of all employees.
All memoranda, notes, lists, records and other documents (and all copies
thereof) made or compiled by the employee or made available to the
employee concerning the business of the company or any of its affiliates
shall be the company's property and shall be delivered to the company
promptly upon the termination of the employee's employment with the
company or any of its affiliates or at any other time on request.
You must retain all documents (including computer records) in your custody
or control which relate to any imminent or ongoing investigation, lawsuit,
audit or examination involving the company. The shredding or other
alteration of documents or records in order to impede a government
investigation, audit or examination may lead to prosecution for
obstruction of justice.
Q. POLICY ON OUTSIDE EMPLOYMENT
No employee may serve as an employee, director, or officer of any supplier
or customer without the prior written approval of the director of human
resources. An employee may never serve as an employee, director, or
officer of a competitor but may serve as an adviser or consultant to a
supplier or customer if that employee conducts business as a
representative of this company. Officers of the company may not engage in
any outside employment other than work as a volunteer.
Any employee who does perform outside work has a special responsibility to
avoid any conflict with the company's business interests. Outside work
cannot be performed on this company's time.
R. POLICY ON DOING BUSINESS WITH FAMILY MEMBERS
If an employee wishes to do business on behalf of the company with a
member of that employee's immediate family or other relative or with a
company of which a relative is an officer, director, or principal, the
employee must first disclose the relationship and obtain the prior written
approval of the manager in charge of human resources or the general
counsel.
S. POLICY ON EMPLOYMENT OF RELATIVES AND PERSONAL RELATIONSHIPS AMONG
COWORKERS
EMPLOYEE OF RELATIVES. The employment of relatives of employees is
permitted by the company, as long as qualifications for the position are
met and, in the opinion of the company, employing the relative will not
create an actual or perceived conflict of interest. Employees will not be
permitted to work in positions where relatives will influence, or be
influenced by, decisions affecting work. assignments, responsibilities,
salary, promotion or other career matters. Managers who seek to hire,
transfer or
promote their own relatives must obtain prior written approval from their
manager or the human resources department.
RELATIVE DEFINED. Relatives include spouse, parent, parent-in-law, child,
grandparent, grandchild, sister/brother, sister-brother-in-law,
aunt/uncle, niece/nephew, and any individual with whom an employee has a
personal relationship.
PERSONAL RELATIONSHIPS. Because personal relationships may create an
actual or perceived conflict of interest, supervisors may not hire,
promote or directly supervise any person with whom they have a personal
relationship, nor may they engage in any personal relationships with their
subordinates.
PERSONAL RELATIONSHIP DEFINED. A personal relationship includes,
but is not limited to the following activities: dating, sharing the
same household or living together.
NOTICE. An employee must notify the company if his or her relationship to
another employee changes to fit the definition of "relative" above. If a
personal relationship develops between a supervisor and subordinate, both
employees are required to inform the director of human resources.
COMPANY DISCRETION. The company reserves the right to use its discretion
in hiring and placing relatives of its current employees in a manner
calculated to eliminate potential conflicts of interest. To do this, the
company will take action that is fair and equitable and that will remove
any direct reporting or management relationship between employees who are
defined as "relatives."
T. POLICY ON POLITICAL ACTIVITIES
The company has a policy of not contributing to political parties or
candidates or lobbying on their behalf. Employees may enjoy membership in
and contribute to political parties, trade associations, and similar
organizations. However, any political activity is strictly on the
employee's own time and at the employee's own expense.
U. POLICY ON CORPORATE FUNDS AND ASSETS
Employees are forbidden to use, directly or indirectly, corporate funds
and assets for any unlawful purpose or to accomplish any unlawful goal.
The company also prohibits the establishment or maintenance of undisclosed
or unrecorded funds and assets.
All reporting of information should be accurate and timely. Employees may
not make any false or misleading entries in any books and records.
V. POLICY LISTING GENERAL ETHICAL REQUIREMENTS
Employees should read the code of ethics with the following in mind.
- The company requires every employee to comply with these standards.
- This list is not comprehensive. The company encourages employees who
have questions about these standards and their application to
employee conduct to discuss them with their manager, the general
counsel or with the director of human resources.
- An employee who knows or has reason to know of any activity that
violates or could violate these standards must promptly report the
matter to the director of human resources.
- Each employee will be given a copy of these standards and be asked
to sign an Employee Acknowledgment Form.
W. POLICY REGARDING WHISTLEBLOWERS
The integrity of the company's internal accounting controls, procedures
and practices is vital to the company's reputation among its stockholders,
potential stockholders, customers, suppliers and employees. Employees who
become aware of any questionable accounting or auditing matters should
inform the company's chief financial officer or the Chairman of the Audit
Committee of the Board of Directors (whose address is listed on the
company's website). The report may be made anonymously; but if not, the
identity of the reporting person will be kept confidential and no
retaliation will be allowed.
X. EMPLOYEE PRIVACY POLICY
In recognition of employees' privacy rights, the company has adopted these
basic policies:
1. The company will limit collection of employee information to
that needed for business and legal purposes.
2. The company will protect the confidentiality of all personal
information in employee records. It will refuse to release personal
information to outside sources without an employee's written
approval, unless legally required to do so.
3. The company will limit record access to staff members with an
authorized, business-related `need to know' or to third parties that
have obtained a court order or subpoena for specified employee
records.
Staff who handles personnel records must adhere to these basic policies or
face disciplinary action.
Y. POLICY ON DISCLOSURE
The company is committed to providing accurate information to the public
in a timely, orderly and consistent manner through its Chief Executive
Officer and Chief Financial Officer who shall comply with applicable laws
and rules regarding the selective disclosure of material, non-public
corporate information.
Adopted February 5, 2004