Exhibit 14
NATHAN'S FAMOUS, INC.
CODE OF BUSINESS CONDUCT
E - 1
I. INTRODUCTION
A. Code of Business Conduct
The Company's Code of Business Conduct (the "Code") is a statement of the
Company's policies and procedures for conducting its business in a legal and
ethical manner. It has been issued to all employees in order to reaffirm the
Company's existing policies relating to ethical standards and business
practices.
The Code includes provisions from existing corporate policies to provide
an accessible reference for all employees. Certain corporate policies set forth
more detailed information on subjects covered by the Code.
All policies and procedures in the Code apply to all employees and agents
of the Company, its subsidiaries, divisions and affiliates (collectively the
"Company"), whether operating inside or outside of the United States. References
to employees in the Code also include agents.
The Company expects you, and all its other employees, to observe high
ethical standards in the performance of your respective duties, and to observe
all laws and regulations governing business transactions and practices. The
Company expects you to act in good faith, responsibly, with due care, competence
and diligence, without misrepresenting or omitting material facts or allowing
your independent judgment to be compromised or subordinated and to pro-actively
promote ethical behavior among your subordinates and peers. The Company'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.
B. Guidance and Interpretation
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 which you are
involved in is subject to question, it is incumbent upon you to obtain advice
concerning these policies from the person to whom you report, and, when
appropriate, to request advice from the Company's General Counsel. If you have a
question regarding the applicability or interpretation of the Code you should
utilize 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 THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES. THE
CODE ALSO
E-2
DOES NOT ALTER THE EXISTING AT-WILL EMPLOYMENT RELATIONSHIP BETWEEN THE COMPANY
AND YOU.
II. COMPLIANCE WITH THE LAW
As an employee of the Company, you are required to comply with applicable
laws, rules and regulations for federal, state, and local governments applicable
to the Company, and with the rules and regulations of private and public
regulatory agencies having jurisdiction over the Company, as well as the highest
standards of business ethics and conduct in every country in which the Company
does business. You cannot justify or be excused from the consequences of an
action which is prohibited by the Company by saying that you were ordered to
perform the action by someone higher in authority. No one is ever authorized by
the Company to direct you to commit a prohibited act. You are responsible for
your own actions. You must acquaint yourself with the legal standards and
restrictions applicable to your assigned duties and responsibilities, and
conduct yourself accordingly. You 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 the
Company and its employees.
III. CONFLICTS OF INTEREST
You must engage in honest and ethical conduct and avoid any investment,
interest, or association that might cause an actual or apparent conflict of
interest between your personal relationships and your obligation to perform your
responsibilities in the best interests of the Company. Specifically:
(1) You shall deal with all suppliers, customers, and all other persons doing
business with the Company in a completely fair and objective manner
without favor or preference based upon personal financial considerations.
(2) You 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 on "GIFTS AND ENTERTAINMENT").
(3) You shall not do business with a close relative on behalf of the Company,
unless the transaction is on arms-length terms and is disclosed, in
writing, to the President of the Company (and so long as the Company's
legal counsel determines that the transaction is not inconsistent with the
purposes of this policy).
(4) You shall not, 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 the
Company if such interest or position may influence any decision that you
might make in the performance of your duties.
E-3
(5) You have the affirmative duty to disclose to the corporate officer
responsible for your function, the existence of any personal material,
financial interest in, or employment or managerial position with any firm
or corporation which is a competitor of or which seeks to do or does
business with the Company. Each corporate officer shall review each such
case with the Company's legal 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 the Company
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.
IV. TRADE SECRETS AND CONFIDENTIAL INFORMATION
The disclosure of trade secrets and confidential information regarding the
Company's business operations, whether intentional or accidental, can adversely
affect the financial stability of the Company and the job security of its
employees. Because of this risk of harm to the Company and its employees, you
shall not, without the prior written consent of the Company, during the term of
your employment or afterwards, use, directly or indirectly, for your benefit or
the benefit of others, or disclose to others, any trade secrets or confidential
information which you obtained during the course of your employment, including
by participating in Internet "chat rooms," through postings on Internet message
boards or otherwise.
You shall return any of the Company's confidential information at the
Company's request or upon any termination of your employment.
V. GIFTS AND ENTERTAINMENT
You shall not seek or accept, or offer or give any payments, fees, loans,
services or gifts from or to any person or firm as a condition or result of
doing business with the Company. The Company's policy is intended to permit
gifts of reasonable value, normal business meals and entertainment, the exchange
of customary reciprocal courtesies between employees of the Company 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 Company 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 responsible
competitors of the Company in the area involved.
With respect to gifts to, and entertainment of, government officials or
employees, this policy is subject to the provisions of "UNITED STATES GOVERNMENT
PAYMENTS" and "FOREIGN GOVERNMENT PAYMENTS."
E-4
VI. ACCURACY AND INTEGRITY OF REPORTS, BOOKS, RECORDS AND ACCOUNTS
All employees must perform their responsibilities with a view to causing
periodic reports and documents filed with or submitted to the Securities and
Exchange Commission and all other public communications made by the Company to
contain information which is accurate, complete, fair, objective, relevant,
timely and understandable.
All of the Company's books, records, accounts and financial statements
must accurately reflect the nature of the transactions recorded and must conform
both to applicable legal and accounting requirements and to the Company's system
of internal controls. All assets and liabilities of the Company 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.
All employees are responsible to report to the Company any concerns regarding
questionable accounting and auditing matters that may come to their attention.
You may submit a good faith complaint regarding accounting or auditing
matters without fear of dismissal or retaliation of any kind. The Company is
committed to achieving compliance with all applicable securities laws and
regulations, accounting standards, accounting controls and audit practices. The
Company's Audit Committee will oversee treatment of employee concerns in this
area.
In order to facilitate the reporting of employee complaints, the Company's
Audit Committee has established procedures for (1) the receipt, retention, and
treatment of complaints regarding accounting, internal accounting controls, or
auditing matters ("Accounting Matters") and (2) the confidential, anonymous
submission by employees of concerns regarding questionable Accounting Matters.
If you have any concerns regarding questionable Accounting Matters, you are
encouraged to report your concerns by using the toll-free number established by
the Company for that purpose. (See "IMPLEMENTATION OF THE CODE-Reporting of
Violations," below.)
Examples of questionable Accounting Matters include, without limitation,
the following:
- - fraud or deliberate error in the preparation, evaluation, review or audit
of any financial statement of the Company;
E-5
- - fraud or deliberate error in the recording and maintaining of financial
records of the Company;
- - deficiencies in or noncompliance with the Company's internal accounting
controls;
- - misrepresentation or false statement to or by a senior officer or
accountant regarding a matter contained in the financial records,
financial reports or audit reports of the Company; or
- - deviation from full and fair reporting of the Company's financial
condition.
Should you make a complaint, it will be forwarded to the Chairman of the
Audit Committee who will (i) determine whether the complaint actually pertains
to Accounting Matters and (ii) when the complaint is not made anonymously,
acknowledged receipt of the complaint to the sender. Complaints relating to
Accounting Matters will be reviewed under Audit Committee direction and
oversight by the Company's Independent Auditor, legal counsel, or such other
person as the Audit Committee determines to be appropriate. Confidentiality will
be maintained as required by law. Prompt and appropriate corrective action will
be taken when and as warranted in the judgment of the Audit Committee.
The Company will not discharge, demote, suspend, threaten, harass or in
any manner discriminate against any employee in the terms and conditions of
employment based upon any lawful actions of such employee with respect to good
faith reporting of complaints regarding Accounting Matters or otherwise
specified in Section 806 of the Sarbanes-Oxley Act of 2002.
The Company's legal counsel will maintain a log of all complaints,
tracking their receipt, investigation and resolution and shall prepare a
periodic summary report thereof for the Audit Committee. Copies of complaints
and such log will be maintained in accordance with the Company's document
retention policy.
VII. POLITICAL CONTRIBUTIONS
It is Company Policy that:
(1) No Company 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 you are permitted to
make personal contributions, the Company shall not reimburse you for
any such contribution.
(2) (a) For United States:
(i) Federal Elections:
E-6
It is unlawful for the Company 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.
(ii) State and Local Elections:
No contributions of the Company'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 Company's legal 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 Company's legal 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.
VIII. UNITED STATES GOVERNMENT PAYMENTS
You shall not 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.
IX. FOREIGN GOVERNMENT PAYMENTS
The Company competes on the basis of price, quality, and service.
Therefore, it is the policy of the Company to comply with the United States
Foreign Corrupt Practices Act, and with local law applicable to governmental
payments. It is the Company's policy that you and its other employees shall not
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.
X. EQUAL EMPLOYMENT OPPORTUNITY LAWS
It is the policy of the Company to provide employment opportunities
without regard to race, color, religion, sex, national origin, age, disability,
marital status, citizenship status, sexual
E-7
orientation or status as a Vietnam-Era Veteran or Disabled Veteran, or any
protected characteristics set forth by local, state and federal fair employment
practice statutes.
XI. HARASSMENT
It is the policy of the Company to maintain a work environment free from
harassment and/or intimidation of any type. The Company believes that every
employee has the right to work in an environment totally free of discrimination,
sexual harassment, and ethnic, racial, discriminatory, or sex-oriented joking or
epithets. Such conduct does not advance the purpose of our Company. It is also
morally wrong and may subject the Company to legal exposure. It is part of every
employee's responsibility to maintain a work place that is free of any form of
sexual harassment. Therefore, you are required to report all incidents of
harassment. Furthermore, supervisory favoritism of any kind toward any applicant
or employee as a result of sexual conduct is strictly forbidden. As a
supervisor, you must discuss this policy with the people who work for you and
advise them that they should not tolerate insulting, degrading or offensive
treatment.
Sexual Harassment consists of unwelcome sexual advances, requests for
sexual favors, and other verbal or physical conduct of a sexual nature when:
- - Submission to such conduct is made either explicitly or implicitly a term
or condition of an individual's employment or
- - Submission to or rejection of such conduct by an individual is used as a
basis for employment decisions affecting such individual; or
- - Such conduct has the purpose to effect or unreasonably interfere with an
individual's work performance or creating an intimidating, hostile or
offensive working environment.
Sexual Harassment takes many different forms, the following are examples
of prohibited conduct:
Verbal: Sexual innuendoes, degrading words, graphic or suggestive
comments about a person's dress or body, jokes of a sexual
nature, sexual propositions, threats, etc.
Non-Verbal: Display of pornographic or sexually suggestive objects or
pictures, suggestive or insulting sounds, leering, whistling,
obscene gestures.
Physichal: Unwanted physical contact, including touching, pinching,
brushing up against the body, coerced sexual intercourse,
assault or comments about such behavior.
E-8
Sexual harassment may be overt or subtle; verbal, non-verbal or physical.
Regardless of its nature, the Company will not tolerate sexual harassment.
If you believe that you were subjected to sexual harassment, you are
encouraged to follow these guidelines:
- - Report the harassment to your immediate supervisor or the department head
or the Human Resources Director. Management will investigate the complaint
thoroughly in a confidential manner, documenting all information provided.
Only those persons necessary for the investigation will be involved in the
process. If necessary, dependent upon the severity of the offense and the
outcome of Management's investigation the Company's legal counsel will be
called in to the investigation process.
- - Alternatively, you may report instances of harassment using the toll-free
number established by the Company for that purpose. (See "IMPLEMENTATION
OF THE CODE-Reporting of Violations," below.)
Employees will not be subject to any form of retaliation or discipline for
filing a sexual harassment complaint. If the Company determines that a complaint
is valid, it will take appropriate measures in response. Consequently, if you
engage in this type of prohibited conduct you will be subject to disciplinary
action, up to and including termination.
XII. COMMERCIAL TRANSACTIONS
You have an obligation to deal with the Company'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 which 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 the Company's approval process. Neither the Company 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.
XIII. HEALTH AND SAFETY LAWS
The Company is committed to providing its employees with a safe and
healthy work environment. You shall comply with all applicable occupational
health and safety laws and regulations.
XIV. ANTITRUST LAWS
The Company has consistently maintained a policy of strict compliance with
all aspects
E-9
of the anti-trust laws. U.S. anti-trust laws govern the Company's conduct and
transactions in dealing with competitors, customers and suppliers. Severe
criminal and civil penalties may be imposed on the Company and on its employees
if an employee authorizes or participates in a violation of the anti-trust laws.
Therefore, it is important to understand and strictly follow this policy so the
Company and its employees may avoid even the appearance of an anti-trust
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) You shall not enter into any understanding, agreement, plan, or
scheme which you have reason to believe or have been advised by
counsel for the Company is illegal under any of the antitrust laws.
(2) You shall not exchange or discuss with any competitor information
relating to Company prices or pricing policies, distribution
policies, supplier or customer selection or classifications, credit
policies, or any other similar competitive information.
(3) You shall not 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.
XV. ENVIRONMENTAL LAWS
It is the policy and practice of the Company to promote the protection of
people and the environment as a part of everything we do and every decision we
make. The Company'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 employees of the Company, and all of its
facilities and operations, shall comply with all applicable environmental laws,
rules, and regulations, including those dealing 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.
XVI. SECURITIES TRADING
The Company encourages investment in its publicly traded securities by
those associated with the Company. However, you shall not, regardless of your
position with the Company, purchase or sell, directly or indirectly through
third persons, the Company's securities on the basis of material information
known to you but not known to the public. If you possess material non-public
information concerning a corporation, it is illegal for you to trade in
securities of the
E-10
corporation. All directors, officers and employees of the Company, and third
parties who are in a confidential relationship with the Company, shall not trade
in or recommend the purchase or a sale of the Company's common shares (or any
other securities) while they are in possession of "material information"
regarding the operations or prospects of the Company that has not been publicly
disclosed and disseminated to the investment community, nor shall they trade in
or recommend the sale of such securities on the basis of rumors. In addition,
such persons shall not participate in discussions in Internet "chat rooms," post
messages on message boards or otherwise circulate rumors (whether or not true)
which could affect the price of the Company's common stock or other securities.
All directors, officers and employees of the Company, and third parties
who are in a confidential relationship with the Company shall also similarly
abstain from trading in, or recommending the purchase or sale of the securities
of any other corporation which they have obtained unpublicized "material
information" as a result of their employment by the Company.
"Material information" is information which, 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".
XVII. IMPLEMENTATION OF THE CODE
A. Human Resource Director
The Human Resource Director is responsible for implementation of the
Company's compliance program, including the Code.
B. 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
Questions may also be directed to the Human Resource Director, either in
person, in writing or by calling 516-338-8500 or the company's legal counsel,
Kramer, Coleman, Wactlar & Lieberman, P.C., 516-822-4820, Attention: Nancy D.
Lieberman.
E-11
C. 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;
- the Board of Directors; or
- by calling 1-888-883-1499 in the United States. This toll-free
number operates 24 hours per day, 7 days per week, 365 days per
year.
An employee may also report a violation or possible violation of the Code
directly to the Human Resource Director or the President. Any manager receiving
such a report must, when appropriate, immediately advise the Human Resource
Director or President. There shall be no reprisals for good faith reporting of
actual or possible violations of the Code.
D. Investigation of Violations
All reported violations of the Code will be promptly investigated by the
Company and will be treated confidentially to the extent consistent with the
Company's interests and as required by law. All investigations by the Company of
wrongdoing will be directed by the Human Resource Director. You are expected to
cooperate in the investigation of an alleged violation of the Code. If the
result of the investigation indicated that corrective action is required, the
Company will decide what steps it should take, including, when appropriate,
legal proceedings, to rectify the problem and avoid the likelihood of its
recurrence.
E. 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.
- Retaliation against an individual for reporting a violation of the
Code.
Disciplinary action may, when appropriate, include termination.
E-12
F. Waivers of the Code
The Company's Board of Directors shall review and approve:
- Any change or waiver of the Code for the Company's executive
officers or directors; and
- Any disclosure made on Form 8-K or on the Company's website
regarding such change or waiver.
G. Acknowledgment
The Company requires that all employees sign an acknowledgment confirming
that they have received and read the Code and understand it.
E-13
ACKNOWLEDGMENT FORM
RE: NATHAN'S FAMOUS, INC. CODE OF BUSINESS CONDUCT
I HAVE RECEIVED AND READ THE COMPANY'S CODE OF BUSINESS CONDUCT (THE
"CODE"). I UNDERSTAND THAT THE CODE REPRESENTS THE POLICIES OF NATHAN'S FAMOUS,
INC. I AGREE TO FOLLOW AND ADHERE TO THE CODE.
SIGNED: _________________________
NAME: _________________________
(PRINT OR TYPE)
EMPLOYEE NUMBER: _________________________
DATE: _________________________
E-14