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EXHIBIT 99.2
CUBIST PHARMACEUTICALS, INC
AMENDED AND RESTATED
CODE OF CONDUCT AND ETHICS
EFFECTIVE SEPTEMBER 15, 2003
INTRODUCTION
This Code of Conduct and Ethics (this "Code") covers a wide range of
business practices and procedures. It does not cover every issue that may arise,
but it sets out basic principles to guide all employees of Cubist
Pharmaceuticals, Inc. (the "Company"). All of our employees must conduct
themselves accordingly and seek to avoid even the appearance of improper
behavior. This Code should also be provided to and followed by the Company's
agents and representatives, including consultants.
If a law conflicts with a policy in this Code, you must comply with the
law; however, if a local custom or policy conflicts with this Code, you must
comply with the Code. If you have any questions about these conflicts, you
should seek advice from: (i) your Vice President, (ii) any director-level or
higher employee in Human Resources, (iii) any director-level or higher employee
in the Law Department.
If you wish to report a violation or suspected violation of this Code,
you can contact the Company's Corporate Responsibility Hotline, which is
781-860-8600. The head of Human Resources will promptly investigate such
reports.
If you wish to report ANONYMOUSLY a violation or suspected violation of
this Code, including, but not limited to, those: (i) relating to accounting,
internal accounting controls, or auditing matters or (ii) by one or more of the
Company's Executive Officers, you can contact the Company's CONFIDENTIAL
Corporate Responsibility Hotline, which is 617-241-1456. The Company's Internal
Auditors will promptly investigate all reports to the Confidential Corporate
Responsibility Hotline and, if after investigation, the Internal Auditors
determine that further action is necessary, they will report their findings to
the Audit Committee.
A GOOD BASIS FOR DECIDING WHEN TO GET ADVICE IS TO ASK WHETHER THE
CONDUCT MIGHT BE EMBARRASSING TO THE COMPANY OR THE EMPLOYEES INVOLVED IF THE
DETAILS WERE FULLY DISCLOSED TO THE PUBLIC BY THE MEDIA.
Those who violate the standards in this Code will be subject to
disciplinary action, up to and including termination.
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1. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
Obeying the law, both in letter and in spirit, is the foundation on
which this Company's ethical standards are built. All employees must respect and
obey the laws of the jurisdictions in which we operate. Although not all
employees are expected to know the details of these laws, it is important to
know enough to determine when to seek advice from: (i) your Vice President, (ii)
any director-level or higher employee in Human Resources, or (iii) any
director-level or higher employee in the Law Department.
The Company holds information and training sessions and has put in
place various policies and standard operating procedures in order to promote
compliance with laws, rules and regulations, including insider-trading laws.
Each department head is responsible for ensuring that his/her employees attend
all mandatory training sessions that are related to compliance with laws, rules
and regulations.
2. CONFLICTS OF INTEREST
All employees are expected to make decisions in the best interest of
the Company, and not for personal gain. Therefore, all employees are required to
avoid "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 situation
can arise when an employee, officer, or director takes actions or has interests
that may make it difficult to perform his or her Company work objectively and
effectively. Conflicts of interest may also arise when an employee, officer or
director, or members of his or her family, receives improper personal benefits
as a result of his or her position in the Company. Loans to, or guarantees of
obligations of, employees and their family members may create conflicts of
interest.
It is almost always a conflict of interest for a Company employee to
work simultaneously for a competitor, customer, or supplier. You are not allowed
to work for a competitor as a consultant or board member. The best policy is to
avoid any direct or indirect business connection with our customers, suppliers,
or competitors, except on our behalf.
Conflicts of interest are prohibited as a matter of Company policy,
except if approved by the Board of Directors on a case-by-case basis. Conflicts
of interest may not always be clear-cut, so if you have a question, you should
seek advice from: (i) your Vice President, (ii) any director-level or higher
employee in Human Resources, or (iii) any director-level or higher employee in
the Law Department. Any employee who becomes aware of a conflict or potential
conflict should bring it to the attention of: (i) his or her Vice President,
(ii) any director-level or higher employee in Human Resources, or (iii) any
director-level or higher employee in the Law Department.
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3. INSIDER TRADING
Employees who have access to confidential information are not permitted
to use or share that information for stock trading purposes or for any other
purpose except the conduct of our business. All non-public information about the
Company should be considered confidential information. To use non-public
information for personal financial benefit or to "tip" others who might make an
investment decision on the basis of this information is not only unethical but
also illegal. If you have any questions, please refer to your copy of the
Company's Amended and Restated Policy on Insider Trading and Confidentiality,
and then ask the Law Department.
4. CORPORATE OPPORTUNITIES
Employees, officers, and directors are prohibited from exploiting for
their personal advantage opportunities that are discovered through the use of
corporate property, information, or position without the consent of the Board of
Directors. No employee may use corporate property, information, or position for
improper personal gain, and no employee may compete with the Company directly or
indirectly. Employees, officers, and directors owe a duty to the Company to
advance its legitimate interests when the opportunity to do so arises.
5. COMPETITION AND FAIR DEALING
We seek to outperform our competition fairly and honestly. We seek
competitive advantages through superior performance, never through unethical or
illegal business practices. 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.
Each employee should endeavor to respect the rights of and deal fairly with the
Company's customers, suppliers, competitors, and employees. No employee should
take unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other
intentional unfair-dealing practice.
Drug development is highly competitive, and it is the policy of the
Company to compete aggressively, but fairly. A major part of this commitment to
compete fairly is a commitment to abide fully by the antitrust laws. In general,
these complex laws prohibit any form of agreement or understanding -- whether
formal, informal, express, or implied -- that unreasonably reduces competition
and business rivalry. Our commitment in this regard also prohibits any unfair or
untrue disparagement of a Company competitor.
Absent compelling circumstances, the company should select all vendors
and contractors on the basis of written competitive bids.
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. Gifts
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or entertainment should not ever be offered, given, provided or accepted by any
Company employee, family member of an employee or agent unless it: (1) is not a
cash gift, (2) is consistent with customary business practices, (3) is not
excessive in value, (4) cannot be construed as a bribe or payoff,(5) does not
violate any laws or regulations, and (6) is offered in compliance with
applicable SOPs. You can also refer to the "PhRMA Code" for additional guidance
(copies of which are available from the Law Department). Please seek advice
from: (i) your Vice President, (ii) any director-level or higher employee in
Human Resources, or (iii) any director-level or higher employee in the Law
Department, regarding any gifts or proposed gifts which you are not certain are
appropriate.
It is the policy of the Company to comply with health care "fraud and
abuse" laws. This includes Federal and State anti-kickback laws that prohibit
offering or giving kickbacks or other improper inducements to those who may be
in a position to purchase or prescribe (or to arrange for or recommend the
purchase or prescription of) our products. Any arrangements with healthcare
customers (including but not limited to the provision of gifts, grants, and
business courtesies) should be reviewed to ensure compliance with applicable
laws, Company policies, and SOPs, which are available from the Law Department.
6. DISCRIMINATION AND HARASSMENT
The diversity of the Company's employees is a tremendous asset. We are
firmly committed to providing equal opportunity in all aspects of employment and
will not tolerate any discrimination or harassment of any kind. Please refer to
Cubist's "Anti-Harassment Policy" and "Policy Against Sexual Harassment in the
Workplace" for additional information and guidance.
7. HEALTH AND SAFETY
The Company strives to provide each employee with a safe and healthful
work environment. Each employee has responsibility for maintaining a safe and
healthy workplace for all employees by following safety and health rules and
practices and reporting accidents, injuries and unsafe equipment, practices or
conditions.
The Company will not tolerate violence and threatening behavior.
Employees should report to work in condition to perform their duties, free from
the influence of illegal drugs or alcohol. The Company will not tolerate the use
of illegal drugs in the workplace or on the Company's property. Please see the
Company's Employee Handbook for further guidance.
8. RECORD-KEEPING
The Company follows the accepted accounting rules and controls set
forth by the U.S. Securities and Exchange Commission and the Financial
Accounting Standards Board. The Company requires honest and accurate recording
and reporting of information in all circumstances, and without exception. The
Company requires that its certified public
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accountants have access to any and all information necessary for them to conduct
audits properly.
Business expense accounts used by employees must be documented and
recorded accurately. If you are not sure whether a certain expense is
legitimate, ask your supervisor or the Controller. Rules and guidelines are
available from the Controller.
All of the Company's books, records, accounts and financial statements
must be maintained in reasonable detail, must appropriately reflect the
Company's transactions and must conform both to applicable legal requirements
and to the Company's system of internal controls. Unrecorded or "off the books"
funds or assets should not be maintained unless permitted by applicable law or
regulation and approved in writing by the Chief Financial Officer.
Business records and communications often become public, and we should
avoid exaggeration, derogatory remarks, guesswork, or inappropriate
characterizations of people and companies that could be misunderstood. This
applies equally to e-mail, internal memos, and formal reports. Records should
always be retained or destroyed according to the Company's record retention
policies. In accordance with those policies, in the event of litigation or
governmental investigation, threatened or known, please consult with a
director-level or higher employee in the Law Department.
9. CONFIDENTIALITY
Employees must maintain the confidentiality of confidential information
entrusted to them by the Company or its customers, except when disclosure is
authorized by a director-level or higher employee in the Law Department, 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 us. The obligation to preserve
confidential information continues even after employment ends.
10. PROTECTION AND PROPER USE OF COMPANY ASSETS
All employees should endeavor to protect the Company's assets and
ensure their efficient use. Theft, carelessness, and waste have a direct impact
on the Company's profitability. Any suspected incident of fraud or theft should
be immediately reported for investigation. Company equipment should not be used
for non-Company business, though incidental personal use may be permitted.
The obligation of employees 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
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unpublished financial data and reports. Unauthorized use or distribution of this
information would violate Company policy. It could also be illegal and result in
civil or even criminal penalties. Please see the Company's policies on IT usage
and confidentiality (copies of which are located in Cubist's Employee Handbook)
for further guidance.
11. PAYMENTS TO GOVERNMENT PERSONNEL
The U.S. Foreign Corrupt Practices Act prohibits giving anything of
value, directly or indirectly, to officials of foreign governments or foreign
political candidates in order to obtain or retain business. It is strictly
prohibited to make payments to government officials of any country.
In addition, the U.S. government has a number of laws and regulations
regarding business gratuities, which may be accepted by U.S. government
personnel, including, but not limited to, employees of Medicare, Medicaid, and
the Veterans Administration. The promise, offer or delivery to an official or
employee of the U.S. government of a gift, favor or other gratuity in violation
of these rules would not only violate Company policy but could also be a
criminal offense. State and local governments, as well as foreign governments,
may have similar rules.
The Company does not contribute, directly or indirectly, to any
political campaign or party. Employees may not use company expense accounts to
pay for any personal political contributions or seek any other form of company
reimbursement. In addition, employees should not use company facilities or
company assets for the benefit of any party or candidate, including an employee
individually running for office. Employees are not prohibited from contributing
to properly established political action committees.
12. MISREPRESENTATIONS AND FALSE STATEMENTS
Employees must never make a deliberate misrepresentation concerning the
Company or its business operations. No employee shall create, or assist another
in creating, a false or misleading entry on the Company's books.
13. RESPONDING TO GOVERNMENT REQUESTS
Employees are expected to respond truthfully to Governmental inquiries.
It is the Company's policy to cooperate with all reasonable requests from
Governmental agencies concerning the Company's business operations.
14. COMPLIANCE PROCEDURES
We must all work to ensure prompt and consistent action against
violations of this Code. However, in some situations it may be difficult to know
right from wrong. Since we
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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 fully informed as possible.
- ASK YOURSELF. WHAT SPECIFICALLY AM I BEING ASKED TO DO? DOES IT
SEEM UNETHICAL OR IMPROPER? This will enable you to focus on the
specific question you are faced with and the alternatives you
have. 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 YOUR SUPERVISOR. This is the basic
guidance for all situations. In many cases, your supervisor will
be more knowledgeable about the question and will appreciate
being brought into the decision-making process. Remember that it
is your supervisor's responsibility to help you solve problems.
- SEEK HELP FROM COMPANY RESOURCES. In the rare case where it may
not be appropriate to discuss an issue with your supervisor, or
where you do not feel comfortable approaching your supervisor
with your question, discuss it with any director-level or higher
employee of Human Resources, any director-level or higher
employee in the Law Department.
- YOU MAY REPORT VIOLATIONS IN CONFIDENCE AND WITHOUT FEAR OF
RETALIATION. You may report violations or suspected violations of
this Code by calling the Company's Corporate Responsibility
Hotline at 781-860-8600. All inquiries to the Corporate
Responsibility Hotline will be handled confidentially to the
extent reasonably possible. You may ANONYMOUSLY report violations
or suspected violations of this Code, including, but not limited
to, those: (i) relating to accounting, internal accounting
controls, or auditing matters or (ii) by one or more of the
Company's Executive Officers, by calling the Company's
CONFIDENTIAL Corporate Responsibility Hotline at 617-241-1456.
The Company does not permit retaliation of any kind against
employees for good faith reports of ethical violations.
- ALWAYS ASK FIRST, ACT LATER. If you are unsure of what to do in
any situation, seek guidance before you act.
15. HOW TO REPORT ANY ILLEGAL OR UNETHICAL BEHAVIOR
Employees are encouraged to seek advice from: (i) their respective Vice
President, (ii) any director-level or higher employee in Human Resources, or
(iii) any director-level or higher employee in the Law Department about observed
illegal or unethical behavior and, when in doubt, about the best course of
action in a particular situation.
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YOU SHOULD REVIEW SECTION 13 IF YOU BELIEVE YOU HAVE OBSERVED ILLEGAL
OR UNETHICAL BEHAVIOR AND PROMPTLY REPORT SUCH BEHAVIOR TO: (i) YOUR VICE
PRESIDENT, (ii) ANY DIRECTOR-LEVEL OR HIGHER EMPLOYEE IN HUMAN RESOURCES, OR
(iii) ANY DIRECTOR-LEVEL OR HIGHER EMPLOYEE IN THE LAW DEPARTMENT. YOU MAY ALSO
REPORT SUCH BEHAVIOR TO THE COMPANY'S CORPORATE RESPONSIBILITY HOTLINE AT
781-860-8600. IF YOU WISH TO REPORT SUCH BEHAVIOR ANONYMOUSLY, YOU CAN CALL THE
COMPANY'S CONFIDENTIAL CORPORATE RESPONSIBILITY HOTLINE AT 617-241-1456.
Employees are expected to cooperate in internal investigations of misconduct.
16. NO RETALIATION
The Company will not retaliate in any manner, including, but not
limited to, discharging, demoting, suspending, threatening, harassing, or
otherwise discriminating against an employee who reports in good faith
violations or suspected violations of this Code, including, but not limited to,
accounting fraud or securities law violations.
17. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS
Any waiver of this Code for employees may be made only by the Board of
Directors. Any waiver of this Code for executive officers or directors may be
made only by the Board of Directors and will be promptly disclosed as required
by law or Nasdaq regulation.
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