Exhibit 14.1
EXHIBIT B
The Execute Sports Code of Ethics
Purpose and Scope
This policy establishes our company's requirements regarding personal and
professional ethical and legal standards of conduct and the handling of
complaints of violations of those standards. It applies to all Execute Sports
employees, contractors and non-employee directors.
Policy
It is the policy of The Execute Sports Company to conduct its business in
accordance with applicable laws of the United States and other jurisdictions in
which the Company operates and in accordance with the highest ethical standards
of business conduct. All employees shall adhere strictly to this policy.
While it is the Company's explicit policy to comply with all relevant federal,
state and local statutes, our commitment to ethical conduct in the affairs of
our business goes far beyond the prohibitions of any particular statute. The
company's minimum requirements for the conduct of all employees follow.
Specific Obligations
General Business Ethics
All persons employed by, or associated with the Company are expected to deal
honestly, truthfully and fairly with others in business. False or intentionally
misleading statements or omissions of any kind should never be made.
Confidential information, either of Execute Sports or of any other company, must
never be misused. Execute Sports will not countenance any types of deceitful
practices.
Company Records and Money
Company records must always be maintained and presented accurately and reliably.
No false or intentionally misleading entries may be made in the Company's books
or records. Company money must be accurately accounted for and may only be spent
for lawful, company-related purposes. Employees whose duties involve
verification of expenditures of Company money are responsible for the scrutiny
and verification of the legitimacy of all expenditures.
Relationships with Vendors/Customers
All vendors and customers are to be treated honestly and fairly. No payments,
gifts of more than nominal value, or any form of preferential treatment may be
made to obtain or retain business, or to realize a certain price for Company
products. No payments, direct or indirect, including gifts of more than nominal
value or any form of preferential treatment, may be solicited or accepted from
any vendor, customer or competitor of the Company.
Money, gifts, repetitive or extensive entertainment and other favors which would
imply or incur an obligation must not be accepted or given by employees or
immediate members of their family in connection with transactions involving the
Company. Acceptance of a meal, refreshments or entertainment in the normal
course of business relations is permitted and, to the extent practical, should
be reciprocated.
The Company will promptly terminate any employee who offers or receives a bribe
or a kickback. Such conduct is illegal and strictly forbidden.
Conflicts of Interest
All decisions involving the business or non-business activities of the Company
must be made solely in the best interests of the Company. Employees, and
directors who are not employees, must not make decisions based on personal
considerations which might affect or appear to affect their judgment.
Accordingly, they must not have, or appear to have, any direct or indirect
personal interest, financial or otherwise, in any of the Company's competitors,
suppliers or customers. They may not buy or sell, directly or indirectly, any
property, goods or services from or to the Company for their own benefit or for
the benefit of their families or associates. Employees must not accept from
others, directly or indirectly, any form of compensation for work or services
relating to their responsibilities as Execute Sports employees. The ownership,
as an investor, of the securities of publicly held corporations may normally be
disregarded.
Any employee with a question about whether a particular situation constitutes a
conflict of interest should discuss it with his or her supervisor.
Inside Information
Important information that has not yet become publicly available about either
Execute Sports or publicly traded companies with which Execute Sports has
business dealings is "Inside Information." Execute Sports personnel who have
access to Inside Information may not profit financially by buying or selling or
in any other way dealing in Execute Sports stock or the stock of another
publicly traded company about which the person has Inside Information. Nor may
Execute Sports personnel benefit financially or in any other way by passing on
Inside Information to any other person. The use of Inside Information in order
to gain personal benefit is illegal regardless of how small the user's profit
from the transaction may be.
An easy way to determine whether information not yet publicly available is
Inside Information is to ask whether the dissemination of the information would
be likely to affect the market price of the stock of the company in question or
whether it would be likely to be considered as important information by
investors who are considering purchasing or selling that company's stock. If the
information makes you want to buy or sell, it is likely to have the same effect
on others.
If you possess Inside Information, you must refrain from trading the stock of
the company concerned, from advising anyone else to do so or from communicating
the Inside Information to anyone else until you know that it has been
disseminated to the public.
Company Trade Secrets
Proprietary information includes data developed or assembled on Company time or
at Company expense, that is unique in the sense that the end result is not
readily available generally without a like expenditure of time and money, even
though the basic data is known or observable. Trade secrets include all data
unique to the Company and discoverable only by employees in certain positions in
the Company. Information in these categories is the property of Execute Sports
Incorporated, and any misapplication or misappropriation of that property may
prompt legal action by the Company.
No one should share proprietary information or trade secrets of Execute Sports
with anyone outside the Company, or anyone within the Company not authorized to
receive that information. Nor should anyone solicit or accept from anyone
outside the Company any proprietary information or trade secrets of another
company. The Company has no interest either in receiving or using any
proprietary information or trade secrets of other companies, because to do so
would be unethical and improper.
Further, no one should make any use of materials protected by copyrights,
trademarks, or patents without first bringing the matter to the attention of the
Legal Services Department.
Antitrust
Execute Sports has always been, and remains, an ardent supporter of free and
fair competition. Execute Sports forbids any conduct that would unfairly and
unlawfully diminish competition in the marketplace. The antitrust laws protect
and promote free and fair competition among businesses. Examples of the types of
conduct which are prohibited under the antitrust laws, and are therefore
particularly unacceptable to Execute Sports include but are not limited to:
- Any agreements among competitors about price, allocation of markets,
or allocation of customers.
- Any agreements with customers not to deal with a competitor.
- Restrictions on resale.
- Sales conditioned on agreements to purchase other products.
Environmental, Health and Safety Laws and Regulations
Environmental, Health and Safety laws and regulations are very complex and
extremely important. Compliance with these regulations is essential. In
addition, it is essential that any reports or representations made by or on
behalf of the Company to any environmental, health or safety regulatory body be
completely accurate and correct, containing no false statements or material
omissions.
Political Contributions
Execute Sports complies carefully with all regulations governing campaign
contributions in federal, state and local elections. In addition, employees are
free to make, or not to make, any individual political contributions they
desire. The Company shall never reimburse an employee for a political
contribution made by the employee.
International Practices
In some countries, practices which the United States would characterize as
criminal or corrupt are accepted or tolerated as part of the political and
commercial culture. In particular, some countries do not condemn bribery the way
the United States does, and permit, or tolerate, payments to public officials to
influence their exercise of discretion. Not only are such practices contrary to
Execute Sports' standards, they are illegal in the United States, even when
committed abroad. Execute Sports forbids the offering or receiving of any money
or anything of value to or from a foreign official to influence that person in
the performance of official functions.
International Boycotts
Governments sometimes seek to advance their own political agendas by pressuring
companies with whom they do business to boycott the companies or products of
certain other countries. It is unlawful for any United States citizen or company
to comply with, further or support a boycott against a country which is not
itself the object of any form of boycott pursuant to United States law or
regulation. Execute Sports refuses to participate in furthering any form of
illegal boycott.
Sexual Harassment
Execute Sports Incorporated prohibits the sexual harassment of individuals in
the workplace. Sexually harassing behavior which occurs off Execute Sports
premises is also prohibited. Furthermore, the Company will not tolerate
retaliation against anyone who rejects sexual advances, makes a report of
harassment or provides information or assistance in the investigation of such a
report.
Interference with an Audit
It is unlawful to attempt improperly to persuade an outside auditor to approve
false financial statements. Execute Sports prohibits its officers and directors,
and anyone acting under their direction, from coercing, manipulating, misleading
or fraudulently influencing the Company's outside auditor to approve materially
misleading financial statements.
Reporting Procedures
Any employee who becomes aware of any illegal activities or any violation of the
policies contained in this policy is required immediately to report the conduct.
This reporting is not only encouraged by the Company, it is required. The
Company pledges that it will not retaliate against employees who make such
reports and shall not tolerate retaliation by any other person against an
employee who makes such a report.
Employees may report a policy violation to supervisory personnel, directly to
the General Counsel. Supervisory personnel are required to communicate reported
violations of law or Company Policy to the General Counsel. Contact information
for the General Counsel is as follows:
City National Bank Building
4275 Executive Square
Suite 215
La Jolla, CA 92037
(858) 362-1440
A full and accurate report made to the General Counsel constitutes compliance
with the reporting requirement.
Complaint Investigation Procedures
When the General Counsel receives a complaint of a violation of this policy
directly or he/she will, with the help of the President -- Internal Audit,
evaluate the complaint. Complaints alleging questionable accounting, internal
accounting controls and auditing matters will be submitted to the Board of
Directors. The Board of Directors may request the General Counsel to conduct an
investigation, or may, in its discretion, retain its own advisors to evaluate
and/or to investigate the complaint. Complaints alleging serious misconduct by
senior management will be referred to the full Board of Directors for evaluation
and investigation as appropriate. All other complaints will be investigated by
the General Counsel, as appropriate, and a summary of the complaints and
management follow-up will be reported to the Board of Directors periodically.
Disciplinary Sanctions
Employees who violate the policies set forth in this policy will be subject to
discipline. Disciplinary measures will vary, depending on the seriousness of the
violation and the individual circumstances of the employee. Available
disciplinary sanctions include suspension, termination and referral to public
law enforcement authorities for possible prosecution.
Administration
General
Managers are responsible for ensuring that their exempt employees have read the
Company's Code of Ethics and related Policies. Human Resources is responsible
for providing copies of the Policies in the new employee package for all
salaried exempt new hires.
Questionnaire and Disclosure
During the first quarter of each calendar year, the General Counsel will send to
certain employees questionnaires to ascertain compliance with this Policy. These
employees will be identified by the responsible senior officers upon request by
the General Counsel.
Employees are expected to respond fully and candidly to the questionnaire. To
ensure confidentiality and consistency in handling, questionnaires will be
reviewed by only the General Counsel and by the Chief Executive Officer.
If any event or set of circumstances occurs or appears likely to occur that
might create a conflict not previously disclosed or to deviate from the
standards described herein, the employee is expected to make the relevant facts
known to the Company and to follow its recommendations. Employees are encouraged
to discuss such matters first with their supervisors, but they may consult
either of the officers mentioned above.
Special Responsibilities of the CEO and Senior Financial Officers
The Chief Executive Officer and all senior financial officers, including the
Chief Financial Officer, Controller and Treasurer, are bound by the provisions
set forth above relating to ethical conduct, conflicts of interest and
compliance with law. In addition, the Chief Executive Officer and senior
financial officers are subject to the following specific policies:
The Chief Executive Officer and all senior financial officers are responsible
for full, fair, accurate, timely and understandable disclosure in the periodic
reports required to be filed by the Company with the Securities and Exchange
Commission, and in all other public communications made by the Company.
Accordingly, it is the responsibility of the Chief Executive Officer and each
senior financial officer promptly to bring or cause to be brought to the
attention of the Disclosure Committee any material information of which he or
she may become aware that affects the disclosures made by the Company in its
public filings and other public communications or otherwise assist the
Disclosure Committee in fulfilling its responsibilities as specified in the
Committee's charter.
The Chief Executive Officer and each senior financial officer shall promptly
bring or cause to be brought to the attention of the General Counsel and to the
Board of Directors any information he or she may have concerning any violation
of this policy, including any actual or apparent conflicts of interest between
personal and professional relationships, involving any management or other
employees who have a significant role in the Company's financial reporting,
disclosures or internal controls.
The Chief Executive Officer and each senior financial officer shall promptly
bring or cause to be brought to the attention of the General Counsel and to the
Board of Directors any information he or she may have concerning evidence of a
material violation of the securities or other laws, rules or regulations
applicable to the Company and the operation if its business, by the Company or
any agent thereof, or of violation of this policy.
The Board of Directors shall determine, or designate appropriate persons to
determine, appropriate actions to be taken in the event of violations of this
policy by the Chief Executive Officer and the Company's senior financial
officers. Such actions shall be reasonably designed to deter wrongdoing and to
promote accountability for adherence to this policy and may include written
notices to the individual involved that the Board has determined that there has
been a violation, censure by the Board, demotion or re-assignment of the
individual involved, suspension with or without pay or benefits (as determined
by the Board), termination of the individual's employment and referral to public
law enforcement authorities for possible prosecution. In determining what action
is appropriate in a particular case, the Board of Directors or such designee
shall take into account all relevant information, including the nature and
severity of the violation, whether the violation was a single occurrence or
repeated occurrences, whether the violation appears to have been intentional or
inadvertent, whether the individual in question had been advised prior to the
violation as to the proper course of action and whether or not the individual in
question had committed other violations in the past.
If you have questions about this policy, contact the office of General Counsel,
(858) 362-1440. This online policy supersedes all other versions of the policy.