CSS INDUSTRIES, INC.

POLICY

SUBJECT:     CODE OF ETHICS AND INTERNAL DISCLOSURE PROCEDURES

  1. Background

The reputation and integrity of CSS Industries, Inc., its subsidiaries and its affiliates ("CSS") are valuable assets that are vital to CSS' success.  Each employee of CSS, including each of CSS' officers, is responsible for conducting CSS' business in a manner that demonstrates a commitment to the highest standards of integrity.  This Code of Ethics has been adopted to help employees meet these standards.  Specifically, the purpose of this Code is (a) to foster among employees a culture of honesty and accountability, (b) to provide guidance to help employees to recognize and deal with ethical issues and (c) to provide mechanisms for employees to report unethical conduct.  While this Code is designed to provide helpful guidelines, it is not intended to address every specific situation.  Therefore, dishonest conduct, conduct constituting moral turpitude or conduct that is illegal will constitute a violation of this Code, regardless of whether such conduct is specifically referenced in this Code.  This Policy supercedes our November 10, 1986 Policy relating to Conflicts of Interest and a Code of Business Ethics.

  1. Overview

It is the policy of CSS:  (a) to comply with all applicable governmental laws, rules and regulations; (b) to expect that all of its employees at all times observe honest and ethical conduct in the performance of their CSS related responsibilities, including the avoidance of conflicts of interest; and (c) to encourage and support internal disclosure of any violation of this policy for appropriate action. 

The Code of Conduct governs the business-related conduct of all CSS employees, including, but not limited to the chief executive officer, chief financial officer and all other officers of CSS Industries, Inc.

  1. Compliance With Law

A variety of laws apply to CSS and its operations.  Each CSS employee is expected to comply with all such laws, including securities, banking and antitrust laws, as well as rules and regulations adopted under such laws.  Examples of criminal violations under these laws include: 

CSS must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report, as appropriate, non-criminal violations.

  1. Conflicts of Interest

A conflict of interest can occur or appear to occur in a wide variety of situations.  Generally speaking, a conflict of interest occurs when an employee's or an employee's immediate family's personal interest interferes with, or has the potential to interfere with, the interests or business of CSS.  For example, a conflict of interest may occur where an employee or a family member receives a gift, a unique advantage, or an improper personal benefit as a result of the employee's position at CSS.  A conflict of interest could make it difficult for an employee to perform corporate duties objectively and effectively because he or she is involved in a competing interest.  The following is a discussion of certain common areas that raise conflict of interest issues.  However, because a conflict of interest can occur in a variety of situations, CSS employees must be alert to recognize any situation that may raise conflict of interest issues.    

  1. Fair Dealing

Each employee should deal fairly and in good faith with CSS' customers, suppliers, regulators, business partners and others.  No employee may take unfair advantage of anyone through  misrepresentation, inappropriate threats, fraud, abuse of confidential information or other related conduct. 

  1. Proper Use of CSS Assets

CSS assets, including information, materials, supplies, time, intellectual property, facilities, software, and other assets owned or leased by CSS, or that are otherwise in CSS' possession, may be used only for legitimate business purposes.  The personal use of CSS assets without CSS approval is prohibited. 

  1. Delegation of Authority

Each employee, and particularly each of CSS' officers, must exercise due care to ensure that any delegation of authority is reasonable and appropriate in scope, and includes appropriate and continuous monitoring. 

  1. Handling Confidential Information

Employees should observe the confidentiality of information that they acquire by virtue of their employment by CSS, including information concerning customers, suppliers, competitors and other employees, except where disclosure is approved by CSS or otherwise legally mandated.  Of special sensitivity is financial information, which should under all circumstances be considered confidential except where its disclosure is approved by CSS, or when it has been publicly

available in a press release or a report filed with the Securities and Exchange Commission, in each case for at least forty-eight hours.  The provisions of the CSS policy relating to Confidential and Proprietary Information which have been incorporated by reference into this Policy are specifically applicable to this provision of the Policy.

  1. Special Guidelines for Chief Executive Officer and Senior Financial Employees

Federal law requires CSS Industries, Inc. to disclose whether it has adopted a "code of ethics" that is applicable to CSS Industries, Inc.'s Chief Executive Officer, Chief Financial Officer, controller or principal accounting officer, and any person who performs a similar function (the "Covered Officer"), and that codifies specified standards.  The requirements in this section are designed to encompass the standards to be codified under such a specific "code of ethics."  Accordingly, each Covered Officer shall:

It is important to note that Federal law requires that any waiver of, or amendment to the requirements in this Section IX will be subject to public disclosure.

  1. Internal Disclosure Procedures

General Policy - The Board of Directors of CSS Industries, Inc. is ultimately responsible for the implementation of this Code of Ethics and Internal Disclosure Procedures.  Those portions of the Internal Disclosure Procedures relating to the receipt, retention and treatment of complaints received by CSS regarding accounting, internal audit controls or auditing matters and for the confidential anonymous submission by CSS employees regarding alleged questionable accounting or auditing matters have been established by the Audit Committee of the Board of Directors of CSS Industries, Inc., and together with the remainder of this Policy have been approved by the Board of Directors.

As part of its commitment to ethical and legal conduct, CSS expects its employees to bring to the attention of either the CSS Industries, Inc.'s Legal Department or its Internal Audit Department information about suspected violations of the Code of Ethics or about questionable accounting or auditing matters.  An anonymous complaint may be submitted.  Employees are expected to come forward with any such information without regard to the identity or position of the suspected offender.  Subject to any disclosure obligations required by law, CSS will endeavor to treat the information received in a confidential manner consistent with appropriate evaluation and investigation and CSS will seek to assure that no act of retribution or retaliation will be taken against anyone for making any such complaint.

Complaint Procedure

Notification of Complaint - Information about known or suspected violations by any employee or agent of CSS should be reported promptly to either the Legal Department or the Internal Audit Department of CSS Industries, Inc. at 1845 Walnut Street, Suite 800, Philadelphia, PA 19103 (telephone number (215) 569-9900 or facsimile number at (215) 567-9979).  Whenever practical, the complaint should be made in writing.

Investigation - Reports of violations will be investigated under the supervision of the CSS Industries, Inc. Legal Department unless the alleged violation relates to a member of the CSS Industries, Inc. Legal Department.  If the alleged violation relates to a member of the CSS Industries, Inc. Legal Department, it will be investigated under the supervision of the Internal Audit Department.  CSS employees are expected to cooperate in the investigation of reported violations.  The results of investigation of all reported violations relating to accounting, internal audit controls or auditing matters will also be reported by the CSS Industries, Inc. Legal Department or Internal Audit Department, as the case may be, to the Audit Committee of the Board of Directors.

Confidentiality - Except as may be required by law or the requirements of the resulting investigation, the CSS Industries, Inc.'s Legal Department and Internal Audit Department shall not disclose the identity of anyone who reports a suspected violation if anonymity is requested; however, employees should be aware that the members of the CSS Industries, Inc. Legal Department and Internal Audit Department are obligated to act in the best interests of CSS and do not act as personal representatives or lawyers for employees.

Protection Against Retaliation - Retaliation in any form against an individual who reports an alleged violation of this Policy, even if the report is mistaken, may itself be a violation of law and is a serious violation of this Policy.  Any alleged act of retaliation should be reported immediately to the CSS Industries, Inc. Legal Department unless the alleged act of violation is attributed to a member of CSS Industries, Inc. Legal Department.  In such event, the alleged act of retaliation should be reported immediately to the Internal Audit Department.  If determined to have in fact occurred, any act of retaliation will result in appropriate disciplinary action including termination of employment.

Compliance with this Policy

  1. Waivers

Requests for CSS' approval of a waiver of a provision of the Code of Ethics portion of this Policy must be submitted in writing to the CSS Industries, Inc. Legal Department for appropriate review.  The Chief Executive Officer of CSS Industries, Inc. will determine whether a waiver should be granted, except that in the case of conduct involving an executive officer of CSS Industries, Inc. only the Audit Committee of the Board of Directors of CSS Industries, Inc. has the authority to grant such a waiver.  In the event of an approved waiver involving the conduct of an executive officer of CSS Industries, Inc. appropriate disclosure must be made to the stockholders to the extent then required by the Securities and Exchange Commission or other regulation or by New York Stock Exchange listing standards.

Statements in this Policy to the effect that certain actions may be taken only with "CSS' approval" will be interpreted to mean that the Chief Executive Officer of CSS Industries, Inc. or the Audit Committee of the Board of Directors of CSS Industries, Inc., as the case may be, must give prior written approval before the proposed action may be undertaken.

 


[1] Although the right of individual participation in the political process is recognized by CSS, the exercise of such right is only permissible while not on CSS' property, during non-business hours and without utilization of any CSS property or services.   

[2] Employees may have a passive investment in up to five percent of the equity securities of an other entity that is publicly traded. 

[3] Acceptance of a gift in the nature of a memento, e.g., a conference gift or other inconsequential gift valued at less than fifty dollars ($50), is permitted.  However, this dollar limit is only a guide, and an employee should consult with his or her Human Resources Department before accepting any gift of more than nominal value.  Engaging in normal occasional business related entertainment, such as meals or use of sporting, theatrical or other public event tickets is permissible with the understanding that it is expected the CSS employee will exercise sound judgment in reliance on this exception so as to avoid any situation that may otherwise be subject to question.