CODE OF BUSINESS CONDUCT AND ETHICS

 

INTRODUCTION

 

PURPOSE

 

            This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics.   We adhere to the higher standards of this Code, Employee handbook, commercial practice or applicable laws, rules or regulations. 

 

            This Code applies to all of our directors, officers and employees.  We refer to all persons covered by this Code as “Company employees” or simply “employees.”  We also refer to our Chief Executive Officer, our Chief Financial Officer, and our Controller as our “principal financial officers.”

 

SUMMARY OF THE CODE

 

As described in more detail below, this code requires all employees to  (i) comply at all times with all laws, rules and regulations applicable to the company or it’s operations,  (ii) contribute to maintaining accurate and complete financial and other business records, (iii) contribute to proper public disclosure regarding the company’s business, financial conditions and results of operations, (iv) avoid and/or disclose conflicts of interest in the conduct of the company’s business. 

 

SEEKING HELP AND INFORMATION

 

This Code is not intended to be a comprehensive rulebook and cannot address every situation that you may face.  If you feel uncomfortable about a situation or have any doubts about whether it is consistent with the Company’s ethical standards, seek help.  We encourage you to contact your supervisor for help first.  If your supervisor cannot answer your question or if you do not feel comfortable contacting your supervisor, contact the Human Resource Department.  The Company has also established an “I Care” hotline (888) 534-8708 X4830 or email to Loss Prevention at hottip@charlotte-russe.com or to the Audit Committee at auditcomm@charlotte-russe.com.  You may remain anonymous and will not be required to reveal your identity in calls to the “I care” hotline, although providing your identity may assist the Company in addressing your questions or concerns.

 

 

REPORTING VIOLATIONS OF THE CODE

           

            All employees have a duty to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company.  If you know of or suspect a violation of this Code, including violations regarding questionable accounting or auditing matters, immediately report the conduct to your supervisor.  Your supervisor will contact the appropriate level of management, which will work with you and your supervisor to investigate your concern.  If you do not feel comfortable reporting the conduct to your supervisor or you do not get a satisfactory response, you may contact the Human Resource Department directly.  You may also report known or suspected violations of the Code on the  I Care” hotline (888) 534-8708 X4830 or email to Loss Prevention at hottip@charlotte-russe.com or to the Audit Committee at auditcomm@charlotte-russe.com.  You may remain anonymous and will not be required to reveal your identity in calls to the hotline, although providing your identity may assist the Company in investigating your concern.  All reports of known or suspected violations of the law or this Code will be handled sensitively and with discretion. Your supervisor, the Human Resource Department and the Company will protect your confidentiality to the extent possible, consistent with law and the Company’s need to investigate your concern.

 

            It is Company policy that any employee who violates this Code will be subject to appropriate discipline, which may include termination of employment.  This determination will be based upon the facts and circumstances of each particular situation.  Failure to report known or suspected wrongdoing of which any member of the Company has knowledge may, by itself, subject that person to disciplinary action.  Disciplinary action may also apply to an employee’s supervisor who directs or approves the employee’s improper actions or is aware of those actions, but does not act appropriately to correct them or fails to exercise appropriate supervision.  An employee accused of violating this Code will be given an opportunity to present his or her version of the events at issue prior to any determination of appropriate discipline.  Employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms.  The Company may also face substantial fines and penalties and many incur damage to its reputation and standing in the community.  Your conduct as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both you and the Company.

 

POLICY AGAINST RETALIATION

 

            The Company prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations.  Any reprisal or retaliation against an employee because the employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.

 

 

 

 

WAIVERS OF THE CODE

           

            Waivers of this Code for employees may be made only by an executive officer of the Company.  Any waiver of this Code for our directors, executive officers or other principal financial officers may be made only by our Board of Directors and will be disclosed to the public as required by law or the rules of the NASDAQ National Market. 

 

COMPLIANCE WITH LAWS AND REGULATIONS

           

            Each employee has an obligation to comply with all laws, rules and regulations applicable to the Company operations.  These include, without limitation, laws covering bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets.  You are expected to understand and comply with all laws, rules and regulations that apply to your job position.  If any doubt exists about whether a course of action is lawful, you should seek advice from your supervisor or the Human Resource Department.

 

COMPANY RECORDS

 

            Accurate and reliable records are crucial to our business.  Our records are the basis of our earnings statements, financial reports and other disclosures to the public and guide our business decision-making and strategic planning.  Company records include booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.

 

            All Company records must be complete, accurate and reliable in all material respects.  Undisclosed or unrecorded funds, payments or receipts are inconsistent with our business practices and are prohibited.

 

ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS

 

            As a public company, we are subject to various securities laws, regulations and reporting obligations.  Both federal law and our policies require full, fair, accurate, timely and understandable disclosure regarding the Company’s business, financial condition and results of operations.  Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company and result in legal liability.   

 

            The Company’s principal financial officers and other employees working in the Accounting Department have a special responsibility to ensure that all of our financial disclosures are full, fair, accurate, timely and understandable.  These employees must understand and strictly comply with generally accepted accounting principles and all standards, laws and regulations for accounting and financial reporting of transactions, estimates and forecasts.

 

CONFLICTS OF INTEREST

 

IDENTIFYING POTENTIAL CONFLICTS OF INTERESTS

 

            A conflict of interest can occur when an employee’s private interest interferes, or reasonably appears to interfere, with the interests of the Company as a whole.  You should avoid any private interest that influences your ability to act in the interests of the Company or that makes it difficult to perform your work objectively and effectively. 

 

            Identifying potential conflicts of interest may not always be clear-cut.  The following situations are examples of conflicts of interest:

 

·         Outside Employment.  No employee should be employed by, serve as a director of, or provide any services to an outside company that is in conflict with the interest of the Company or where such conduct would disrupt the Company’s operations. 

 

·         Improper Personal Benefits.  No employee should obtain any material (as to him or her) personal benefits or favors because of his or her position with the Company. 

 

·         Financial Interests.  Except as approved by the Audit Committee no employee should have a significant financial interest (ownership or otherwise) in any company that is a customer, supplier or competitor of the Company.  A “significant financial interest” means (i) ownership of greater than 1% of the equity of a customer, supplier or competitor or (ii) an investment in a customer, supplier or competitor that represents more than 5% of the total assets of the employee. 

 

·         Loans or Other Financial Transactions.  No employee should obtain loans or guarantees of personal obligations from, or enter into any other personal financial transaction with, any company that is a customer, supplier or competitor of the Company.  This guideline does not prohibit arms-length transactions with banks, brokerage firms or other financial institutions.

 

·         Service on Boards and Committees.  Except as approved by the Audit Committee no employee should serve on a board of directors or trustees or on a committee of any entity (whether profit or not-for-profit) whose interests reasonably would be expected to conflict with those of the Company. 

 

·         Actions of Family Members.  Except as approved by the Audit Committee the actions of family members outside the workplace may also give rise to the conflicts of interest described above because they may influence an employee’s objectivity in making decisions on behalf of the Company.  For purposes of this Code, “family members” include your spouse or life-partner, brothers, sisters and parents, in-laws and children whether such relationships are by blood or adoption.

 

DISCLOSURE OF CONFLICTS OF INTEREST

 

The Company requires that employees disclose any situations that reasonably would be expected to give rise to a conflict of interest.  If you suspect that you have a conflict of interest, or something that others could reasonably perceive as a conflict of interest, you must report it to your supervisor or the Human Resource Department.  Your supervisor and the Human Resource Department will work with you to determine whether you have a conflict of interest and, if so, how best to address it.  Although conflicts of interest are not automatically prohibited, they are not desirable and may only be waived as described in “Waivers of the Code” above.

 

 

CONCLUSION

 

            This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics.  If you have any questions about these guidelines, please contact your supervisor or the Human Resource Department or the “I Care” hotline (888) 534-8708 X4830 or email to Loss Prevention at hottip@charlotte-russe.com or to the Audit Committee at auditcomm@charlotte-russe.com.  We expect all Company employees, to adhere to these standards. 

 

            This Code and the matters contained herein are neither a contract of employment nor a guarantee of continuing Company policy.  We reserve the right to amend, supplement or discontinue this Code and the matters addressed herein, without prior notice, at any time.

 

 

 

Audit Committee approval  - 4.8.04

Board of Directors approval  - 4.14.04