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Code of Ethics
CODE OF ETHICS AND BUSINESS CONDUCT
WAIVERS FROM THE CODE OF ETHICS AND
BUSINESS CONDUCT
CODE OF ETHICS AND BUSINESS CONDUCT
GENERAL
Tapestry Pharmaceuticals, Inc. and its affiliates (the "Company") always has sought to conduct
its business in accordance with the spirit, as well as the letter, of the law. The Company believes
in and adheres to the highest standards of ethical conduct. Employees are expected to perform
their duties on behalf of the Company anywhere in the world in accordance with the law and the
highest ethical standards. Consistent with this responsibility, each employee owes the Company
undivided loyalty and should avoid any direct or indirect interest, investment or association
which is or might be detrimental to the Company's interest. Every employee, officer and director
should read and understand the Code and its application to the performance of his or her business
responsibilities.
PURPOSE
This Code of Conduct is established to set forth the standards which are to govern employees in
the performance of their duties on behalf of the Company and in their involvement in outside
business activities.
SCOPE
This Code of Conduct applies to all employees of the Company. No employee shall undertake
indirectly any conduct prohibited by this Code of Conduct. References in the Code to employees
are intended to cover officers and, as applicable, all members (including non-employee
members) of our Board of Directors, i.e. “directors”.
POLICY
1. Compliance with Laws and Standards of Conduct
It is the policy of the Company to comply with the laws that apply to its business everywhere it
operates. Each employee, in dealing with contractors, carriers, suppliers, consultants, customers,
fellow workers and other persons doing business with the Company, or in representing the
Company before any governmental body, shall conduct his or her activities in accordance with
the law and in accordance with the highest ethical standards.
It is a primary responsibility of the Chief Executive Officer and other senior officers of the
Company to set the standard for business ethics through the adoption of appropriate policy and
the personal example set by each of them. Each employee, however, is ultimately responsible for
his or her own actions. By accepting employment with the Company, each employee signifies his
or her acceptance of the obligation to ensure that the Company's standards of conduct are
observed.
Violation of this Code of Conduct may in certain circumstances subject the Company and the
individual involved to criminal or civil liability. Whenever the legality or propriety of any
proposed action is subject to question, the employee involved should obtain advice from his or
her supervisor or the Chief Executive Officer.
2. Receipt of Loans, Gifts, Entertainment, Travel and Services
Under no circumstances shall any employee or any member of his or her immediate family
accept payments of money from any supplier, customer or other person doing business with the
Company or entertainment, special considerations, discounts or gifts of materials, equipment,
services, facilities or anything else of value unless (i) they are in each instance in the nature of
customary courtesies usually associated with accepted business practice, (ii) they do not
improperly interfere with the employee's independent judgment in the performance of his or her
employment and (iii) their public disclosure would not embarrass either the Company or the
employee.
3. Improper Payments
No employee shall authorize, make or participate in a payment of money or a gift of Company
property, services or facilities or anything else of value to (i) any domestic or foreign
governmental agency or official, (ii) any non-governmental customer or prospective customer or
(iii) employees, agents or associates of such persons for the purpose of promoting or retaining
business for the Company or inducing the recipient to grant favorable treatment to, or forego any
claim against, the Company.
United States law prohibits the giving of gifts or making of payments to foreign officials,
candidates or political parties for the purpose of influencing any act or decision. This prohibition
extends to payments or gifts made to any person if you have reason to believe that such person
will offer, give or promise any part of the payment or gift to any foreign official, candidate or
party. All such payments and gifts are prohibited by this Code of Conduct unless approved in
writing by the Chief Executive Officer.
This Code of Conduct specifically prohibits the payment of any fee or commission to distributors
or agents marketing the Company's products where a portion of such payment is passed on to a
governmental agency or a customer, or to officials, employees or agents of either. Gifts,
gratuities and entertainment may be given by employees, however, if, in addition to being
otherwise in accordance with this Code of Conduct, they are of such limited value and are in
such form that they cannot be characterized as being made for the purpose of improperly
obtaining or retaining business and public disclosure of the facts surrounding them would not
embarrass the Company.
4. Maintenance of Proper Records
All assets and liabilities and items of revenue and expense of the Company shall be recorded in
its regularly maintained accounting records. No undisclosed or unrecorded fund or asset of the
Company shall be established for any purpose. Accounting records of the Company must
accurately reflect, and be a fair representation of, the transactions they record in accordance with
generally accepted accounting principles and policies of the Company and in a manner which
will reflect the nature and purpose and amounts thereof. No false or artificial entry shall be made
in the records of the Company for any reason, and no false statement, written or oral, shall be
made in connection with an audit or other examination of the Company's books or any filing
with any governmental authority. All payments (other than payments covered by normal petty
cash procedures) on behalf of the Company of any amounts required by law or contract to be
made shall be made only by check drawn against a regularly constituted account of the Company
or other commercially acceptable means for transfer of funds which is supported by written
evidence. Any employee having information or knowledge regarding any violation of this Code
of Conduct shall promptly report such matter to the Chief Executive Officer.
5. Political Contributions
Neither the Company nor any employee shall make any contribution of Company funds,
materials, equipment, facilities, or services or anything else of value to any foreign or domestic
candidate for public office or any political party or committee unless (i) the Chief Executive
Officer determines that the making of such contribution is legal in the jurisdiction in which it is
proposed to be made and (ii) each such contribution is specifically authorized by the Board of
Directors of the Company and is reflected in the minutes of the meeting at which such action was
taken. Employees are free to participate in lawful political activities and to make personal
contributions to political parties, committees or candidates of their choice.
6. Conflict of Interest
No employee shall, directly or indirectly, engage in, or have any interest, financial or otherwise,
in any other business enterprise which interferes or is likely to interfere with the employee's
independent exercise of judgment in the Company's best interest. Generally, a conflict of interest
exists when an employee is involved in an activity:
a. the operations of which are in conflict with a present or prospective activity of the Company,
including research and development;
b. which provides products or services directly to, or purchases products or services from, the
Company;
c. which subjects the employee to unreasonable time demands that prevent the employee from
devoting proper attention to his or her responsibilities to the Company; or
d. which is so operated that the employee's involvement with the outside business activity will
reflect adversely upon the Company.
Other situations may arise in which the interest in question is such as to bring it within the area
of potential conflict of interest. In case an employee has any question concerning whether any
activity involves a conflict, any employee who is not an officer or director should discuss the
situation with his or her supervisor or the Chief Executive Officer. Officers must seek
authorizations and determinations from the Audit Committee. Material related-party transactions
approved by the Audit Committee and involving any executive officer will be publicly disclosed
as required by applicable laws and regulations. See Section 10 below for provisions of this Code
specifically applicable to non-employee directors.
7. Interests in Competitors, Suppliers or Customers
No employee nor any member of his or her immediate family shall have a significant financial
interest in a company which does business with the Company or in a company which is any of
the Company's competitors, customers or suppliers. Generally, a "significant" interest is one
which is so substantial by virtue of its absolute size or relative importance to the employee
compared to his or her income or other investments that it might interfere with the employee's
independent judgment in the Company's best interest. All employees should consult with the
Chief Executive Officer if they have any questions regarding whether their interest is
"significant." See Section 10 below for provisions of this Code specifically applicable to
non-employee directors.
8. Outside Business Interests
No employee shall undertake any outside business interest without first assuring that no conflict
of interest exists. Generally, an outside business interest is one which involves an employee in a
business enterprise as a director, officer or significant stockholder. If, in the employee's
judgment, a contemplated outside business interest does not present a conflict of interest, then
the employee should seek Company approval to undertake the contemplated involvement in the
outside business interest through the Chief Executive Officer. In the event approval is given and
the employee becomes involved in such activity, the employee will have a continuing
responsibility for insuring that no conflict of interest develops. If a conflict should arise in the
future, the employee will be expected to report the conflict of interest to the Company and
terminate the involvement immediately if the conflict of interest cannot be resolved. See Section
10 below for provisions of this Code specifically applicable to non-employee directors.
9. Outside Employment
While outside employment is not encouraged, it is recognized that there are circumstances in
which it is acceptable. No employee, however, shall accept employment where the possibility of
a conflict of interest exists. Under no circumstances may the Company's materials, services or
premises be used in furtherance of such outside employment. No employee may accept a
position as an officer, director, partner, consultant, representative, agent or employee of a
competitor, supplier or customer of the Company. This prohibition extends to businesses that
deal in areas or product lines that are similar to those of the Company and businesses that might
wish to be a supplier of the Company or have the Company as a customer. See Section 10 below
for provisions of this Code specifically applicable to non-employee directors.
10. Non-employee Directors
Notwithstanding Sections 6 through 9 of this Code above, the non-employee members of our
Board of Directors may have various business, financial, scientific or other relationships with
existing or potential collaborators, suppliers or competitors. Any actual or potential conflicts of
interest relating to any of these relationships of our non-employee directors that have been
disclosed to our Board of Directors shall not be considered violations of this Code and shall not
otherwise require a waiver of any provisions of this Code. Notwithstanding the foregoing, if the
Board of Directors affirmatively determines that any such relationship is inconsistent with the
director’s responsibilities, it shall so advise the director and the director shall terminate the
relationship as promptly as practical. Directors must seek authorizations and determinations
from the Audit Committee. Material related-party transactions approved by the Audit
Committee and involving any director will be publicly disclosed as required by applicable laws
and regulations.
11. Confidential and Proprietary Information
Each employee shall take appropriate precautions to safeguard confidential and proprietary
information of the Company. Confidential and proprietary information includes not only
information that is labeled as such, but also information and data developed in the course of the
Company's activities, the disclosure of which could be harmful to the interests of the Company.
Lab notes, product and business plans, budgets, customer lists, sales forecasts, trade secrets and
design plans, and research and engineering data are examples of confidential and proprietary
information which employees are expected to safeguard. No employee shall disclose to the
Company or induce the Company to use any confidential or proprietary information of others.
No employee, other than specifically designated representatives of the Company, should speak
with the media, securities analysts, investors or regulatory or governmental agencies without
clearance from the Chief Executive Officer.
12. Nonpublic Information
No employee who has knowledge of material nonpublic information about the Company or its
plans, gained either within or outside the scope of his or her employment, may take advantage of
such information for personal gain or for the benefit of others; nor may the employee disclose
such information to anyone, except in the performance of his or her duties on behalf of the
Company. Employees must exercise care not to disclose material nonpublic information
regarding the Company, either intentionally or inadvertently, under any circumstances.
Information is "material" if an investor could consider the information important in deciding
whether to buy, sell or hold securities of the Company. Employees should consult with the Chief
Executive Officer if they are unsure as to whether they are in possession of material nonpublic
information.
IMPLEMENTATION
1. Dissemination of Code of Conduct
Each current employee of the Company will be provided with a copy of the Code of Conduct,
and will be required to submit to the company a signed statement acknowledging that (i) the
employee read and understood the Code of Conduct and (ii) agrees to comply with its
requirements as a condition of employment. All new employees will receive a copy of the Code
of Conduct with their orientation materials and will also be required to sign a statement
acknowledging the matters stated above.
2. Employee Obligations
Each employee is required to conduct himself or herself in accordance with the standards set
forth in the Code of Conduct, and to report to his or her supervisor or the Chief Executive
Officer any violations of the Code of Conduct of which the employee becomes aware. The Code
of Conduct operates as an honor code; it is essential that each employee take responsibility for
monitoring company-wide compliance with the Code of Conduct and reporting any violations.
Employees who do not feel comfortable reporting a suspected violation to their immediate
supervisor, should report the violation to the Chief Executive officer or to a member of the
Company's Board of Directors, going as far up the Company's chain of authority as is necessary
to ensure that appropriate corrective action is being taken. As needed, the Chief Executive
Officer will consult with the legal department and/or the Audit Committee of the Board of
Directors. All reported violations will be investigated and remedial action, depending on the
nature of the violation, will be taken.
3. Enforcement
Each reported violation of this Code of Conduct will be investigated by the Company. After
investigation, appropriate action will be taken which may include disciplinary action (including
termination) and the reporting of suspected criminal conduct to appropriate authorities. The
intimidation or harassment of anyone who reports, or is considering reporting, a suspected
violation of this Code of Conduct is a breach of this Code of Conduct and will be dealt with
appropriately.
4. Responsibility
Overall responsibility for administering and enforcing this Code of Conduct lies with the
Company's Chief Executive Officer. Implementation and regular administration and enforcement
have been delegated to the managers of the Company's various divisions, departments and
subsidiaries. These individuals are responsible for ensuring that the employees understand the
Code of Conduct, all reports of violations are investigated and that appropriate action is taken.
WAIVERS
Any waiver of this Code for executive officers (including, where required by applicable laws,
our principal executive officer, principal financial officer, principal accounting officer or
controller (or persons performing similar functions)) or directors may be authorized only by our
Board of Directors or, to the extent permitted by the rules of Nasdaq, a committee of the Board
of Directors and will be disclosed to stockholders as required by applicable laws, rules and
regulation.
EMPLOYEE STATEMENT OF UNDERSTANDING
1. By signing this Statement of Understanding, I hereby acknowledge that I have received and
read the Code of Conduct of Tapestry Pharmaceuticals, Inc. (the "Company") in effect as of the
date hereof, I fully understand the policies set forth therein and I expressly agree to abide by
them. I understand that the execution of this Statement of Understanding is a condition of my
employment by the Company.
2. I understand that any failure on my part to abide by the terms and conditions of the Code of
Conduct could lead to disciplinary action by the Company, including the termination of my
employment.
3. Should any matter or dealings in which I am now or hereafter become involved, on my own
behalf or as an employee of the Company, appear to conflict with the Code of Conduct as then in
effect, I will promptly disclose the facts relating to such perceived conflict to the Company, and
will take whatever action is required by the Company to resolve any actual conflict found to
exist.
4. I understand that the Code of Conduct will be reviewed periodically by the Company and that
the company reserves the right to alter, amend, modify or terminate any provisions contained in
the Code of Conduct at any time without notice to me. I acknowledge and understand that the
obligations which I have undertaken pursuant to this Statement of Understanding may not be
changed, released or terminated, in whole or in part, except by an instrument signed by a duly
authorized officer of the Company.
5. This statement of Understanding supersedes any prior agreement, written or oral, between the
Company and me relating to the matters which are the subject of the Code of Conduct.
6. This Statement of Understanding does not create a contract of employment between the
Company and me.
GRANTED WAIVERS FROM THE CODE OF ETHICS AND
BUSINESS CONDUCT
- None.
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