**Exhibit 14.1**

 

**A LETTER TO ASSOCIATES OF**

**THE NEIMAN MARCUS GROUP, INC.**

 

We are writing to tell youabout the Code of Ethics and Conduct (“Code”) and how it applies to you.  We also want to remind you of certainfundamental ethical principles that guide how we conduct our business.

 

One unwavering rule liesat the core of our business philosophy: we conduct all business in strictcompliance with both the letter and the spirit of the law, and with ascrupulous commitment to the highest standards of business and personalethics.  Our policies and standards ofconduct reflect these basic principles, but words alone cannot create a moralconscience or guarantee adherence to these standards.  Each associate plays an important part inmaintaining these high standards.

 

Through its operating units,The Neiman Marcus Group, Inc. (“NMG” or the “Company”) does business inmany communities throughout the world. All associates are ambassadors of the Company, and their conduct has adirect and significant impact on the Company’s business and reputation.  The Company’s objective is to be respectfuland tolerant of different values and customs and to be a model corporatecitizen in all of the communities in which we do business.

 

**This is not just bureaucratictalk.  We mean it. **As part of our complianceefforts, we have implemented a program to ensure that all associates have aclear understanding of their legal and ethical responsibilities, have access tomanagement in order to obtain guidance when difficult questions arise, and havea full and fair opportunity to advise the Company if they feel illegal orunethical actions have been committed or will be committed by vendors,suppliers, or other associates.  TheCompany supports the efforts of associates who report violations or suspectedviolations of the Code in good faith. The Company will not tolerate any form of retaliation against suchindividuals, even if upon investigation their suspicions prove to be incorrect.

 

The Company is committed toa comprehensive compliance program that includes many elements.  The Code reiterates and emphasizes theCompany’s long-standing policies on matters such as antitrust, insider trading,product safety, and equal employment opportunities, and sets forth proceduresto ensure compliance.  Educationalprograms enable each associate to recognize and respond appropriately to legaland ethical issues that may arise.  TheCompliance Committee, headed by the Company’s General Counsel, oversees thetraining and compliance program. Associates are encouraged to discuss concerns with whomever they feelmost comfortable: a supervisor, an NMG attorney, the Human ResourcesDepartment, the Associate Relations Department, or the ComplianceCommittee.  Associates may also reportissues using EthicsPoint, an independent online program that permits bothidentifiable and anonymous reporting.

 

**We need your help. **While we realize that thelength of the Code may seem somewhat overwhelming, much of it is based oncommon sense.  We ask you to read theCode carefully to ensure that you understand both the important legal andethical responsibilities that we all share, along with the consequences fornon-compliance.  Each associate will berequired to certify that he or she understands the Code and will abide by it. ** **We must rely on eachassociate’s good judgment and recognition that only associates who abide by theCode and the Company’s policies have a place with us. Working together, we cantake personal pride in being part of an organization that is second to none inits pursuit of excellence through commitment to the highest legal and ethicalvalues.

 
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| Burton M. Tansky                                                   | Karen Katz                                           | Brendan Hoffman                                      | Jim Gold                                                    |
|--------------------------------------------------------------------|------------------------------------------------------|------------------------------------------------------|-------------------------------------------------------------|
| President and                                                      | President and                                        | President and                                        | President and                                               |
| Chief Executive Officer –  The Neiman Marcus Group, Inc. | Chief Executive Officer –  Neiman Marcus Stores | Chief Executive Officer –  Neiman Marcus Direct | Chief Executive Officer –  Bergdorf Goodman, Inc. |

 

THE CODE

 

The Code contains importantinformation about the Company’s ethics, legal principles, and standards ofconduct. All associates are expected to read the Code thoroughly and refer toit as a guide to ensure strict compliance with all laws and policies.  Many of the obligations (for example, theduty not to share information with a competitor) will continue after anassociate has left the Company. Department heads are responsible for Code enforcement in theirdepartments and supervisors are accountable for the associates who report tothem.  Throughout this document, we willrefer to The Neiman Marcus Group, Inc, as “NMG” or the “Company,” and bothterms should be treated interchangeably. All references to the “associates” means all full time, part time,temporary and seasonal associates of NMG, Neiman Marcus Stores, Neiman MarcusDirect, Neiman Marcus Online, Bergdorf Goodman, Inc., Bergdorf Graphics, Inc.,Horchow, Cusp and their respective subsidiaries.

 

**CONSEQUENCES OF NON-COMPLIANCE**

 

All associates are expectedto exercise sound discretion and good judgment based upon the highest level ofbusiness ethics.  Violations of policymay result in disciplinary action up to and including termination ofemployment.  In some cases, an associatewill have the opportunity to provide an explanation before disciplinary actionis taken.  Violations of a criminalnature may subject an associate to criminal prosecution, imprisonment orfines.  An associate may also beobligated to reimburse the Company, the government or any other person orentity for resulting losses or damages.

 

**DUTY TO REPORT**

 

Eachassociate has a duty to report actual or suspected violations of the Code andall illegal activity applicable to our business.  Reports must be made to either theirsupervisor, an NMG attorney, the Human Resources Department, the AssociateRelations Department, or to the Compliance Committee.  The Company prefers that associates identifythemselves when reporting violations or suspected violations, however, reportsmay also be made anonymously through EthicsPoint website www.ethicspoint.com,or by calling 1-800-573-2022.  Contactinformation for the Compliance Committee is available in Appendix 1.  If a report is made to a supervisor, thesupervisor must immediately contact the Human Resources Department, theAssociate Relations Department, or an NMG attorney before conducting anyinvestigation or providing a formal response.

 

Whenreporting any violation, associates will be asked to provide detailedinformation, including the identities of all witnesses, and all documentssupporting the claim.  The Company willdo its best to conduct a thorough investigation based on the information 

 

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presented.  If you feel at any time that a matter hasbeen overlooked or unaddressed, please notify the Legal Department.

 

The Company and itsassociates are prohibited from imposing any form of retaliation against anyonewho files a report in good faith, without regard to the identity or position ofthe suspect offender.  Reports submittedin bad faith or containing false or misleading information may subject thereporter to disciplinary action.  Failureto report knowledge of wrongdoing may result in disciplinary action againstthose who fail to report such matters. An associate is not immune from disciplinary action by simply filing areport, as evidence of misconduct may still be grounds for appropriatedisciplinary action.

 

COMPLIANCE WITH LAWS ANDRELATED POLICIES

 

**FAIR DEALING**

 

Associates must deal fairlywith all co-workers, customers, vendors, suppliers, competitors, and thirdparties.  Under no circumstances may anassociate engage in manipulation, concealment, abuse of confidentialinformation, misrepresentation of material facts, or any other unfair practice.

 

**ANTITRUST LAWS**

 

Associates are prohibitedfrom making any agreements with competitors in restraint of trade, and shallnot engage in price fixing, resale price maintenance, unlawful boycotts, pricediscrimination or other acts that violate applicable antitrust and tradepractice laws.

 

Federal and state antitrustlaws are intended to preserve and to promote fair and open competition, whichlies at the foundation of a free enterprise system.  While the Company should compete aggressivelyand creatively, its commitment is to compete in strict compliance with theletter and spirit of all antitrust and trade practice laws.  These laws generally forbid agreements orjoint actions between competitors regarding prices, product or territoryallocations, customers or suppliers, agreements or joint actions between asupplier and a customer that restrain or tend to reduce competition, and anyconduct of a single firm that is intended to illegally establish or maintain adominant market position or monopoly. Associations, joint ventures or mergers with actual or potential competitorspose special problems that need to be analyzed with particular care and must beapproved in advance by the Legal Department.

 

Under antitrust laws,unlawful agreements need not take the form of a written contract or consist ofexpress commitments or mutual assurances. Courts can — and do — infer agreements based on informal discussions orthe exchange of information between competitors from which pricing or othercollusion could result.  Anycommunication with a competitor’s representative, no matter how innocuous itmay seem at the time, may later be subject to antitrust scrutiny and form thebasis for accusations of improper or illegal conduct.  Associates must conduct all relations withcompetitors and other third parties, including social activities, as if theywere completely in the public view, as those relations may be subject toprobing examination and unfavorable interpretation.

 

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For example, tradeassociation meetings and other industry gatherings typically serve perfectlylegitimate and worthwhile purposes. However, these meetings also provide an opportunity for unlawfulcommunications to occur because they bring together competitors who sharecommon business interests and problems. Informal gatherings outside official trade association meetings areparticularly risky from an antitrust perspective.

 

Antitrust laws that involveprices and pricing procedures pose particular risks for the Company and itsassociates.  Associates must always makeindependent pricing decisions that are in the Company’s best interest and arebased on factors such as value to the customer, costs and competitive pressurein the marketplace.  Associates must notcommunicate either directly or indirectly with competitors concerning sensitiveinformation such as prices charged, sale dates or percentages, business ormarketing strategies, profit margins or credit and billing practices.  To avoid any appearance of indirectcommunications with competitors, vendors and distributors should be discouragedfrom sharing with the Company any sensitive information concerning otherretailers or from disclosing information about the Company to others.

 

Associates also must notreach agreements with vendors or distributors regarding the price at whichproducts will be resold.  Although amanufacturer may suggest retail prices and markdown dates and percentages, anyagreement with a vendor requiring the Company to adhere to a retail price or tochange the Company’s prices may be illegal resale price maintenance.

 

Finally, vendors anddistributors must not discriminate in the prices, terms of sale or advertisingor promotional programs and allowances they provide to competingretailers.  While it is not the Company’sobligation to ensure that such vendors and distributors do not discriminateagainst other retailers, associates must not induce or knowingly receiveunlawful preferences in price, terms or promotional allowances or servicescompared with competitors who purchase similar products from the seller.  Thus, while associates are encouraged tonegotiate the best possible prices, terms, and cooperative advertisingarrangements, they must not affirmatively seek terms that are better than thoseoffered to competing retailers.

 

In addition to price fixing,resale price maintenance, and price discrimination, antitrust laws prohibitother noncompetitive activities including: predatory pricing (i.e., sellingbelow cost); group boycotts; agreements; monopolization; unlawful terminationof dealers, suppliers or distributors; and, under certain circumstances,attempts to engage in many of these types of activities,  Moreover, antitrust laws generally prohibitany unfair or deceptive trade practices or methods of competition, includingmisleading advertising, disparaging a competitor’s products or services,harassing a competitor and stealing trade secrets or confidential businessinformation.

 

The above description doesnot exhaust the reach of all antitrust laws. It does demonstrate, however, that antitrust laws, which attempt toensure that superior market position is achieved only by superior products andperformance, affect nearly every business decision made by associates on theCompany’s behalf.  The costs andconsequences of an antitrust investigation or litigation can be serious forindividual associates, as well as for the Company itself, even if theassociates and the Company are ultimately vindicated.  Individual violators of antitrust laws can beimprisoned and subject to significant monetary fines.  Corporations that violate antitrust laws canbe subject to criminal penalties in excess of $10 million per violation.  In addition, companies 

 

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can be subject to trebledamage awards in civil lawsuits.

 

**INSIDERTRADING**

 

Federal securities lawsforbid the purchase or sale of a publicly traded security based upon “inside”information unavailable to outside parties. The term “inside information” means any material information that hasnot been publicly disclosed by the Company. These laws also prohibit employers, directors, officers and associatesfrom “tipping” others with inside information or knowingly or recklesslyfailing to take steps to prevent others whom they control (whether directly orindirectly) from trading on such inside information.  Trading under these circumstances is onlypermissible after a reasonable amount of time has passed after the Company hasdisclosed this information to the public. Specifically, associates shall not:

 

·                  share insideinformation with individuals outside the Company;

·                  use or discloseany non-public or inside information about other companies;

·                  trade stock orsecurities of the Company or other firms based on inside information; or

·                  advise othersto buy or sell securities of the Company.

 

*What is “material”?*** **Any fact which may affectthe price of the stock or securities and/or which a reasonable investor wouldconsider important in deciding whether to purchase or sell shares of stock orother securities of the Company is generally considered material.  Examples include: financial results orforecasts; a significant proposed acquisition or disposition of a business;hiring, firing or resignation of a director or officer of the Company; a stocksplit or change in dividend; significant litigation; or changes in customaryearnings and earnings trends.

 

*What constitutes publicdisclosure?*** **Information iseffectively disclosed to the public if it is contained in an annual orquarterly report to stockholders, a Company press release, or in public filingswith securities regulatory authorities.

 

*What is a reasonable period oftime after which purchases and sales can be made?*** **Essentially, the investingpublic must have had time to digest and to analyze the information which hasbeen disclosed.  With regard toinformation in a press release, purchases and sales can be generally madebeginning two (2) business days after the release.  For information in a report mailed tostockholders, purchases and sales should not be made until at least one (1) weekafter the date of mailing.

 

Associates must not discussCompany affairs with securities analysts, members of the press, or any otherpersons who do not have a direct relationship with the Company.  Discussing the affairs and prospects of theCompany could lead to serious legal liability and must be conducted only by theInvestor Relations department or other authorized personnel.

 

**EMPLOYMENT LAWS**

 

Associates are required tocomply with all applicable labor and employment laws.  Associates must also help promote the Company’sgoal of providing a safe and healthy workplace that is free of sexualharassment or other types of misconduct, and help ensure equal treatment in therecruitment, hiring, placement, training, compensation, 

 

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benefits, education anddevelopment, transfer, promotion, demotion, discipline and termination of allassociates.

 

*EQUALEMPLOYMENT OPPORTUNITY*

The Company is an equalopportunity employer and takes seriously its obligations to comply with the lawwith respect to hiring, employing and other dealings with applicants andassociates without regard to their race, religion, national origin, gender,age, disability, pregnancy, marital status, sexual orientation, or any othercategory protected by applicable law. The Company’s policy is to take personnel actions strictly on the basisof individual ability, performance, experience and relevant businessneeds.  Actions influenced by personalrelationships or by illegal discriminatory motives of any kind are strictlyprohibited.

 

*HARASSMENT*

The Company’s policy is toprovide a work environment free from unlawful harassment in any form, whetherphysical, verbal or non-verbal.  Unlawfulworkplace harassment may include harassment based upon a person’s race,religion, national origin, gender, age, disability, pregnancy, marital status,sexual orientation, or any other category protected by law.

 

*SEXUALHARASSMENT*

The Company also prohibitssexual harassment of any kind.  Sexualharassment undermines the integrity of the employment relationship, and noassociate should be subjected to unwelcome sexual conduct by supervisors,co-workers, contractors, vendors, customers, suppliers, or any third party.

 

Sexual harassment does notrefer to occasional compliments of a socially acceptable nature.  It refers to conduct of a sexual nature, inany form, whether physical, verbal, or non-verbal, that is unwelcome andcreates a work environment that is hostile, offensive or coercive.  While sexual harassment is not easy todefine, it may include:

 

·                  unwelcomesexual jokes, language, epithets, advances or propositions;

·                  unwelcometouching, leering, or whistling;

·                  suggestive,insulting or obscene comments or gestures;

·                  demands forsexual favors in exchange for favorable reviews, assignments, promotions, orcontinued employment;

·                  questions aboutsexual conduct or practices;

·                  unwelcomecomments about an individual’s body or sexual activity; and/or

·                  display ofsexually suggestive pictures, posters, objects or drawings.

 

Anyassociate who believes that he or she has been subjected to sexual harassmentin violation of Company policy should promptly report their concerns inaccordance with the section entitled Discrimination and Harassment, below.

 

The Company has no desire tointerfere with consensual relationships between co-workers; however,individuals may be (or may appear to be) improperly influenced by the existenceof a personal relationship.  Insituations where one of the parties in a relationship supervises or evaluatesthe other, the relationship must be disclosed to management immediately and theconflict must be resolved.  The Companyreserves the right to take appropriate action to avoid potential problems,including, but not limited to, changing an associate’s job or changing thereporting relationship between the parties.

 

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*IMMIGRATION*

Associates in a supervisoryposition are required to ensure that they and any associates who work for themcomply with all applicable immigration laws. Associates who travel internationally on business are responsible forobtaining appropriate work authorization as necessary.

 

*AMERICANSWITH DISABILITIES ACT*

The Americans withDisabilities Act (“ADA”) is intended to protect qualified individuals withdisabilities against discrimination in employment and the provision of servicesto the public.  The Company is committedto compliance with the ADA and all associates are strictly prohibited fromdiscriminating against qualified applicants or associates with actual orperceived disabilities, or customers with actual or perceiveddisabilities.  All requests foraccommodation should be made in writing and directed to the Human ResourcesDepartment.

 

*DISCRIMINATIONAND HARASSMENT*

NMGhas adopted a corporate policy that all associates must treat each other, andare entitled to expect to be treated, with dignity.  Any form of discrimination or harassment,specifically including discrimination or harassment based on any category protectedby law will not be tolerated.  Consistentwith this policy, associates are expected to extend tolerance and respect forone another’s cultures, lifestyles, and uniqueness.  An associate who believes they have beensubjected to or who becomes aware of a situation involving discrimination orharassment should immediately proceed to Step 1 of *NMGRESOLUTIONS,*TM as outlined below.  The Company will not permit retaliation ofany kind against any associate who makes a good-faith complaint ofdiscrimination or harassment or who assists in an investigation of acomplaint.  On the other hand, theCompany will not tolerate false accusations of discrimination or harassmentmade either maliciously or recklessly. In such cases, the accuser will be subject to disciplinary actioncommensurate with the factual circumstances and seriousness of the matter.

 

*COMMUNICATION*

Communicationis an important part of our success. This is particularly important if an associate experiences a problem intheir work.  If associates have a problemin the ordinary course of business, they are expected to go to their manager orsupervisor to talk about it in a mutually respectful atmosphere.  The vast majority of an associate’sday-to-day problems can and should be handled in this way.  Likewise, an associate should talk with hisor her manager or supervisor if he or she has any ideas about how to improvethe workplace.

 

*NMGRESOLUTIONSTM*

Forall workplace disputes that cannot be resolved by communicating with a manageror supervisor, including without limitation, claims of discrimination orharassment, NMG has adopted a unique 4-step program called *NMGRESOLUTIONS.TM*  The Companyexpects each associate to familiarize himself or herself with this program andmandates adherence to the following four steps by all associates who haveworkplace disputes.

 

**Step 1**  Discussthe dispute with your supervisor or local Human Resources Department, who willwork with you to get the dispute resolved. If the dispute is not resolved, then go to Step 2.

 

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**Step 2**  Discussthe dispute with the Associate Relations Department in the corporate offices inDallas, Texas, whose commitment is to work with you to get the disputeresolved.  If the dispute is still notresolved, then go to Step 3.

 

**Step 3**  Presentyour dispute to a completely neutral third party — a “mediator” — who will beappointed by a neutral, professional mediation association, to get the mediator’sopinion and enlist his or her help in resolving the dispute.  If it is still not resolved, then you must goto the final step, Step 4.

 

**Step 4**  Insteadof taking a dispute to court — which you and the Company may no longer do — youpresent your claims to a neutral and independent “arbitrator” for final andbinding arbitration.  Generally, theArbitration Agreement provides for the appointment of an arbitrator by acompletely neutral arbitration association that is recognized as one of thepremier, independent arbitration agencies in the world.  They will appoint a neutral arbitrator who isalways a lawyer and sometimes a former judge. The arbitrator will conduct a “trial” where evidence is heard andwitnesses are called.  Once all theevidence has been reviewed, the arbitrator will issue a final decision, whichis binding on everyone.

 

*MANDATORYARBITRATION*

Fairand efficient resolution of workplace disputes is in everyone’s bestinterest.  By entering into or continuingemployment with NMG, associates are deemed to have agreed to be bound by theArbitration Agreement, and waive all rights to a judge or jury trial for alldisputes.

 

Thisbrief description of the Arbitration Agreement should be regarded as a generaloutline, and you should carefully review the terms and conditions set forth inthe Arbitration Agreement itself.

 

*SAFETY AND HEALTH*

TheCompany is committed to protecting the health and safety of its associates,visitors, and the public.  The Company’spolicy is to maintain its facilities and run its business operations incompliance with all occupational health and safety laws.  Associates must follow all applicable lawsand regulations and promptly report to management any unsafe conditions,hazards, broken equipment or machinery, as well as injuries or accidents on thepremises.

 

To ensure a safe and healthywork environment, associates who contract dangerously communicable diseasesmust notify their supervisors immediately.

 

**CONTRACTING WITH OTHER PARTIES**

 

The Company is committed tomeeting all of its contractual obligations and associates are expected to know,understand, and honor the terms of all of its contractual agreements.  The Company further expects its associates tocompete fairly and ethically for all business opportunities.  All statements, communications, andrepresentations to other parties made in the course of any contractnegotiations must be accurate and truthful.  As used in this section, the term “agreement”includes formal contracts, letters of intent, offer letters, and exchanges ofcorrespondence involving the express or implied acceptance of an offer.

 

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It is the Company’s policyto formalize all agreements in writing. Exceptions may be made under certain circumstances, but only with priorapproval from the Legal Department. Every new agreement must be pre-approved by the Legal Department unlessan identical form agreement has been previously authorized.  Pre-approval is not required on commonlyprinted forms related to commercial travel, car rental, shipment of goods,magazine subscriptions, or any other purely routine matters that common sensedictates may be transacted without prior legal review.

 

*ENTERINGAGREEMENTS*

Only certain associates areauthorized to sign contracts.  Beforemaking commitments on behalf of the Company, an associate must ensure thathe/she has the required signing authority. Entering into unauthorized side letters or oral agreements is prohibitedand may be grounds for disciplinary action. In most cases, the Company, and not the other contracting party, shouldtake the initiative in preparing agreements. The Legal Department should be conferred with at the earliestopportunity, so that it may anticipate legal problems and work proactively withmanagement personnel rather than having to react later under unnecessary timeconstraints.  If there are any questions,please contact the Legal Department.

 

*TERMINATINGAGREEMENTS*

Periodically, the Companymay wish to terminate an agreement before it is due to expire.  Because certain liabilities may arise thatare not readily apparent, termination of any agreement requires a criticalreview of possible ramifications. Therefore, no agreements should be terminated without the approval of anattorney within the Legal Department.

 

**PRODUCT SAFETY**

 

The Company is committed tocomplying with all applicable product safety laws and regulations.  Although vendors and manufacturers areultimately responsible for ensuring the safety and usability of their products,the Company must take reasonable steps to ensure that their products satisfyapplicable legal requirements.  Suchsteps protect the Company’s reputation and customer relationships, and limitthe risk of potential legal liability. While not an exhaustive list, the following provides a brief overview ofsome requirements.

 

*FLAMMABILITYSTANDARDS*

Textiles used to manufactureclothing sold in the United States must meet required flammability standards.  Associates involved in buying apparel areresponsible for obtaining from vendors copies of test results indicating thatthe fabrics used in clothing sold to the Company meet applicable flammabilitystandards.  Note that stricter standardsapply for fabrics used in children’s sleepwear. Vendors should provide copies of applicable continuing guarantees ofcompliance filed by them with the Consumer Products Safety Commission.  If an associate becomes aware of any productsold by the Company that does not comply with flammability standards orcontains a defect which may pose a safety hazard to consumers, the associatemust notify the Legal Department immediately.

 

*CHILDREN’S TOYS*

Toys and other children’sitems that present potential choking or ingestion hazards must be properlylabeled to identify that they are not intended for use by children under three 

 

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(3) years of age.  Electrically operated toys or otherelectrical products intended for use by children must also comply withapplicable regulations.  The surfaces oftoys and other items intended for use by children must not be coated with paintor other products containing lead.  If anassociate becomes aware of any product sold by the Company that does not complywith safety regulations or contains a defect which may pose a safety hazard tochildren, the associate must notify the Legal Department immediately.

 

*FOODAND COSMETIC PRODUCTS*

It is illegal to adulterateor to misbrand cosmetics, meat, poultry, or other food products. Associatesinvolved in buying these products must confirm with vendors that their food andcosmetic items satisfy applicable regulations and nutritional labelingrequirements.  Where applicable,associates must obtain copies of “Continuing Pure Food and Drug Guarantees”filed by vendors with the Food and Drug Administration.  If an associate becomes aware of any productsold by a vendor that does not comply with safety regulations or nutritionallabeling requirements, or which otherwise poses a safety hazard to consumers,the associate must notify the Legal Department immediately.

 

*POTENTIALLYHAZARDOUS PRODUCTS*

In addition to specificsafety regulations, the law generally prohibits the sale of defective productsor products which potentially pose a safety hazard to consumers.  If an associate becomes aware of any productsold by the Company that does not comply with applicable safety regulations orwhich otherwise contains a defect that may pose a safety hazard to consumers,the associate must notify the Legal Department immediately.

 

**INTELLECTUAL PROPERTY**

 

TheCompany’s copyrights, trade names, trademarks, patents, and trade secrets arevaluable assets which must be protected at all times.  Each associate is required to follow all ofthe guidelines described below for protecting NMG’s intellectual propertyrights and the rights of others.

 

*COPYRIGHTCOMPLIANCE*

Acopyright is a set of exclusive rights granted by the government for a limitedtime to protect the particular form, way or manner in which an idea orinformation is expressed.  Under Federalcopyright laws, a copyright is granted to the creator of any work ofauthorship, such as books, articles, magazines, drawings, computer software andphotographs.** **Works createdby associates in the course of their employment are owned exclusively by theCompany.  Reproduction of copyrightedmaterials without written authorization from the copyright owner is strictlyprohibited.  All questions regardingcopyrights should be directed to the Legal Department.

 

*TRADEMARKPROTECTION*

A trademark is a word,symbol, slogan, logo, device or combination used to identify and distinguish aproduct, line of products or services from those belonging to another person orcompany.  The Company owns a number oftrademarks which are extremely valuable and well recognized by the public.  Associates must vigilantly protect allCompany trademarks by using them correctly and notifying the Legal Departmentimmediately of any unauthorized use by an associate or any third party.  Associates shall not alter or modify anytrademarks or tradenames in any manner without the approval of the LegalDepartment.  The Company is committed torespecting the trademark rights of others,

 

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and associates areprohibited from using trademarks that are confusingly similar to thosebelonging to other parties.  Allquestions regarding trademarks should be directed to the Legal Department.

 

*TRADESECRETS / PROPRIETARY & CONFIDENTIAL INFORMATION*

Trade secrets andproprietary and confidential information may consist of any formula, pattern,device or compilation of information that the Company maintains in secrecy anduses to conduct its business or for competitive advantages.  The Company has developed such informationand often has access to similar information belonging to other parties withwhom the Company does business.  Examplesinclude items such as customer lists, vendor lists, business or financial plans,projections, profits, gross margins, marketing plans, sales plans, competitiveanalyses, pricing information, contracts, and other like information.  Associates are required to maintain andsafeguard the confidentiality of all information entrusted to them by theCompany or its vendors, except when disclosure is authorized in advance by theLegal Department.

 

Associates must not usetrade secrets or proprietary or confidential information obtained from formeremployers or third parties, unless prior authorization has been obtained fromthe Legal Department.

 

Associates must dispose ofall confidential material in an appropriate manner, which may include shreddingand discarding such material in secured waste receptacles.  Associates shall not, at any time, eitherdirectly or indirectly, divulge, disclose or communicate any confidential ornon-public information relating to Company business, including informationregarding customers, product pricing, Company operations strategies, practices,business plans, or any other information which may, if disclosed, be harmful tothe Company or its customers, or be useful to its competitors.  Associates should refrain from discussingconfidential information in public areas, such as in airplanes, restaurants, oncell phones, and in non-private areas, such as cafeterias and elevators.

 

All files, records andreports acquired or created in the course of employment are the property of theCompany, including any hard copies, electronic files, customer lists, computerhardware and software, statistical analyses, handbooks, internal documents,product pricing business formulas and models, identification cards, keys, andaccess cards.  Immediately before or upontermination of employment, associates must return all property belonging to theCompany.  Associates are prohibited fromretaining copies of any such property. To the extent permitted by law, the Company reserves the right towithhold any funds due to an associate until all such property has beenreturned.

 

These obligations shallcontinue after any termination of employment with the Company.  Questions concerning the classification ofany information as being a trade secret or as proprietary or confidentialinformation should be directed to the Legal Department.  Associates must not use or disclose any questionableinformation unless and until they are certain such use or disclosure ispermitted.

 

**INTERNATIONAL BUSINESS**

 

Associates must strictlycomply with all U.S. laws governing foreign operations and the laws of eachcountry in which the Company conducts business. This includes the Foreign Corrupt Practices Act (“FCPA”), import andcustoms controls, export controls, 

 

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antiboycott laws, andembargos mandated by the U.S. State Department. Associates must also be respectful and tolerant of the values andlegally permissible customs of the communities and countries in which theCompany does or seeks to do business. Illegal activities are strictly prohibited, even if a particularcommunity or country does not enforce certain laws.

 

*THEFOREIGN CORRUPT PRACTICES ACT*

The FCPA prohibits making oroffering bribes, kickbacks, or payments of money or anything of value togovernment or public officials, political parties, candidates for politicaloffice, or to any third party for any purpose in connection with the Company’sbusiness operations.  This includesgiving money or anything of value to a third party where there is reason tobelieve that it will be passed on to a government official for this purpose.  This prohibition applies regardless ofwhether the source is from personal or Company funds.  To ensure compliance with the FCPA, allpayments to such parties must be pre-approved by the Legal Department.

 

*IMPORTAND CUSTOMS CONTROLS*

Associates are required tocomply with all U.S. laws, U.S. Customs Services regulations (“Customs”), andall regulations created by federal agencies relating to, or governing, theimportation or exportation of goods and technology to and from the UnitedStates.  Associates are required toreport all violations or questionable transactions of U.S. Customs laws toeither their supervisor, an NMG attorney, the Human Resources Department, theAssociate Relations Department, or to the Compliance Committee.

 

Customs and trade laws providethat all imported goods must enter the United States with the appropriate quotaor export/import licenses, labels, markings, bills of lading, and commercialinvoices.  All goods must be adequatelyand correctly described and all payments and/or charges related to theimportation must be disclosed to Customs. In addition, certain types of products (e.g., consumer products andtextiles) are subject to special laws and regulations.  All import transactions are subject to strictrecordkeeping requirements and mandate that records be retained for a period ofat least five (5) years from the date of the transaction.

 

Both Customs and Companypolicy forbid the importation of goods produced by illegally employed underageworkers, convicts or forced labor.  The importationof transshipped goods is also prohibited. Transshipped goods are goods which are misrepresented on entry to theUnited States as the product of a second country in order to avoid additionalduties or quantity limitations imposed on the country actually producingthem.  The Company should ascertain thatproduct manufacturers are not on the Customs list of transshippers, and thatthey observe appropriate labor practices. Where on-site factory visits are made, associates should be on alert forany indications of these prohibited activities and report them immediately tothe Legal Department.  Where possible,the Company should secure in writing a representation and warranty that theproduct manufacturer will not supply any goods to the Company where theoriginating country is not legally identified or which is produced by underageor involuntary labor.

 

*EXPORTCONTROLS*

Associates are responsiblefor understanding how export controls laws apply to their jobs and forconforming to such requirements.  UnderExport Administration Regulations, the export of goods and services from theUnited States may require a specific export license from the U.S. CommerceDepartment.  The same may apply both totransshipment of U.S. origin goods from the country of original destination toa third country, and to exports of 

 

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foreign made goods with U.S.content.  Associates must consult withthe Legal Department before exporting any goods.

 

*ANTIBOYCOTTLAWS*

The Company will notparticipate in any economic boycott unless sanctioned by the U.S.government.  The Company will not provideinformation that could be construed to further unsanctioned boycotts.  Any requests to do so must be reported to theU.S. Department of Commerce.  If anassociate receives any such request by a third party, it must be reportedimmediately to the Legal Department.

 

*U.S.EMBARGOES*

Associates must comply withtrade restrictions imposed under the International Emergency Economic PowersAct and the Trading with the Enemy Act. Both laws impose restrictions that affect exports, imports, travel,currency transactions, assets and accounts with certain countries, whetherdirectly or through third parties. Associates must confirm that no trade restrictions are in effect withany country with whom the Company does or intends to do business.

 

**POLITICAL ACTIVITIES ANDCONTRIBUTIONS**

 

Associates must comply withall campaign finance and ethics laws, including those prohibiting the use ofCompany funds, assets, facilities, or services to: (1) support or opposepolitical parties or candidates; or (2) reimburse associates who makedonations to support or oppose political parties or candidates.

 

Associates, who makepersonal political contributions, or who participate in the political processor political activities to express their personal views on legislative orpolitical matters must conduct such activities on their own time and at theirown personal expense.  Unless authorizedby the Company, associates who engage in such activities or make any publicpolitical statements must avoid any references to their affiliation with theCompany.

 

Occasionally, the Companymay retain the services of a lobbyist whose sole function is to communicatewith legislative or regulatory officials on behalf of the Company.  Since lobbyists are often subject to specificregistration, reporting, and financial disclosure requirements, associates areprohibited from engaging in any lobbying activities without pre-approval by theLegal Department.

 

**IMPROPER OR UNRECORDED PAYMENTS /EXCESSIVE GIFTS**

 

It is the Company’s policyto maintain accurate and reliable financial records.  Associates are therefore required to retainall supporting documentation necessary to support all payments made or receivedby the Company.  In support of thispolicy, associates shall not:

 

·                  falsely reportany payment in accounting records;

·                  omit anypayment from accounting records;

·                  create ormaintain secret or unrecorded funds or assets;

·                  make false orfictitious entries in the Company’s books or records so as to conceal suchfunds or assets;

·                  make,facilitate or accept any bribes, kickbacks or other improper payments, 

 

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loansor gifts to or from government officials, customers, vendors, suppliers orother business contacts;

·                  give excessiveor uncustomary gifts or services to the Company’s current or prospectivecustomers, vendors, suppliers, or business contacts; or

·                  receiveexcessive or uncustomary gifts or services from the Company’s current orprospective customers, vendors, suppliers, or business contacts.

 

**SALES TAX**

 

All associates must abide bythe rules set forth in the Company’s Sales Tax Policy.  The Company is legally required to collectsales tax in all states where it conducts business.  State laws vary in tax rates, taxable items,and methods of collection.  The Point ofSale (POS) system has been programmed to collect the proper sales tax in eachstore.  An associate must never offer acustomer the option to ship a purchase in order to avoid paying sales tax.  Failure to adhere to these rules willresult in disciplinary action up to and including termination of employment.

 

**FALSE STATEMENTS AND SCHEMES TODEFRAUD**

 

It is the Company’s policy totreat all parties fairly and handle all business transactions with the highestdegree of integrity.  In support of thispolicy, associates shall not:

 

·                  make untruthfulstatements about the Company’s products and services;

·                  willfullyconceal material facts from anyone with whom the Company does business or seeksto do business;

·                  knowingly orrecklessly making commitments that the Company cannot fulfill;

·                  knowingly orrecklessly make or cause to be made oral or written false statements togovernment officials;

·                  conceal orcause to be concealed material facts called for in a governmental report,application, filing, investigation or request for information;

·                  provide falseinformation to any other associate or third party knowing that the informationwill be (or is likely to be) provided to the government;

·                  engage in anyscheme to defraud any customer, vendor, supplier or government agency; or

·                  wrongfullywithhold or convert the property of others.

 

**THEFT OR MISUSE OF COMPANYPROPERTY**

 

All Company assets should beused for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company’sprofitability, and thus, associates are asked to use all assets efficiently andto conserve resources whenever possible. In support of these objectives, associates are strictly prohibited fromthe following activities, which include but are not limited to:

 

·                  stealing ormisusing Company assets;

·                  misusingassociate discount privileges;

·                  submitting afalsified time sheet or expense report;

·                  providing anyproducts to any person or entity in violation of any Company policy;

·                  retaining anyuncustomary personal benefit from current or prospective 

 

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customers,vendors, suppliers, government agencies or other business contacts; and

·                  using theCompany’s proprietary information, trade secrets or other assets improperly orwithout proper authorization.

 

All violations or suspectedviolations must be reported immediately to Loss Prevention, an associate’ssupervisor, an NMG attorney, the Human Resources Department, the AssociateRelations Department, or to the Compliance Committee.  Reports may also be made anonymously throughEthicsPoint at www.ethicspoint.com or by calling 1-800-573-2022.  Strict disciplinary action, includingpossible termination, will be taken against any associate engaged in theft orabuse of Company assets and, as warranted, against any other responsible party.

 

**PROTECTINGCUSTOMER INFORMATION**

 

Neiman Marcus is committedto protecting the privacy of its customers, including clientele and accountinformation.  The Company considers suchcustomer information to be confidential and proprietary to the Company.  The Company expects all of our associatesentrusted with this customer information to treat such information with theutmost respect.  Protecting customerinformation (including clientele and account information) is the responsibilityof each associate that comes in contact with this information.  Certain customer charge account and personalinformation is protected by state and federal laws, as well as, our own datasecurity policies.  All such informationincluding clientele and account information is the property of the Company, anddoes not belong to an individual associate. Therefore, our associates are prohibited from keeping such informationon personal PDA’s or on any personal computer equipment.

 

We must ensure that adequatesteps are taken to safeguard this information.

 

Failure to protect suchcustomer information and to abide by the Company’s policies and procedures withregard to protecting customer information will lead to disciplinary action upto and including termination.

 

**WIRETAPPING, EAVESDROPPING ANDTAPE RECORDING**

 

Associates are prohibitedfrom surreptitiously monitoring or recording any communications without theprior written approval of the Legal Department. Any violation of this policy will result in disciplinary action, up toand including immediate termination or employment.

 

**RESPONDING TO INQUIRIES FROMTHIRD PARTIES**

 

All requests for informationby government representatives, the media, attorneys who do not represent theCompany, or by other third parties must be directed to managementpersonnel.  Unless specificallyauthorized by the Company, associates are not to respond to such inquiries,whether formally or informally.  Allinquiries regarding potential or on-going litigation must be directed to theLegal Department.

 

*REQUESTSFOR INSPECTIONS OF PREMISES*

Government agencies andbuilding code enforcement officials may periodically 

 

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conduct routine inspectionsof the Company premises.  The manager ofthe facility should be prepared to handle such inspections by asking thevisitor for proper credentials and a valid explanation for the basis of theirinspection.  If the inspection isunannounced, unplanned, or otherwise unwarranted, the visitor should be told towait and that Company policy requires an associate to contact the LegalDepartment before any inspection can be authorized or commenced.

 

*CONTACTSWITH THE MEDIA AND THE FINANCIAL COMMUNITY*

Associates are prohibitedfrom commenting or providing financial information to anyone outside theCompany without the prior approval of the Chief Executive Officer, ChiefFinancial Officer, Controller, Treasurer, or the General Counsel.

 

Public responses and pressreleases are to be provided solely through the Corporate Communications, InvestorRelations, or Public Relations departments.

 

**ADVERTISING**

 

Federal and state laws andregulations prohibit false, misleading or deceptive advertising in thepromotion and sale of products offered or sold by the Company.  Associates are therefore prohibited fromcreating, approving or disseminating any advertising or promotional materialsthat potentially violate any applicable laws and regulations.  All advertising must be fair, accurate andproperly substantiated and any proposed publications must be pre-approved bythe Legal Department before being released to print.

 

**RECORD KEEPING**

 

It is the Company’s policyto prepare, maintain and adequately safeguard all Company records in accordancewith all applicable legal and accounting requirements.

 

*PREPARATIONOF RECORDS*

All books, records, andaccounts must accurately and fairly reflect all transactions, disposition ofassets and liabilities, and other events that are subject to specific regulatoryrecord keeping requirements.  Under nocircumstances may there be any unrecorded funds or assets of the Company or anyinaccurate entries knowingly made on the Company’s books or records.  No associate may interfere with or seek toimproperly influence the auditing of the Company’s financial records.

 

*RETENTIONOF RECORDS*

Associates must comply withthe Company’s record retention policy. In some instances, the existence of pending or threatened litigation,investigations, or validly issued subpoenas may legally require that certainrecords be retained for longer than the Company’s normal record retentionschedule.  It is a violation of law toconceal, alter or destroy such records.

 

**E-MAIL, PHONE CALLS, VOICEMAILAND THE INTERNET**

 

Although the use ofelectronic mail, voicemail, and the Internet can be very efficient andeffective, associates must ensure that all such methods of communication areused appropriately and in moderation without interfering or compromising theirwork.

 

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*APPROPRIATEUSE*

E-mail, phone calls,voicemail and the Internet must be used responsibly and are intended forbusiness purposes only.  Under nocircumstances may e-mail, phone calls, voicemail or the Internet be used forany illegal, immoral, or unethical purpose, or for any communication of anobscene, discriminatory, harassing or otherwise inappropriate nature thatpotentially harms the Company’s reputation, or the reputation of itsassociates.  The Company retains the soleright and discretion to determine whether or not associates are using thesemethods of communication properly.

 

Associates must not postconfidential, proprietary, inappropriate or sensitive Company information onthe Internet.  This prohibition includes theposting or transmission of any identifiable information about the Company orits associates, and includes locations such as websites, newsrooms, chat rooms,blogs, and other similar locations. Associates are further prohibited from developing or establishingwebsites or web pages using the Company’s name, images, or trademarkswithout proper authorization from the Legal Department.

 

*NOEXPECTATION OF PRIVACY*

All of the data, documentsand messages transmitted or stored on or through Company equipment is deemedCompany property.  Accordingly, theCompany reserves the right to control and review all data created, transmitted,received or maintained thereon. Associates shall have no expectation of privacy in the use of e-mail,telephone, voicemail, computer, or the Internet when using Company equipmentand/or resources.

 

In order to promote thesafety of employees and company visitors, as well as the security of itsfacilities, NMG may conduct video surveillance of any portion of its premisesat any time, the only exception being private areas of restrooms and dressingrooms. Video cameras will be positioned in appropriate places within and aroundCompany facilities and used in order to help promote the safety and security ofpeople and property.  By remainingemployed with the Company, associates give their consent to such videosurveillance at any time the Company may elect.

 

*CREATIONAND RETENTION OF MESSAGES*

Because e-mail and voicemailmessages are not private and may be subject to interception by third parties,it is critical to compose them as carefully and professionally as one wouldwith any formal written communication.

 

SensitiveInformation should not be sent by e-mail outside of the NMG internal e-mailsystem.  If business requirements dictatethat Sensitive Information must be exchanged, and no other exchange method isreasonably possible, this Information must be encrypted according to ISDepartment Standards.  Payment cardprimary account numbers must always be encrypted according to IS DepartmentStandards if they are sent by e-mail, whether internal or external to the NMGe-mail system.

 

It is critical to retainmessages only as long as necessary. Generally, voicemail messages should be deleted immediately afterlistening to them, and e-mail messages should be deleted within 120 daysfollowing delivery or receipt.  Recordsthat need to be maintained for longer than 120 days should be saved in a formatother than e-mail and maintained in accordance with the Company’s recordretention policy.  E-mail over 120 daysold will be automatically deleted. Advance notice will be communicated through Lotus Notes prior toautomatic deletion.

 

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** **

**CONFLICTS OF INTEREST**

 

The Company relies on theobjectivity, integrity and undivided loyalty of its associates in performingtheir duties.  Associates are expectedand have a duty to avoid any situation in which their personal interestsconflict, or have the appearance of conflicting, with those of theCompany.  By way of example only, aconflict of interest exists in the following situations: (1) when anassociate engages in an activity that detracts from or interferes with theassociate’s objectivity, effectiveness, duty of loyalty, or timely performanceof duties or services; (2) when an associate or a member of his or herfamily has a financial or other interest which might influence the associate’sjudgment while acting on behalf of the Company; or (3) when an associateor a member of his or her family purchases goods or services from a supplier ofthe Company at less than retail price (other than the normal discount availableto all associates of the Company or to the general public).  In addition, an associate has a conflict ifhe or she, or a member of his or her family, may benefit from the associate’sposition at the Company’s expense.  TheCompany uses the phrase “member of the associate’s family” broadly to include,without limitation, a spouse, domestic partner, child, spouse or domesticpartner of a child, parent, in-law, sibling, dependent, aunt, uncle, or anyadult supported by the associate or sharing the associate’s residence.

 

In general, associates shallnot:

 

·                  compete withthe Company;

·                  own or have anownership interest in any vendor, distributor, supplier, customer, orcompetitor of the Company;

·                  be employed by,consult, serve as a director, volunteer or otherwise render services to anyvendor, distributor, supplier, customer, or competitor of the Company;

·                  be a creditorof any vendor, distributor, supplier, customer, or competitor of the Company;

·                  use Companyproperty, information, or position for personal gain;

·                  take advantageof opportunities learned or made available through one’s position with theCompany or through the use of Company information;

·                  obtainconfidential information for one’s personal benefit from any vendor,distributor, supplier, customer, or competitor of the Company;

·                  employ a relativewhere the associate directly supervises, has audit or approval function, ordirectly or indirectly influences the status of such relative; or

·                  accept any giftor entertainment from a vendor, distributor, supplier, customer, or competitorof the Company, except as permitted in this policy.

 

Associates are required todisclose all actual or potential conflicts of interest to theirsupervisor.  Loans and/or guarantees forany financial obligations granted to any associate, including but not limitedto officers and directors are of special concern and must be disclosed to andapproved by the Company’s Board of Directors. It is not a conflict for associates to own insubstantial amounts ofstock in publicly held companies with whom the Company does business orcompetes, or to accept non-cash gifts and/or entertainment in the situationsdescribed below.

 

*GIFTS*

Associates are prohibitedfrom soliciting gifts, gratuities, favors, or any other personal 

 

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benefits of any kind fromcurrent or prospective vendors, suppliers, customers, or other thirdparties.  Gifts include, but are notlimited to, cash, merchandise, services, or any other thing of value that isnot available to all associates on an equal basis.  Associates are generally discouraged fromaccepting unsolicited gifts, and are specifically prohibited from acceptinggifts of money or gifts in any other form which would induce or obligate themto give special consideration to the person or company making the gift.

 

During any calendar year,associates may, as a limited exception, accept unsolicited, non-monetary giftsthat: (1) are items of nominal intrinsic value (i.e. $150.00 or less inaggregate retail value); or (2) are product samples, clearly marked withcompany or brand names, and distributed to a large group of associates on anequal basis.  Associates are prohibitedfrom returning conclave or vendor gifts for cash or credit.  Associates are also prohibited from sellingor bartering gifts received from vendors. Any gift having more than nominal intrinsic value must be reported tothe Human Resources Department to determine whether it can be accepted.  Whether or not the gift is accepted,associates should tactfully discourage the person or company giving the giftfrom giving similar gifts in the future.

 

The Company does permitvendors to provide reasonable amounts of free merchandise or “gratis”merchandise to associates in our stores, subject to the General Manager’sapproval.  “Gratis” is for the solepurpose of helping our store associates promote the products the Company sellsand to better serve all customers.

 

*ENTERTAINMENT*

Associates are prohibitedfrom encouraging or soliciting entertainment from any current or prospectivevendor, government agency, supplier, or customer.  Entertainment includes, but is not limitedto, activities such as dinner parties, theater parties and sportingevents.  From time-to-time, associatesmay accept unsolicited entertainment, but only under the following conditions:

 

·                  theentertainment occurs infrequently;

·                  theentertainment arises out of the ordinary course of business;

·                  theentertainment involves reasonable, not lavish, expenditures (e.g., the amountsinvolved should be amounts that associates are normally accustomed to spendingfor their own business or personal entertainment);

·                  theentertainment takes place in settings that are reasonable, appropriate andfitting for associates, their hosts and the business at hand; and

·                  associates arenot tempted to give and do not feel obligated to give any special considerationto the individual or company providing the entertainment.

 

An associate who becomesinvolved in a situation that creates a conflict of interest, or the appearanceof one, should notify his or her supervisor and seek guidance from either theirsupervisor, an NMG attorney, the Human Resources Department, the AssociateRelations Department, or the Compliance Committee.  The Company reserves the right, in its solediscretion, to take all necessary actions to eliminate any conflicts ofinterest or to grant exceptions to the policy.

 

**SUBSTANCE ABUSE AND DRUG TESTINGPOLICY**

 

It is the Company’sintention to provide a safe and productive work environment for all associates.

 

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Associates are prohibitedfrom using, possessing, selling, distributing, purchasing or being under theinfluence of illegal narcotics or other controlled substances at any time whileon Company property or on Company business. Exceptions may be granted where use or possession is pursuant to acurrent valid prescription issued in the associate’s name by a health careprofessional.  Under such circumstances,the Company reserves the right to evaluate the need or availability ofreasonable accommodations, and to assess an associate’s ability to performessential job functions in a safe and acceptable manner.

 

Any associate who isarrested or charged by legal authorities for improper use, possession, ordealing in narcotics or other controlled substances may be suspended fromemployment without pay pending disposition of such matters.  Any associate convicted of improper use,possession or dealing in narcotics or other controlled substances may bedischarged immediately.  Off the jobillegal drug use may subject an associate to disciplinary action if such usecould adversely affect job performance or affect the safety of other associatesor the public.

 

In addition, theunauthorized use or being under the influence of alcohol while on the job may warrantdisciplinary action up to and including immediate termination ofemployment.  An associate whose jobrequires the operation of a motor vehicle and who is convicted for drivingunder the influence of alcohol may be relieved of such duties.

 

The Company encouragesassociates who may have a problem with drugs and/or alcohol to use the EmployeeAssistance Program at 1-800-445-8988. Additional information about this program is available from the HumanResources Department.

 

An associate whose jobperformance or behavior indicates that he or she may be unfit for duty will notbe permitted to work.  If allowed underapplicable state laws, the Company may require the associate to take anappropriate drug and/or alcohol test as a condition of continued employment ifthe Company has reasonable suspicion that the associate is under the influenceof alcohol or drugs.  If use of drugs oralcohol is substantiated, disciplinary action may be imposed.  Refusal to consent to such tests will forcethe Company to determine, in its sole discretion, the appropriate disciplinaryaction based on all available information.

 

**ENVIRONMENTAL COMPLIANCE**

 

Associates must abide by allapplicable environmental laws and regulations, and must not authorize, direct, orcondone any violation of such laws or regulations.  Associates also must not knowingly provideany false information on any governmental environmental form, monitoringreport, or in response to any request for environmental information from anygovernmental agency.

 

**IMPLEMENTATION OF THE CODE**

 

**THE COMPLIANCE COMMITTEE**

 

The Company has created aCompliance Committee to ensure continuing attention to matters of ethics andbusiness conduct.  The Company’s GeneralCounsel is the 

 

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Chairman of the ComplianceCommittee, with ultimate responsibility of overseeing compliance with allapplicable laws and with the Code.

 

**DISSEMINATION OF INFORMATION**

 

The Code summarizes certainkey laws, policies and ethical principles which aid associates in identifyingand preventing possible problems.  TheCompany recognizes that the materials contained in the Code and those distributedto supplement the Code cannot possibly anticipate all potential problems thatmay be encountered.  To a significantextent, the Company must rely upon each individual associate to act withintegrity, to use his or her best judgment, and to seek guidance when necessaryin any given situation.

 

All associates will receivea copy of the Code and are required to sign a Certification.  The Certification represents that anassociate has received and reviewed the Code and understands the obligation tocomply with all of its requirements.  It isimperative that all associates read and thoroughly understand eachprovision.  Associates will be asked tore-certify their understanding and compliance on an annual basis.  Signed Certifications will be inserted intoan associate’s personnel file.

 

The Company retains theright to update, amend, or modify the Code at any time without priornotice.  Associates will be bound by suchchanges.  The Company may alsoperiodically distribute additional guidelines regarding compliance withindividual policies.

 

**TRAINING AND EDUCATION**

 

The Compliance Committeeoversees and coordinates the training of designated associates regarding theCode and its related policies.  The LegalDepartment may conduct periodic compliance meetings and distribute guidelinesto further educate associates regarding the Code’s content.

 

**DISCIPLINE FOR VIOLATIONS**

 

Associates are obligated tocomply with all requirements set forth in the Code.  In enforcing these requirements, the Companywill undertake all necessary actions based upon the facts and circumstances ofeach situation.  The Code providesadditional disciplinary guidelines for the following situations:

 

·                  associates whoauthorize, condone or participate in actions that violate the law or the Code;

·                  associates whoattempt or encourage others to retaliate, directly or indirectly, againstindividuals who report violations or potential violations of the law and/or theCode;

·                  associates whofail to report a violation of the law and/or the Code, or who withhold relevantand material information concerning a violation of which they are aware orshould be aware; and

·                  associates whosubmit reports of violations or suspected violations which are knowingly false,made in bad faith, or submitted with a reckless disregard for the truth oraccuracy of the alleged violations.

 

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To the extent that thecircumstances of the violation reflect inadequate supervision or lack ofdiligence by the supervisor(s), discriminatory action can also be taken by thesupervisor.  Disciplinary action underthese circumstances may result in termination of employment.

 

**INVESTIGATING AND RESPONDING TOALLEGATIONS OF VIOLATIONS**

 

All reported violations ofthe law and/or the Code will be investigated promptly and will be treated withas much confidentiality as reasonably possible. The Compliance Committee has a duty to coordinate all investigations andconfer with Company management regarding any recommended course of action.

 

Associates are required tocooperate in all investigations.  It isimperative, however, that associates refrain from conducting investigations ontheir own without first obtaining approval from the Compliance Committee or atthe direction of the Legal Department. Investigations may raise complicated legal issues, and could result inadverse consequences.

 

**RETENTION OF OUTSIDE LEGALCOUNSEL**

 

Periodically, the Companywill retain outside counsel to provide advice regarding legal compliance,assist in conducting internal investigations, or represent the Company inlitigation or governmental investigations.** **The Legal Department retains thesole and exclusive authority to select, hire and supervise outside counsel whenseeking representation or advice for the Company on any subject.

 

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