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I Am Ethical

Your knowledge of applicable laws and regulations regarding antitrust, import and export controls, and foreign boycotts should be thorough and complete when your job involves such activities. Your decisions must be ethical as well as legal.

You may not use anything you learn in confidence about Popeyes® Louisiana Kitchen, Inc. (PLKI) for personal financial gain in the stock market or elsewhere.

Be certain that you conform to the Securities and Exchange Commission (opens in new window) (SEC) communications laws and regulations when you are in possession of material, non-public information or when you are reporting public financial information. In the following section, you will see lots of references to licensure, re-exports, embargoed countries, import controls and various aspects related to legal and government regulations. Should you need further information or clarification, please contact the Office of General Counsel.

The U.S. antitrust laws are among the most significant laws governing business. Their goal is to maximize consumer welfare by encouraging ample supply and competitive pricing. They impact our relationships with competitors, franchisees, consumers, suppliers and vendors.

Policy: We comply with all antitrust laws and regulations.

Penalties: Violations of antitrust laws are very serious matters. In addition to PLKI liability, there is criminal and personal liability for such violations, including prison time and very substantial fines as well as treble damages, for employees involved in a violation.

A. Competitors

Virtually any agreement between competitors—stated, implied or assumed—relating to prices, excluding other companies, or dividing markets or customers is unlawful. Discussions between competitors, however innocent or public the information, may later be cited as evidence of collusion.

Policy: Employees who come in contact with employees or agents of other restaurant companies should never discuss:

  • Current or future prices, whether for products, services or intellectual property
  • Marketing or promotional programs
  • Development plans
  • New products
  • Any other matter involving competition of any kind

For example: Discussing the success of a $3.99 combo promotion with a competitor, followed by the competitor’s adoption of the same promotion, could be evidence of price-fixing. The less specific the discussions, the less likely that antitrust issues will arise.

B. Franchisees

Our Franchise Agreement governs most aspects of our relationships with our franchisees.

Policy: PLKI employees who interact with franchisees should know and comply with the PLKI Franchise Agreement and applicable laws and company policies.

Note: Special considerations may apply in situations where PLKI operates restaurants in close proximity to franchisees. Although our principal competition is other restaurant chains (i.e., interbrand competition), antitrust laws may apply to competition between PLKI restaurants in these instances (i.e., intrabrand competition).

For example: An PLKI-owned restaurant may not use its economic power to force a franchised restaurant in the same market out of business by price-cutting or other predatory conduct.

C. Consumers

PLKI employees should strive to give consumers the best possible deal through rigorous competition.

Policy: PLKI employees should avoid any agreement with any outside person or entity other than PLKI that has the effect of limiting competition.

D. Suppliers/Vendors

While adhering to antitrust laws, PLKI needs to purchase goods and supplies at terms as favorable as possible and by all means should negotiate for the best possible price.

Policy: PLKI will not charge different prices for the same product to similarly situated buyers or knowingly induce a seller to sell at a discriminatory price.

As a result: PLKI employees should:

  • Seek a special purchase price only when there are efficiencies or other benefits to the seller such as volume purchases, long-term commitments, prompt payment terms or credit risk considerations; and
  • Avoid price discrimination and other antitrust concerns such as “tying” (illegally conditioning the sale of one product on the purchase of another product) when selling, especially where PLKI is the sole supplier.

Note: PLKI employees should make certain there is a valid justification for limiting the source of products sold to franchisees. Such valid justifications include ensuring the secrecy of a proprietary recipe, maintaining the quality of a proprietary product (e.g., POPEYES® spice mix) and the absence of acceptable alternative supplies.

The United States laws and regulations on the export of goods, services and technology are principally based on two factors: the nature of each export and its destination and end use.

Policy:
  • PLKI adheres to all relevant export and re-export laws and regulations.
  • PLKI contracts for foreign sales must include language to indicate our customers’ acknowledgment of their obligations to honor applicable U.S. export and re-export laws.

Some items may be exported from the United States only after applying for and receiving a license from one or more government agencies. Deciding whether an export requires a license requires reference to a fairly comprehensive list of product categories maintained by the Department of Commerce(opens in new window) (DOC).

Policy: PLKI complies with all federal, state and local regulations, promotes energy and natural resource conservation, and requires responsible environmental practices from all employees.

As a result: Employees must ascertain whether each PLKI export requires a license by referring to the DOC and, when necessary, submitting the appropriate DOC license application which is available from the DOC Bureau of Export Administration(opens in new window). For support with this process, please contact the Office of the General Counsel.

Goods or technology of United States origin are subject to U.S. re-export controls. An item, for example, exported from the United States to Germany may not require a license, but its onward shipment from Germany to Indonesia might require prior DOC authorization. Although it is basically the responsibility of the foreign recipient to obtain the re-export authorization, PLKI could be held liable in some instances for illegal re-exports.

As a result: Employees must determine whether re-exports require prior DOC authorization and notify our customers, suppliers and distributors of such requirements.

The Treasury Department’s Office of Foreign Assets Control (opens in new window) (OFAC) maintains a list of embargoed countries, including lists of companies established in non-embargoed countries that are deemed to be under the control of embargoed governments, and administers United States embargo and sanction regulations.

As a result: Employees must comply with all current United States embargoes or comprehensive economic sanctions programs by referring to the OFAC.

Penalties

Violation can result in severe criminal and civil penalties, including imprisonment, for PLKI and the employees involved.

All shipments into the United States are subject to U.S. Customs Service import requirements. As an importer, PLKI uses “reasonable care” in providing information to Customs, such as entry documentation, regarding the declared value and classification of our merchandise. The Customs website (opens in new window) and regulations (19 C.F.R. Parts 1 to 192) provide guidance on how to comply with these obligations and determine the proper value and classification of goods.

Policy:
  • We adhere to all relevant Customs, FDA and EPA laws and regulations in the valuation and classification of imported goods.
  • We retain import records for five years.
Penalties: Customs may assess civil and/or criminal penalties and has the authority to seize and impose a forfeiture of imported merchandise. Consequently, PLKI compliance is critical.

A. Duty Rates

Import duty rates depend on several factors, including value, classification and country of origin.

As a result: Employees must:

  • Route any classification ruling request through the Office of General Counsel
  • Determine the conditions of sale that must be included or excluded from the reported value of merchandise in order to calculate an accurate ad valorem duty rate
  • Consult the Harmonized Tariff Schedule of the United States in order to classify imports properly to calculate accurate tariffs
  • Determine countries of origin and their impact on the duty rate for all imports

B. Product Markings

Every article of foreign origin, or its container, imported into the United States must be conspicuously marked with the English name of the country of origin of the article, except for:

  • Articles incapable of being marked
  • Articles that cannot be marked except at an economically prohibitive expense
  • Articles for which the marking of the containers will reasonably indicate the country of origin

As a result: Even where articles are excepted from the marking requirement, the outermost container or holder must be marked with the country of origin unless it also meets an exception. The Customs Regulations provide guidance on marking requirements at 19 C.F.R. Part 134.

Foreign countries or groups of countries may, from time to time, refuse to do business with other countries (or their companies or citizens). United States companies may not support or participate in such “boycotts” unless the U.S. government also approves. Thus, the United States supports the United Nations sanctions against Iraq, but is opposed to the Arab League boycott against Israel. United States anti-boycott laws and regulations enforce U.S. companies’ nonparticipation in unapproved boycotts.

United States anti-boycott laws and regulations apply to all individuals and companies located in the U.S. and their foreign affiliates, and govern the sale, purchase or transfer of goods or services within the U.S. or between the U.S. and a foreign country.

Policy: We comply with all U.S. anti-boycott laws and regulations.

As a result: Employees acting on behalf of PLKI may not, contrary to United States law:

  • Refuse to do business with countries subject to a foreign-imposed boycott (i.e. Israel) or with blacklisted companies (i.e. non-Israeli companies with which Arab league entities refuse to do business)
  • Discriminate against other persons based on race, religion, sex, national origin or nationality
  • Furnish information about the race, religion, sex or national origin of another person

In addition: Employees acting on behalf of PLKI:

  • May not participate in any economic or other boycott contrary to U.S. anti-boycott laws and regulations
  • Must report any such request to the Office of General Counsel
  • Must report any agreements, letters of credit, shipping instructions or other business documents that contain requests for information related to race, religion, national origin or other suspect factors to the Office of General Counsel.

Penalties

Violating U.S. anti-boycott laws may result in civil and criminal fines, imprisonment and denial of export privileges.

Insider trading involves the purchase or sale of PLKI securities while in possession of material nonpublic information (“inside information”) about the Company. It also involves disclosing or “tipping” inside information about PLKI to others who purchase or sell PLKI securities. These activities violate PLKI policy as well as federal securities law.

The possession of material nonpublic information requires significant legal and ethical responsibilities not to profit from it and not to allow others to do so. Material information is that which would probably affect any investor’s decision to buy, sell or hold securities, or would affect the market value of the securities if publicly disclosed.

Examples of material information include:

  • Dividend increases or decreases
  • Earnings estimates or results, or a change in announced estimates
  • Significant increase or decline in business or operations activities
  • Stock splits or dividends
  • Mergers or acquisitions
  • Agreements to purchase or sell substantial assets
  • Significant new products, services or discoveries
  • Unusual or large borrowing
  • Offerings or proposals to offer debt or stock securities for sale
  • Commencement or settlement of a major claim or lawsuit
  • Liquidity problems
  • Significant management developments
Policy:
  • The purchase or sale of PLKI securities while in possession of inside information about PLKI is prohibited.
  • Tipping inside information about PLKI to others who purchase or sell PLKI securities is prohibited.

As a result: PLKI directors, officers and employees with inside information may not:

  • Buy or sell PLKI securities through any channel
  • Buy or sell PLKI common stock through any channel, including stock savings plans
  • Provide that information to another person to enable that person to buy or sell PLKI securities or to advise others to do so

In addition: PLKI directors, officers and employees with inside information about another company may not:

  • Buy or sell securities in that company if the inside information was obtained as a result of their employment with PLKI
  • Disclose that inside information to another person, to enable that person to buy or sell PLKI securities, or to advise others to do so

For example: Illegal insider trading can occur when a director, officer or employee of PLKI:

  • Buys or sells PLKI’s debt or stock securities while in possession of material nonpublic information concerning PLKI, regardless of how the transaction is arranged, or discloses that information to another to do so
  • Buys or sells stock securities of another company while in possession of inside information about that company obtained as a result of employment with PLKI or discloses that information to another to do so

Penalties

Penalties can include both civil penalties of up to three times the profit gained or loss avoided, injunctions and forfeiture of profits; and/or criminal penalties up to $1 million and/or 10 years in prison for each violation. PLKI and its officers, directors and managers may also be subject to monetary civil and criminal penalties for employees’ insider trading violations.

PLKI has publicly traded common stock that requires us to make regular and timely filings to the Securities and Exchange Commission (opens in new window) (SEC).

Policy: We comply with all SEC rules of disclosure and communications for formal requirements and for material information, including the posting of PLKI information on any of our websites.

As a result: PLKI public communications employees and Senior Financial Officers (as defined in the Sarbanes-Oxley Requirements section of the Honor Code) should:

  • Determine if information is material, meaning if there is substantial likelihood that an investor would consider it important in making a decision to purchase or sell PLKI securities
  • Make timely disclosures of material information
  • Create periodic financial communications and reports (including reports to be filed with, or submitted to, the SEC) that are full, fair, accurate, timely and that are understandable so that readers and users will quickly and accurately determine their meaning and significance
  • Ascertain that material posted to the website is free from misstatements and omissions and is treated in the same manner as press releases and other written communications
  • Ensure that all materials posted to the website are accompanied by date of publication and a disclaimer stating that PLKI is not responsible for inaccuracies that result from events occurring after the date the information was posted
  • Determine the propriety of hyperlinks, which may be posted only when they will not cause any third-party information to be attributed to PLKI or deemed to have been adopted by PLKI

Penalties

Possible consequences of failing to comply with disclosure standards include civil liability, criminal penalties, suspension of stock trading, injunctive remedies and disgorgement of any consequent profits.

For purposes of section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder, this Honor Code shall be our code of ethics for the Chief Executive Officer, the Chief Financial Officer and Chief Accounting Officer or other persons performing equivalent functions (collectively, the “Senior Financial Officers”). Because the equity shares of PLKI are publicly traded, Senior Financial Officers are held to an especially high set of ethical standards.

A. Whistleblower Protection

REPORTING OF CONCERNS REGARDING ACCOUNTING, INTERNAL ACCOUNTING CONTROLS AND AUDITING MATTERS

In addition to an employee’s responsibility to report Honor Code concerns, all employees are required to report, or cause to be reported, information and should assist in any investigation by any regulatory or law enforcement agency, elected officials or others responsible for such matters concerning the following matters:

  • Wire fraud, mail fraud, bank fraud, securities fraud, any violation of any SEC rule or regulation or any federal rules relating to fraud against shareholders
  • Questionable accounting, internal controls and auditing matters
  • Conduct that is not honest and ethical, conflicts of interest and disclosures that are not full, fair, accurate, timely and understandable

The Audit Committee of the Board of Directors adopted a Whistleblower Policy effective July 17, 2003, on the reporting of concerns regarding accounting, internal accounting controls and auditing matters. This policy is designed to provide a channel of communication for employees and others who have concerns about the conduct of PLKI or any of its people, including with respect to PLKI’s accounting, internal accounting controls or auditing matters. The policy provides in pertinent part that PLKI will not tolerate any discrimination, harassment of or retaliation against a PLKI employee who in good faith reports an actual or suspected violation of the policies and laws discussed in this Honor Code or files, causes to be filed, testifies, participates in or otherwise assists in a proceeding filed or about to be filed regarding any matter discussed in the preceding paragraph regarding the reporting of concerns relating to accounting, internal accounting controls or auditing matters.

Pursuant to section 301 of the Sarbanes-Oxley Act of 2002, such concerns may be communicated directly to the Audit Committee of the Board of Directors c/o: Office of the General Counsel or in the same way as any other Honor Code concern as discussed in the preceding section entitled Reporting of Honor Code Concerns, including communicating in a confidential or anonymous manner to the PLKI Honor Code Line at 1.800.245.1491, at any time, sending a letter setting forth your questions or concerns to PLKI’s Chief Compliance Officer at 400 Perimeter Center Terrace, Suite 1000, Atlanta, GA 30346. Those concerns regarding accounting, internal accounting controls and other auditing matters will be reported to the Board’s Audit Committee.

B. Waivers of the Honor Code

From time to time, PLKI may waive certain provisions of the Honor Code. Waivers for executive officers (including Senior Financial Officers) may be made only by the Board of Directors or a committee of the Board and will be appropriately disclosed. Any other employee or officer who believes that a waiver may be appropriate should discuss the matter with the Chief Compliance Officer.

Disciplinary Actions

The matters covered in the Honor Code are of the utmost importance to PLKI, its shareholders and its business partners, and are essential to PLKI’s ability to conduct its business in accordance with its core values. PLKI will take appropriate action against any officer, employee, agent, consultant, vendor or franchisee whose actions are found to violate these policies or any other policies of PLKI. Disciplinary actions may include immediate termination of employment or business relationship at PLKI’s sole discretion. Where PLKI has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, PLKI will cooperate fully with the appropriate authorities.