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Investor Relations :: Audit Committee Charter
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LA JOLLA PHARMACEUTICAL COMPANY
CODE OF CONDUCT
Ethical behavior and proper business conduct are important to La Jolla Pharmaceutical Company and our directors, officers and employees. As a valued member of the Company, you are expected to conduct yourself in an ethical, professional and reliable manner. Each of us is responsible for ensuring that LJPC remains a place at which we can be proud to work.
We have an open door policy and encourage members of our organization to share their concerns with, seek information from, provide input to, and resolve problems or issues through their supervisor, our Ethics Manager (at the present time, Gail Sloan) and/or, as appropriate, the Audit Committee of the Board of Directors. If you are ever unsure of the appropriate action, I encourage you to take advantage of our open door policy and to raise your concerns. In order to ensure that you are comfortable raising an issue, we have created procedures that enable you to confidentially raise workplace concerns. Your concerns will be brought to the attention of responsible parties within our organization, including, when appropriate, the Audit Committee of the Board of Directors. By adhering to the letter and spirit of this Code of Conduct we can continue our commitment to foster an atmosphere of self-awareness and prudent conduct and to operate our business in a highly professional and ethical manner.
Deirdre Y. Gillespie, M.D.
President and Chief Executive Officer
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I. POLICIES
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COVERAGE |
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This Code of Conduct (this "Code") applies to all employees, officers and directors of La Jolla Pharmaceutical Company (sometimes referred to herein as the "Company" or "LJPC") and, for employees and officers, should be read in conjunction with the policies contained in the Company’s employee handbook. |
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QUALITY |
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You should approach all job tasks with a commitment to high quality results. You are encouraged to conduct yourself in a manner that leads to a high quality work environment, including open, positive and productive relations with co-workers, visitors and business contacts. |
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BUSINESS CONDUCT |
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You should treat individuals fairly and display good judgment and high ethical standards in your business dealings. You must conduct all your business affairs with honesty, fairness and integrity. Each employee, officer and director should endeavor to deal fairly with the Company's employees and business contacts. You should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.
You should treat all business contacts with dignity and respect. The Company does not permit and will not tolerate any conduct that creates an intimidating or offensive work environment. If you believe that you have been subject to conduct that is in violation of this Code, report it to your supervisor or the Ethics Manager. All complaints will be investigated promptly and without retaliation. |
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COMPLIANCE WITH THE LAW |
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You are required to obey all governmental laws, rules and regulations applicable to your conduct of the Company's business. In this regard, it is your responsibility to become familiar with the rules, regulations and laws that may apply to your business dealings. Merely complying with the law, however, should not comprise the limits of your ethical behavior. Rather, this requirement is the minimum, essential part of your ethical responsibility. |
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CONFLICTS OF INTEREST |
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Employees are expected to make or participate in business decisions and actions in the course of their employment with LJPC based on the best interests of the Company, and not based on personal relationships or benefits. Employees are expected to apply sound judgment to avoid conflicts of interest that could negatively affect LJPC or its business, including any action that could be perceived as a conflict of interest. A conflict of interest is any activity that is inconsistent with or opposed to the Company's interests. A conflict of interest would likely arise if an employee is simultaneously employed or engaged by the Company and another business concern, particularly a Company client or business partner.
Members of our Board of Directors have a particular responsibility in this regard because our directors are prominent individuals with substantial other responsibilities. To avoid conflicts of interest, directors are expected to disclose to their fellow directors any personal interest they may have in a transaction upon which the Board of Directors passes and to recuse themselves from participating in any decision in which there is a conflict between their personal interests and the interests of the Company.
Because it is not possible to list all conflicts of interest, our employees, officers and directors must be ever vigilant about conflicts of interest. Ultimately, it is the responsibility of each individual to avoid any situation that presents a conflict of interest. Employees are expected to discuss all conflicts of interest – actual, potential and perceived – with our Ethics Manager. |
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CONFIDENTIAL INFORMATION |
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Do not use any confidential Company information for your own personal gain. You cannot disclose confidential information about the Company to unauthorized people or use the information to purchase or sell securities of the Company. All information concerning LJPC's clinical trials, drug development efforts, financial condition and results, and other activities must remain confidential until such information is fully and properly disclosed to the public.
In general, confidential information includes industry or trade secrets and technical procedures and policies, financial and business information concerning equipment, new developments, future plans, daily policy and procedural matters, litigation, human resources data, financial results or projected results, earnings, and other matters. This information may be in the form of letters, drawings, plans, notes, memos, records, computer printouts, and it may or may not be marked "confidential." Confidential information is not always in writing, and may instead be heard in a meeting, passed on in a conversation or overheard while being discussed by other employees. Confidential information concerns past, present and future research, operations, plans or projections.
Every employee has an individual responsibility to safeguard confidential information that he or she has obtained in connection with his or her employment. You must not use confidential information in a way that is not related to the Company's business activities during or after your employment. Confidential information should be disclosed only to those who have a "need to know" such information in the performance of job assignments and responsibilities. Confidential information may not be given to any person who is not authorized to possess such information, including, without limitation, your spouse, your family members, competitors, suppliers, contractors, other employees or other business contacts.
When an employee's service with LJPC has ended, all documents and/or records in his or her possession that contains confidential information must be returned to the Company. The obligation to safeguard confidential information, however, continues even after you have returned such documents or records. Any confidential information learned while working for LJPC remains confidential until properly disclosed and is the property of LJPC. |
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CORPORATE OPPORTUNITIES |
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Do not take advantage of corporate opportunities for your own personal gain. Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises. Thus, all employees, officers and directors are prohibited from: (i) taking for themselves personally opportunities that are discovered through the use of corporate property, information or position; (ii) using corporate property, information or position for personal gain; and (iii) competing with the Company. |
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ETHICAL OBLIGATIONS REGARDING SEC REPORTS AND OTHER PUBLIC COMMUNICATIONS |
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As a public company, it is of critical importance that the LJPC's filings with the Securities and Exchange Commission be accurate and timely. Depending upon your position with the Company, you may be called upon to provide information to assure that the Company's public reports are accurate, complete, fair and understandable. LJPC expects all of its personnel to take this responsibility very seriously and to provide prompt and accurate information related to the Company's public disclosure requirements.
All of our employees and directors must strive to adhere to these principles and to cultivate a culture throughout the Company that promotes the fair and timely reporting of the financial results and condition of LJPC. In this regard, our employees, officers and directors are expected: |
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to act with honesty and integrity, and avoid actual or apparent conflicts of interest in personal and professional relationships; |
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to provide constituents with information that is accurate, complete, objective, relevant, timely and understandable in order to ensure full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or furnishes to, the Securities and Exchange Commission and other government agencies and in other public communications; |
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to comply with rules and regulations of federal, state and local governments and other private and public regulatory agencies as the same may be applicable the conduct of the Company's business and operations; |
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to act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing his or her independent judgment to be subordinated; |
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to respect the confidentiality of information acquired in the course of his or her work, except when authorized or otherwise legally obligated to disclose such information. Confidential information acquired in the course of his or her work should not be used for personal advantage; |
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to share knowledge and maintain skills important and relevant to his or her constituents' needs; |
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to proactively promote ethical behavior among peers in his or her work environment;
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to achieve responsible use of and control over all assets and resources of the Company employed by or entrusted with him or her; and
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to promptly report to your supervisor, the Ethics Manager or the Audit Committee any conduct that the individual believes to be a violation of law or business ethics or of any provision of this Code, including any transaction or relationship that reasonably could be expected to give rise to a conflict of interest, and any concern regarding the Company's accounting, auditing, or internal accounting controls and disclosure procedures. |
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COVERING UP MISTAKES; FALSIFYING RECORDS |
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Mistakes should never be covered up, and should be immediately fully disclosed and corrected. Falsification of any LJPC, client, or third party record is prohibited. |
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COMPANY RESOURCES AND PROPERTY |
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You are required to use Company resources and property for business purposes. All employees, officers and directors should seek to protect the Company's assets and ensure their efficient use. This includes safeguarding all physical equipment, property and records, as well as all passwords and identification codes to prevent unauthorized access to the Company's computerized data. Theft, carelessness and waste have a direct impact on the Company's ability to succeed.
Company resources, including, but not limited to, cash, personnel, equipment and supplies, should be used for legitimate Company business purposes. We provide employees with the use of Company-owned telephones, copiers and computer equipment in order to give our employees the tools necessary to effectively perform their jobs. Although reasonable personal use of these resources is permitted, such use is not private and may be reviewed and accessed by the Company. Furthermore, you are expected, when using such resources, to conduct yourself professionally and to comply with all of the terms and provisions of this Code. Additionally, voice and e-mail messages can be permanently recorded, forwarded or reproduced in hard copy. Accordingly, employees must exercise caution and discretion when leaving voice messages and sending e-mail messages because messages conveyed by these means may survive indefinitely. |
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SECURITIES TRADING |
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As you know, the employees, officers and directors of the Company are subject to the Company's Inside Information and Trading Policy, as it may be amended from time to time (the "Trading Policy"). You should refer to the Company's Trading Policy for the specific details regarding the Company's policies that apply when you propose to trade in Company securities.
The concepts discussed below should serve as a reminder regarding considerations that you must make when trading Company securities. However, as noted above, your specific obligations are set forth in the Trading Policy. |
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If you have information about LJPC that is material and non-public, you cannot legally trade in LJPC stock or recommend the purchase or sale of LJPC stock. Information should be regarded as "material" if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of LJPC's securities. In addition to material inside information about LJPC, you may become aware of similar confidential information about other companies such as suppliers, competitors or other business contacts which securities are publicly traded. In such a situation, you must handle the confidential information of the other Company according to the same rules that apply to material inside information about LJPC. |
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You may not disclose (or "tip") material non-public information to any other person (including family members) where this information may be used by that person to his or her benefit by trading in securities, nor shall any employee make recommendations or express opinions on the basis of material non-public information as to trading in LJPC's securities. Tipping material non-public information is illegal. |
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If you violate insider trading laws, you and the Company may be subject to serious civil and criminal penalties. These laws apply to all employees, officers, and directors. The Securities and Exchange Commission aggressively monitors and prosecutes insider trading violations even where high profile employees or significant profits are not involved. |
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AS SET FORTH IN THE TRADING POLICY, BEFORE YOU ENGAGE IN ANY TRANSACTION INVOLVING COMPANY SECURITIES, YOU MUST PRE-CLEAR SUCH TRANSACTION WITH THE COMPANY'S CHIEF EXECUTIVE OFFICER, VICE PRESIDENT OF FINANCE OR CONTROLLER. |
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GIFTS |
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Generally
Other than modest gifts given or received in the normal course of business (e.g., meals, beverages, shirts, hats and similar items), neither you nor your relatives may give gifts to, or receive gifts from, entities with which LJPC transacts business. If you propose to give or receive a gift that is not modest, you may do so only with prior approval of our Chief Executive Officer, our Ethics Manager, or the Chairman of the Audit Committee of the Board of Directors. In no event should you put LJPC or yourself in a position that would be embarrassing if the gift was disclosed to the public. If you have any questions about whether a gift is modest, you should contact your supervisor or our Ethics Manager.
Speaking at events or seminars, when it is determined to be in the Company's best interests, is considered part of certain employees' normal job responsibilities. Because employees will be compensated by LJPC for most or all of their time spent preparing for, attending and delivering presentations approved by management, employees should not request or negotiate a fee from the organization that requested or sponsored the presentation unless the employee first receives express authorization from our Chief Executive Officer.
Government
Dealing with government employees is often different than dealing with private sector employees. Many governmental bodies strictly prohibit the receipt of any gratuities by their employees, including meals and entertainment. Because rules regarding gifts and gratuities vary from jurisdiction to jurisdiction and from agency to agency, you should not offer a gift of any type to any public official unless you have determined beforehand that such a gift is appropriate and legal. It is your responsibility to be aware of and to strictly follow these regulations and prohibitions. Even if a gift is permitted by law and this Code, such gift should not compromise, or even appear to compromise, the official's integrity, and no gift should be given if such action could be construed as an attempt to influence a favorable governmental decision. Any payment or gift that is given or promised, directly or indirectly, to a foreign governmental official designed to influence that person’s acts or decisions is improper and could subject you and LJPC to substantial criminal liability for violation of the U.S. Foreign Corrupt Practices Act and similar foreign laws. |
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PAYMENTS TO GOVERNMENT OFFICIALS |
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You may not use Company funds for improper or illegal activities. You are not permitted to make payments to government officials to obtain favorable treatment. Any person who pays or receives bribes or kickbacks will be immediately terminated and reported, as warranted, to the appropriate authorities. A kickback or bribe includes any item intended to improperly obtain favorable governmental decisions or treatment. |
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POLITICAL CONTRIBUTIONS |
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Except with the prior approval of the Board of Directors, no person subject to this Code may contribute Company funds or resources to a political party, committee, organization, candidate or for any other political purpose. You may, of course, engage in political activity with your own resources on your own time. |
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MEDIA INQUIRIES |
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You may not make statements to the public on the Company's behalf without express authority from our Chief Executive Officer. All public statements concerning the Company must come only from authorized individuals, such as the Chief Executive Officer or the Vice President of Finance. Recognize that, as an employee of the Company, those outside of the Company may view you as "speaking for" the Company even if you are merely stating your own views. In addition, you should consider that statements made in electronic media, such as on internet chat boards, are "public statements," and, unless you are authorized, you should refrain from communicating information about the Company in this manner. Employees should recognize that it is perfectly satisfactory to tell reporters and others that a Company representative will return such person's call with the requested information, rather than trying to respond to inquiries immediately. You should refer any media inquiries to the Chief Executive Officer or the Vice President of Finance. |
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GOVERNMENT REQUESTS |
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It is the Company's policy to cooperate with requests from U.S. and foreign government agencies, such as the Federal Trade Commission, the Food and Drug Administration, the U.S. Department of Health and Human Services, the U.S. Department of Justice or any similar foreign government agency, concerning the Company's operations. At the same time, it is typically necessary to consult with the appropriate legal resources before responding to these requests. If you are not responsible for interacting with governmental agencies, you should forward any requests from national, state or municipal government agencies to your supervisor or our Ethics Manager and wait for instructions before proceeding. Likewise, you should notify your supervisor or our Ethics Manager if you become aware of any investigation of, or if you are asked to be interviewed about, the Company or its operations. In connection with any such investigation, you may not destroy or alter any documents in your custody or lie or make misleading statements to investigators. |
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COMPETITION LAW |
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LJPC must comply with all applicable fair competition and antitrust laws. These laws attempt to ensure that businesses compete fairly and honestly and prohibit conduct seeking to reduce or restrain competition. If you are uncertain whether a contemplated action raises unfair competition or antitrust issues, please contact the HR Head or our Ethics Manager. |
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USE OF THIRD PARTY INTELLECTUAL PROPERTY |
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Third party intellectual property may only be utilized by employees authorized to use it in accordance with terms of an LJPC license agreement. Such third party intellectual property may not be copied without specific authorization, and may only be used to perform assigned responsibilities. Any disclosure, copying, or other unauthorized use or misuse of third party intellectual property may expose the Company and the employee to civil or criminal penalties, including financial liability, and the employee to disciplinary action for violating this Code. |
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II. COMPLIANCE PROCEDURES
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THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS |
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This Code is administered by the Audit Committee of the Board of Directors. The Audit Committee, with the assistance of the management of the Company and the Ethics Manager, is ultimately responsible for distributing and periodically updating this Code, providing education to employees about their ethical responsibilities, ensuring that procedures are in place for reporting violations, monitoring and investigating suspected violations, and enforcing this Code. |
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SUPERVISORS |
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Supervisors have key roles in the compliance program for this Code and are expected to demonstrate their personal commitment to LJPC's standards of behavior and to manage employees accordingly. It is their responsibility to communicate to their respective groups that they must operate in accordance with the standards of business conduct outlined in this Code. Supervisors must also maintain a work environment that encourages open communication regarding ethical issues and concerns. |
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ADDRESSING CONCERNS OR QUESTIONS |
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One of the most important responsibilities that each of us has is the obligation to raise a concern about a possible violation of this Code or the law. It may be difficult for you to raise a concern, but it is important to remember the harm that not raising a concern can cause. The point of raising a concern is not to get a friend in trouble, but to protect a colleague and the Company as a whole from potential harm.
Every person subject to this Code must comply with the letter and spirit of this Code and with the policies and procedures of the Company. No matter how insignificant an issue may seem, you should challenge questionable behavior as soon as you see or suspect it is happening. As part of LJPC's open door policy, we want you to take questions that concern business conduct and ethics to your supervisor or our Ethics Manager. The overriding idea is to speak up and bring concerns into the open so that any problems can be resolved quickly and serious harm may be avoided. Be assured that any person who reports a suspected violation in good faith will not be subject to retaliation.
Our Ethics Manager is Gail Sloan, who may be reached at (858) 646-6644. |
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CONFIDENTIAL REPORTING OF VIOLATIONS
AND CONCERNS |
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The Company has established a procedure by which suspected violations of this Code, including concerns about the Company's accounting, auditing and internal accounting controls and disclosure practices, may be raised confidentially. An employee may utilize this confidential procedure to raise a new complaint or concern or to report a complaint or concern that he or she has previously raised which he or she feels has not been appropriately handled.
To confidentially report a suspected violation, you may anonymously call the Chief Executive Officer or the Chairman of the Audit Committee of the Board of Directors. Complaints regarding the Company's accounting, auditing, and internal accounting controls and disclosure practices will be promptly presented to the Audit Committee of the Board of Directors.
Other complaints will be investigated by appropriate Company personnel, including, when appropriate, the Audit Committee of the Board of Directors. Be assured that an employee who reports a suspected violation in good faith will not be subject to retaliation and his or her confidentiality will be protected in accordance with applicable law.
If any person believes that he or she has been subjected to any retaliation, he or she may file a complaint with his or her supervisor, our Ethics Manager, our Chief Executive Officer or the Chairman of the Audit Committee of the Board of Directors. If it is determined that an employee has experienced any improper employment action, such employee will be entitled to appropriate corrective action. |
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EFFECT OF VIOLATIONS |
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LJPC will promptly take appropriate action if you engage in conduct that is considered unacceptable. Disciplinary action will be taken against: |
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Any person who authorizes, directs, approves or participates in violations of this Code; |
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Any person who has deliberately failed to report violations of this Code, who has concealed violations of this Code, or who has deliberately withheld or misstated relevant information concerning a violation of this Code; |
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Any person who retaliates, directly or indirectly, or encourages other to do so, against any other person because of a report by that person of a suspected Code violation; and |
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Any person who, under the circumstances, should have known about a violation by another person under his or her supervision or who did not act promptly to report and attempt to correct a violation. |
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Any person who is determined to have made a false or frivolous report of a suspected violation. |
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Disciplinary measures that may be invoked include, but are not limited to, counseling, oral or written reprimands, warnings, probation, suspension without pay, demotions, reductions in salary, termination of employment and/or restitution. Furthermore, illegal actions will be dealt with swiftly and violators will be reported to appropriate authorities. The specific sequence of steps to be followed will be determined jointly by your supervisor and the Ethics Manager or Chief Executive Officer. In addition, some circumstances may require the involvement of the Audit Committee of the Board of Directors. Although no two situations are identical, the Company is committed to prompt, fair and consistent enforcement of this Code. |
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WAIVERS |
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There shall be no change in any part of this Code, except by a vote of the Board of Directors of the Company. Any waiver of this Code for directors or executive officers (including our principal financial and accounting officer(s)) must be approved by the Board of Directors and will be promptly disclosed, together with the reasons for granting the waiver, by LJPC to its stockholders in a public filing.
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COMPLIANCE WITH THE CODE |
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These policies govern your behavior and decisions while you are employed with LJPC. It is each employee's responsibility to be familiar with these policies and to be sensitive to any situation that could lead you or others to engage in actions that would violate these policies. Claims of ignorance, good intentions or bad advice will not be accepted as excuses for noncompliance. By adhering to this Code you can create and reinforce an ethical atmosphere within the Company and positively influence the conduct of fellow employees.
Note: Nothing in this Code confers upon any employee any right to continue in the employ of or engagement by the Company or constitute any contract or agreement of employment or engagement. The nature of the employee's relationship is and remains "at-will", subject to the terms of any agreement (including any employment contract) that he or she may have with the Company.
Last Updated: September 3, 2009.
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